The Nevada Legislature began its every-other-year lawmaking jamboree Carson City on February 4, and the political gossip machine is in full swing. Editorial pages and partisan blogs are once again rich with titillating personality conflicts, polarizing wedge-issues and vexing political maneuvering—little of which will have any discernible impact on your daily life. But what about the big picture? The issues that will shape the future of our state? We recently convened five people who devote a good part of their professional lives to studying—and sometimes solving—problems that affect our way of life, and we asked them to go beyond prognosticating outcomes of the immediate session and discuss policy that would create a more vibrant and viable Nevada.
Our panelists, who gathered at the Vegas Seven offices on January 29, were UNLV economics professor Stephen Brown, who heads the Center for Business and Economic Research and has a résumé packed with work on energy economics; College of Southern Nevada history professor Michael Green, who writes “Nevada Yesterdays” for KNPR and is Vegas Seven’s contributing editor on politics; UNLV urban affairs professor Robert Lang, co-director of Brookings Mountain West and an authority on transportation; PTA national service representative April Mastroluca, a former two-term Nevada assemblywoman who served on the Education Committee and chaired a Ways and Means subcommittee; and University of Nevada, Reno economics professor Elliott Parker, who has written about the decline of Nevada’s economy.
As the experts discussed economics, education, the environment and transportation, an over-arching theme emerged: the division of resources and power between Northern and Southern Nevada. Whether they were pondering the state budget or examining its renewable energy portfolio, the conversation came back to what some clearly perceive as inequities.
There’s been relatively little talk lately about Nevada having a spending problem, and more agreement that what we have is a revenue problem. There are some proposed solutions—a revenue-neutral broadening of the business tax, a mining tax. Could any of them solve this problem?
Parker: The first thing that we need to do is come to agreement that, in fact, we have a very small state government. If you compare us to other states, we, as a general fund, are something less than 2.5 percent of GDP, which is, I’m pretty confident, the lowest in the country. … There are lots of different things states do. We don’t have to re-create the wheel; just charge a lower tax so we’re competitive. It’s better to be a low-tax state than a no-tax state, and that’s too much what we are.
Green: Twenty-five years ago, I believe, there was a Price Waterhouse study that said, well, we have the wrong tax system. We need to fix it. What are we hearing right now? We need to re-examine the tax system.
Mastroluca: And we’ve re-created that study at least a half-dozen times.
Green: The political will is always the issue, and I’ve talked about this, and Elliott [Parker] won’t enjoy it, being the northerner here: Southern Nevadans could unite. They don’t. They don’t unite by region. There are some signs, and you wonder exactly how it’s going to play out.
What are those signs that Southern Nevada is uniting?
Lang: There was a meeting held a couple of weeks back that was chaired by [Assembly speaker] Marilyn Kirkpatrick that brought together Southern Nevadans to discuss issues relative to the South and create a southern agenda for the legislative session. And you have the Chamber of Commerce seeking very specific legislation and deliverables—seeking to change governance structure, so that it represents more of the southern influence
Parker: If I could jump in a little bit, since I’m the only northerner on the panel, it’s not that I object per se. I certainly think that representation is important, and Las Vegas is now 75 percent of the state’s population, and I don’t disagree that it should have good representation. But we’re thinking about this the wrong way if we think about it as North vs. South. … What we’re seeing in Nevada is the same thing you see all over the country: the difference between urban and rural. Rural areas all over the country tend to be very conservative, very Republican, tend to oppose government intervention, except when it comes to their own benefits.
Brown: I would say that I don’t completely agree with your analysis, because Clark County does have its rural areas, but Clark County is largely dominated by the urban areas associated with Las Vegas, the incorporated cities and unincorporated urban areas of Clark County. We have almost all our urban population here. I really don’t see the divide as being Democratic-Republican. Rather, I see it as being one in which there are business interests in the urban areas that like the economy the way it is right now. They don’t want to pay taxes. They don’t want to pay for education, because [the status quo] supports the way they do business.
Mastroluca: I would actually disagree a little bit with that. It’s very rare for me to find a middle-size to large business that says to me, “I don’t want to pay more in taxes.” Most businesses that I’ve spoken to through the chamber, the large businesses including gaming and mining, have all said, “No, we agree. We want better infrastructure; we want better education; we want to pay more taxes. We want it to be fair.” No one’s been able to come up with a definition of fair. And that’s been the challenge.
Lang: The way the North-South dynamic works, I see it a little differently. Las Vegas was in rough parity in the 1960s and ’70s, then accelerated to become four times [Reno’s] size. So there was no anticipation, in terms of the whole culture, of where this came from. … So, the state has to catch up and look at things like, for example, I think it’s down to us and one other state that don’t have community colleges administered by local government. … Las Vegas needs tools, and we need to compete, because we compete in a global environment. We connect to L.A. and Phoenix. We’re not only big, but we connect to other, bigger places. Then, we’re restrained by a state where a lot of the thinking and structure is, you know, “This is good enough.”
Brown: In concert with what Rob has been saying, in other states, there’s a different share of government between local government and state government. Given how much different Las Vegas is from the rest of the state, I think Las Vegas would benefit by having a lot more local government and a lot less government from Carson City. We really can’t expect the voters in Elko to be sensitive to the issues in Las Vegas. We really can’t expect the voters in Elko to even be that concerned about what’s going on in Reno.
Everyone, including Governor Brian Sandoval, seems to agree that our state’s education system needs a lot of work. If you had to pick the most pressing issue, what would it be?
Mastroluca: We have to be prepared for common-core standards. We have students who graduate from high school, go out of state to college and discover that what they learned has not prepared them for college, because the expectation is different from one state to another. … The point of the National Governors Association [proposing the standards] was so the federal government couldn’t come in and set those standards and make those rules. The downside is that the federal government also doesn’t help pay for it. So, as a state, we have to figure out where we’re going to get the money to put this into place, so that our kids are graduating at the same level and with the same expectations as everyone else.
Brown: There’s this idea that has been promoted the last 20 years that we can’t solve a problem by throwing money at it, but in fact the research shows that those places that spend money on K-12 have better outcomes in terms of education, so one of the things that we need to look at is, how can we better fund our K-12 education here in Nevada?
Parker: The simple doctrine that you can’t solve a problem by throwing money at it has always been a simplistic way of looking at it. Yeah, it’s true if you just throw money at it and don’t do anything else, your results aren’t going to be very good. But if we had leadership, we could say, “Look, we will fund this better, but we’re going to ask for certain reforms, and you’re going to have to show us some improvements.” The other thing is, you can’t solve problems by taking money away, either. That clearly makes it worse.
Green: We’re good at that.
Mastroluca: Yes, we are. We’re also good at starting a program and then deciding after two or three years, we’re going to scrap that and do something else, without investing the time or having the expectation of reasonable results. We want it to fix the world overnight.
Green: We’re going to fix the world overnight with teacher evaluations, but not with our state budgetary and taxation system.
What would a viable solution look like?
Lang: Let’s say that you’re in Maricopa County, Arizona.What you have there is a baseline support for minimum standards throughout the entire unified school district. Then, they [say to municipalities], “Hey, wanna charge more and pour more into your schools? Go for it.” Henderson could do that. There are schools in the northern parts of Green Valley that are becoming mediocre as you have downward filtering in housing. [Under an approach like Maricopa’s], those schools would be secured, because the city itself would have a greater resource.
Brown: That’s something that the Legislature would have to make possible, because local governments are controlled by the laws that the state Legislature makes.
Lang: We could take devolution from Carson City and put it into regionalized structures that are comprised of these stakeholder groups and administer it in a way that is not as corrupted by public-employee unions.
So, we’ve come back to the idea of moving some decision-making and funding mechanisms from the state level to the local level.
Parker: I agree with what everybody is saying. But there would be resistance to these changes. The devolution to local areas will be the source of a great deal of fear in the North and rural areas, and it would be nice if you could embed this in some reassurance that we’re not going to reallocate a piece of the pie, because a lot of us are suffering, too.
Brown: In some sense, we’re in a state where we’re all getting too little government, and we’re fighting over the shares of that. If we had more local control, I think we would be able to select in each of our areas of the state the amount of government that we wanted and take care of our own funding, etcetera.
Parker: If we could frame it that way, I think we’ll have better success.
Let’s move on to energy and the environment. Nevada’s renewable portfolio standards have been tweaked in every Legislature since they were introduced. We’re now at a goal of 25 percent of our energy coming from renewable sources by 2025, with 6 percent of that being solar by 2016. Are we on track to get to those goals?
Brown: Twenty-five percent by 2025 is probably doable. One problem, of course, is that, at this point, we don’t really have the technology to store electricity in an economic way. People are trying different things—batteries, compressed air, pumped water. These are all fairly expensive, and, unfortunately, the peak times for wind power and solar power don’t match up with the load, so getting beyond 25 percent becomes challenging, technologically.
Green: On renewables generally, we’re in the constant struggle because of cost. If it does cost more, then how do we get there? We then come back to—well, where’s the money, and where’s the pie?
Lang: One piece of good news here is that California is demanding even more stringent standards than we are. And originally, they were supposed to buy it all from within California, but they’ll run out of the sources. And we have the largest supply of geothermal in the North; we [also] have great opportunity for solar in the South. This is an economic development opportunity for us, as well as cleaning our own air.
Parker: We need a regional transmission system, and we don’t have that.
That’s one thing our lawmakers could tackle. Is there anything else that would encourage more development in renewables?
Lang: One thing the Legislature could do is, [right now] you can’t sell your energy back to the power company, like you can in other states. That would be a big help. That’s why New Jersey is the leading solar state. I’m from New Jersey. It never was sunny in New Jersey. … We’re well-positioned, but we have a problem in terms of regulation. Entrepreneurs would come and put solar panels on the roof of my house if I could guarantee that I could send that back into the system and that somebody had to buy it.
Brown: We’re behind in this stuff. I mean, even places like Georgia have it, and there’s also more money in the universities to do research in a lot of other states.
Robert, what needs to happen at the state level to facilitate the development of what you’ve dubbed the “megapolitan Southwest”—that is, Las Vegas-Los Angeles-Phoenix?
Lang: Well, first of all, the Nevada Department of Transportation is speculating that it may allocate a disproportionately large amount of its funding for rural areas. You now have, literally, 10 lanes between Reno and Carson City, and that’s from a metro of 420,000 to a region of 55,000—cities that have no commuting as evidenced by the census’ combined statistical area measure. Meanwhile, here we are, with a potential linkage to [Phoenix], and you’re down to a couple of lanes and trucks belching up hills.
Brown: Another issue we’re facing in transportation—this is a more long-term issue, but it’s becoming more and more prevalent—is that our funding for our infrastructure is set up in a way that we’re going to run out of money to build roads and highways. As cars and trucks become more fuel-efficient and shift from using gasoline to electricity, we don’t have a way to fund infrastructure: We’ve tied it all to the gasoline tax.
Lang: On the other side, high-speed rail to California is looking better.
Green: I was thinking about growing up here in the ’70s and hearing Mayor Bill Briare talk about the bullet train, which is exactly the train we’re still discussing. It’s only been 35 years. I was thinking of a governor back in the ’20s, Jim Scrugham, whose nickname was “Gasoline Jim,” because he finally got highways built and he passed gas taxes and, naturally, was defeated for re-election. And maybe it’s worth remembering that a few years after that, he was elected to the House and then the Senate. There might be no fun for the prophet in his time, but if he waits a little, it might be OK.
We’ve discussed a lot of important priorities. Do we need an annual legislature to adequately deal with them?
Green: We desperately need it.
Mastroluca: My fear is that, when you say “annual legislature,” California pops into my head, and I think that it’s pretty well-evidenced that there is a large level of dysfunction with that system also. Nevada is definitely behind the times. When I started, I think there were five states that were every other year; now I think it’s four, the biggest being Texas. But the system so many states have gone to—which is, one year you spend six weeks working on the budget, then the next year you spend the entire 12 weeks working on policy—makes sense to me. Up until my second term, I actually sat in more special sessions than regular sessions.
Lang: When you have more bonus sessions than regular sessions, it means there’s a flashing light that you need more government. We could discuss a structure—and this has to go through constitutional process, of course—where you could continue business in the Legislature’s off years. And if you do that, I would make this controversial suggestion and say, “Why not do those [off-year special sessions] in Las Vegas?” … Alaska, for instance, which has a very remote capital and a big city in Anchorage, has taken more and more of government function and placed it in Anchorage.
Mastroluca: I would love to hear what Elliott would think if we did annual sessions and did one in Reno and one in—or, one in Carson and one in Vegas.
Parker: Um, hmm … [laughs]. I haven’t pondered that one before. I mean, of course, it would make people nervous that, you know, that it would be more symbolic of the shifting of power to the South. It would depend on how the South handles it, and the extent to which you’re able to reassure people that this isn’t simply the South screwing the North.
After the Great Recession, we’ve still got a lot of recovering to do—both economically and socially. Where do we go from here?
Brown: The economy has still only recovered about a little more than 20 percent of the jobs we lost during the recession. That’s well behind the rest of the country, and if we look at Reno, it’s even worse. So, we need to think about what are the new things we need to be doing as a state to promote economic growth? The governor’s plans are very forward-looking, but we need to build a state that supports them. If we’re going to really attract a different kind of business, we need to put money into infrastructure and education.
Parker: That’s exactly the point that I wanted to make. The growth that we’ve seen is not only almost entirely in Las Vegas since the depths of the recession, but also it’s primarily in tourism-related areas. We’re growing in the old areas. … We seem to be offering a lot of tax breaks to firms without having any way to hold them to the promises they make. We’re using a lot of this economic development, which is a great idea, but I think we’re using it as sort of a way to give away more tax breaks when we need revenue.
Mastroluca: What’s so frustrating is that people have more access to their elected officials today than ever before, and they don’t take advantage of it. So few are taking the time to tell their elected officials how they feel, and it’s generally a very small, loud population that has a strong opinion on one or two things. That’s the voice that gets heard, but it’s not the voice of the general population. There’s a lot more education that needs to go on about voting, about reaching out to your elected officials, about the power that you have as a constituent. People forget that. They think all the decisions are made by lobbyists or politicians, and they’re really not. They really are made by the voices of the people who elected them.
What do you think this legislative session should focus on?