Teachers’ union needs an econ lesson

By Jim Clark
Special to the Bonanza
May 4, 2008

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There have been some new developments in the regrettable effort by the Nevada State Education Association (teachers’ union) to fatten teachers’ paychecks by an initiative petition which would increase gaming taxes on casinos by 44 percent and earmark the money for teacher (not administrator) salaries.

First, a couple of prominent spokespersons have made a debut in publicly opposing the measure. Retired Congresswoman Barbara Vucanovich, R-Reno, and retired Speaker of the Nevada Assembly Joe Dini, D-Yerington, have offered their services in opposing the teachers’ measure. They have recorded media messages warning of the adverse impact on Nevada if the proposal becomes law and they did so without compensation which shows courage of their convictions.

Vucanovich may be the most respected woman in Nevada. She served 14 years in Congress with distinction, retiring in 1997. She has participated in Northern Nevada Republican activities as well as charitable efforts since her retirement.

I usually don’t say nice things about Democrats but Joe Dini is an exception. Father-in-law to Incline’s Mike Menath, Joe was a true gentleman all the years he ran Nevada’s Assembly. He was never partisan and gave generously of his time to discuss with me and others legislation that would have made Incline Village/Crystal Bay an independent county. In 1997 he voted for a bill that created Incline/Crystal Bay into a separate school district even as his fellow Democrat, Gov. Bill Miller, was preparing to veto the measure.

So there is now credible and distinguished public opposition to the teachers’ union proposal (called “the tax grab”) and none too soon at that. Economists have calculated that the tax increase would impact all casinos in Carson City and Douglas County as well as at least 14 casinos in Reno-Sparks-North Lake Tahoe. Gaming job losses are predicted by Deutsche Bank analysts to exceed 10,000 with most of the impact hitting Northern Nevada.

The “tax grab” proposal would funnel money earmarked for teacher salaries without regard to any limit on how high pay increases would be and, disturbingly, no performance standards or accountability controls to show that the money is producing value for the taxpayers’ buck.

Further analysis of the proposal shows that, if enacted, it would alter the Nevada Plan for fair distribution of school funds to the disadvantage of rural schools. None of the money could be used for state emergencies such as earthquake disasters, a terrorist attack or a fiscal crisis.

Also, suppose the proposal became law and casino revenues declined, a fairly logical premise since casinos would be deprived of much of their marketing money. Nevada’s Constitution already requires the legislature to fund K-12 education before any other needs are met. By diverting tax revenues away from such needs as health care, safety, roads, seniors, etc. the measure could result in drastic cuts in state services or in an increase in our property taxes.

Finally it has been pointed out that the chief proponent of the measure, NSEA President Lynn Warne, may not even understand her own proposal. In a guest editorial appearing in Northern Nevada’s largest daily newspaper she wrote: “Only the most successful casinos, those whose profits exceed $1 million per month, would be required to pay this assessment.” Her proposal would in fact tax gross gaming revenue, not profits ... a substantial difference.

Maybe she needs a course in economics.

Jim Clark is president of Republican Advocates, a vice chair of the Washoe County GOP and a member of the Nevada GOP Central Committee. His columns run in the Sunday edition of the Bonanza.