The 2011 Legislative session is just about over and I think it can be best characterized by the warden in the movie "Cool Hand Luke" ... "What we have here is failure to communicate."
You also could call it the tale of two budget plans. The governor's plan, which amounts to cutting everything regardless of the dire consequences, and the legislative leadership's plan, which amounts to raising taxes on everything and reforming nothing.
The time for constructive negotiations is at hand. It is time to sit down and get a doable budget plan for Nevada's future worked out. This plan must do two things. It must properly fund education to a degree that K-12 and higher education can provide an appropriate education to our children and young adults, not because it is the right thing to do, (although that should be enough) but because Nevada's economic future depends on it. Second, this plan must put in place reforms and cost reductions that allow Nevada to operate at a sustainable level.
What many people do not understand is that it is the availability of quality employees that companies are most concerned with. Sure, low taxes, reasonable energy costs, technical infrastructure and ease of access are important, but the most important criteria is people. Qualified, educated, properly trained and motivated, people. The type you get from states, communities and school districts that have solid educational programs.
Nevada has lagged behind every other state and at least one U.S. Territory in what it spends on education per student. We are 51st out of 50. The governor's proposed cuts to education would relegate us to Third World nation status.
Eviscerating education budgets will not help us out of this problem; it will only make the problem worse. There is a direct link between economic prosperity and education. All the talk and sound bites of Nevada becoming a technological Mecca and/or the green energy producing state of the country will never happen unless we have smart and well-educated people in this state to build and operate these industries.
But, since people do not appear to be communicating, I propose a solution.
We accept the governor's proposal of reducing all state employees' salaries by 5 percent.
We accept the Assembly Republicans' proposals regarding prevailing wage law, collective bargaining and changes to the tenure systems.
From the legislative Democrats, we accept continuation for one more biennium, a current group of taxes that are due to sunset this year, allowing $627 million in tax revenue over the next two years.
Now we take the $627 million in sunset money and allocate $62 million, or about 10 percent, to higher education. Those funds, together with the $18 million the governor has allocated from the new Economic Forum revenue and the chancellor's four point plan, will allow NSHE to continue basic functioning to allow it to turn out the type of graduates that new companies want to hire.
The balance of these funds goes to K-12. There are 450,000 K-12 students in Nevada. Even with this revenue and the funds the governor directed to be provided from the new Economic Forum revenues, there will still be a need for the salary reductions, cuts to central services, and reforms, to make this work.
I wish there was another way. Taking money away from what are arguably some of the lowest paid educators in the country is awful. But in a state with the highest unemployment, I think it is better to keep as many teachers in the classrooms as possible, as opposed to massive layoffs.
Finally, as recommended by the governor, any unbudgeted additional state revenue that surfaces in the next biennium, automatically goes toward K-12 and NSHE, to get them back to pre-2008 funding levels. No longer life-support levels, but healthy, sustainable levels.
This is just the first step. The plain fact of the matter is that Nevada's golden goose in the form of gaming tax revenue, is gone, and it is never coming back at sufficient levels to fund the state's required services. Dozens of this country's brightest economists have stated time and time again that Nevada's recession will last a decade or more longer than any other state, unless it stops solely relying on gaming. The only way to improve our state's future is to change its revenue structure, while at the same time diversifying our economy. While it would have been nice for the legislature to address tax reform in this session, they are simply out of time.
I propose, that after this session, a bipartisan, impartial committee be formed to develop a comprehensive overhaul of Nevada's revenue structure and proper economic reforms. No lines in the sand and nothing is off the table. Currently we are a state that has the second lowest personal tax burden and fourth lowest business tax in the country. Coming up with a new tax structure along with prudent spending reforms, should be pretty easy.
• Donal Hummer, Jr., is chairman of the board of the Western Nevada College Foundation.
