Sunday Morning

Yesterday, the Senate overturned the Governor's veto on SB 201/RTC5. We just need a vote in the Assembly and that bill will become law!

All of the energy bills have fallen into place, but Debbie Smith's attempt to change the STAR Bond process may die in the Senate. This has been her main priority this session, and one she has spent countless hours on. There are developers who claim to have made their plans based on the current formula for tax abatements, and they have been working overtime on this bill.

The Speaker certainly wants to override the governor's misguided veto on her bill to create a K-12 education rainy day fund.

The Raggio-Horsford tax study is a done deal.

Ironically, the one thing that may be holding up the session adjournment is the Governor's veto stamp! While he has railed against the wasted time and money of the session, his record-setting veto extravaganza may cause the legislators to hang around until 1 am Tuesday just to ensure that they have time to overturn any bills returnd by the Governor.

Assembly is currently honoring, one by one, their term-limited members.

Saturday in Carson City

We are winding down to the final hours down here, which means a lot of hurry up and wait time.

The biggest issues remaining are the final four or five vetoed budget bills that need to be overridden by the Senate, the Raggio-Horsford fight on what an interim tax study should look like, the SB 201/RTC-5 veto override, and Barbara Buckley's reserve account for k-12 education.

Apparently, Senators Raggio and Townsend want an override vote on SB 201 to occur before they agree to override the final budget bills.

As for the tax study, Senator Raggio proposed an open-ended study conducted by a private, outside firm. Senator Horsford, on the other hand, wants to put together a commission that will focus on some specific business taxes and a mechanism that will allow these various new taxes to be outlined completely for quick consideration by the 2011 Legislature and quick implementation by the Department of Taxation, etc.

As for the Speaker, the Governor vetoed AB 458, which would set-up a special reserve account for K-12 education. Current practice forces any extra education funding left-over at the end of a biennium to be reverted back to the general fund. This bill would allow that left-over money to stay in a separate account and be utilized specifically for education during budget downturns.

The Chamber testified in strong support of this bill and other bills that set up reserve accounts for such things as higher education.

In a bizarre act that seems to make the perfect the enemy of the good, the Governor vetoed AB 458 because the Legislature ignored his bill that would have set up similar reserve accounts for k-12, higher ed, and health and human services.

While the Chamber supports all of those concepts, it would seem to me that AB 458 is better than current practice, so it should have been signed into law.

Now, back to waiting....

Reforms passed, taxes vetoed, lobbyist exhausted

Things are moving along rapidly in Carson, with the potential to be out of here by Saturday.

As I type this, the Senate is taking up SB 427, the long-term spending reform bill, which includes changes to PERS, PEBP, and collective bargaining for local government employees that is outlined in the post below. They just voted 19-2 to send the bill to the Assembly.

As soon as this bill gets through both houses, that should grease the skids for the tax increase override vote.

That bill, which the Governor vetoed at 5 pm today (along with 19 or so other bills), has to make its way over to the Legislative Building by midnight tonight.

That should allow an override vote by tomorrow.

Other than that, there are about a zillion conference committees meeting to has out disagreements and the renewable energy bills should be wrapped up soon.

Less than a week left...

The biggest vote of the session occured last Friday. That was when SB 429, the tax increase package, sailed through both houses and landed with a thud on the Governor's desk.

So, this week is kind of surreal, with several conference committees meeting to hash out differences on some remaining policy bills. Usually, budget issues get shoved right up until the last day of session. Given the quirkiness of the calendar this year, there may be hope that we get out by this weekend!

It would seem to be in the Speaker and Majority Leader's best interest to adjourn a few days ahead of time, enabling them to argue that they saved tax dollars. (Apparently, it costs around $120,000 per day to run the Legislative Building).

The renewable energy bills are still being hashed out. While most folks would assume that the major policy differences occur between Democrats and Republicans, the Assembly and Senate Dems have different ways to look at things as well! Everyone, including the Governor, wants to be in front of the renewable energy issue, so everyone seems to have their own bill on the subject! It will all get worked out, and Nevada should be well-positioned to take advantage of our abundant natural resources and (for now) business-friendly climate.

The Governor has until midnight on Thursday night to veto the budget and tax bills, which leaves plenty of time for an override vote in both chambers.

Word has it that the "reform package," which the Senate Republicans demanded before signing off on the tax increases, was in drafting this morning. All of the reforms are supposed to be wrapped into SB 427, which began its short life last week in the Senate Finance Committee as a PERS reform bill.

The Las Vegas Chamber has been instrumental in the negotiations on this bill. Below, you will find the reforms that were agreed to. This language was sent out to the members of the Vegas Chamber:


Public Employees' Retirement System (PERS):

(Effective for employees hired after January 1, 2010)

-Increases the number of years of service required for firefighters and police to retire with full benefits from 25 years to 30 years

-Increases the retirement age required to retire without penalty

-Increases the early retirement penalty from 4 percent to 6 percent per year

-Reduces the benefit factor from 2.67 to 2.50, adding 2 years to the number of years required to fully vest

-Reduces the ability to take advantage of the system by controlling spikes in compensation for the 5 years before retirement by capping the annual increase in pay at 10 percent (excluding promotion and assignment related bumps)

-Lowers the cap on Cost of Living Adjustments (COLA) for post-retirement increases

Public Employees' Benefits Program (PEBP):

-Increases number of years required to begin vesting in program from 5 to 15 years of service for public employees hired after June 30, 2009

-Requires retirees to be continuously enrolled in PEBP immediately upon retirement to receive benefit, eliminating adverse selection issues

Collective Bargaining Reform:

-Brings fairness to collective bargaining process by changing law so fact-finder must consider state employee compensation, as well as local government ability to pay for life of contract

-Brings transparency to collective bargaining process by requiring a full fiscal hearing before elected officials vote on a contract

I can see the end...

The Senate passed SB 429, the tax bill, by a vote of 17-4. Four Republicans voted no.

A few minutes later, the Assembly passed it 29-13, with John Carpenter from Elko as the only Republican voting yes, along with every Democrat.

The Governor has the bill and has until Thursday to veto it.

There was some back and forth between Senate Majority Leader Steven Horsford and Minority Leader Bill Raggio most of the afternoon, as Raggio insisted on a hard sunset for the new tax rates and some haggling over the language of an interim tax study.

While all the rates remained the same, Raggio's sunset demands were agreed to. The new tax rates will sunset on June 30th, 2011 unless the 2011 Legislature renews them. (Shall we place our bets now?)

I must point out that there has been no reform package introduced yet. There was a PERS hearing on Thursday, but the bill has not gone to a vote yet. So far, I have seen nothing on PEBP, prevailing wage, or public employee collective bargaining.

Therefore, we remain opposed to the inevitable tax increases.

The autism bill is still out there, as is the binding arbitration bill.

The SB 201 (RTC-5) veto has not been taken up for an override vote, and the new RTC-5 bill, with a diesel tax addition, is still hanging out there.

Both chambers are meeting on Saturday morning, but then have the rest of the weekend off!

Since the budget and tax bills have been sent to the Governor, next week is wrap-up and veto overrides! If she is going to run for Governor, it would seem to be in Speaker Buckley's best interest to wrap up session early, before the June 1 deadline. She can then claim that she saved the taxpayers money, given that it apparently costs $120,000 every day to run the show down here.

Ready for the circus to end.

And then, a long nap...

Taxes, Ethics, Caffeine

I am at the end of a second long day in Carson City.

Given the Governor’s promised veto of any budget package that includes a tax increase, there is a legislative self-imposed deadline of Friday to get the bills to the Governor so that there is enough time for a veto override.

Things were slowed down a bit tonight as an ethics bomb went off in the Senate Chamber. Senator Raggio has been threatened with an ethics complaint if he votes on the tax package because a member of his law firm testified on a tax proposal a week or two ago. Therefore, Raggio asked for a legal opinion from the legislative council and received a letter that stated he should abstain from voting on the issue.

This prompted a rushed bill that would allow and require every legislator to vote on bills of “immense statewide importance.”

There always seems to be wrinkles in the rush to close…

The tax bill finally has a name: SB 429. It would raise $781.2 million total. The revenue breakdown is as follows:

-Sales tax increase of 0.35 percent: $280 million
-Tiered Modified Business Tax rate: $346 million
-Doubling of the business license fee: $61 million
-Changes to governmental services tax on vehicles: $94 million

The payroll tax rate would be further complicated by reducing the tax rate from 0.63% to 0.5% on all annual payroll over $250,000, while increasing the rate to 1.17% on payroll above that amount.

While the Chamber understands the need for small business tax relief, we are concerned about instituting a hiring disincentive for any company that is near the $250,000 cap.

Up later this morning in Senate Finance is SB 427, the PERS reform bill. While it is a good start, it does not include a minimum retirement age and some other details.

Stay tuned, as things are moving fast….

Not Enough Time for Spending Reforms

As you know by now, the Legislature has begun to roll out its tax proposals to fill the $800+ billion hole it has created by adding a lot of spending back into the Governor’s budget.

The tax show began on Thursday afternoon, when the Assembly and Senate Taxation Committees met in a joint meeting to discuss Speaker Buckley’s proposal to “protect” small businesses by cutting the Modified Business (payroll) Tax from 0.63% to 0.5% of payroll under $250,000/year.

That equals out to about a $325 tax cut. Of course, a business with $250,000 in payroll could have as few as three people or as many as 13 or so. Everybody has a different description of a small business, but this proposal seems to define it as exceptionally small.

Now, the MBT rate described above applies to the first $250,000 of payroll of EVERY business. But, on any payroll above that $250,000 magic number, the rate is set to increase to an undetermined amount. That new rate could double to 1.25%, or even triple to 2%, which is the rate that our bank members currently pay.

You want to know what the most disheartening thing about this is? I was one of the only lobbyists that stepped up to the table to say that we could not support any tax increases because long-term spending reforms had not yet been implemented! The Retail Association stepped up to the plate to offer an alternative solution, and the NFIB representative opposed the plan as well.

I reiterated the Chamber’s support of the list of long-term spending reform that you are familiar with. I stated that, at this point in time, the Chamber could not support ANY tax increases because very little progress had been made on these reforms.

While I can respect a position of “our tax rates should be higher,” I have a hard time fathoming how anyone can claim that there is “no where left to cut.”

A system that allows public employees to retire at age 50 with 75% pay for the rest of their life is not “bare bones.”

A system that forces local governments to beg public employee unions to take only a 1% COLA instead of the 4% they were promised is not “bare bones.”

A prevailing wage survey system that calculates the prevailing wage by including prevailing wages in the formula is not “bare bones.”

I have been told by a few legislators that “we do not have enough time to deal with all of these reforms in 120 days.” I respectfully disagree. We seem to always have time to spend tax dollars, but then run out of time to save tax dollars.

For those of you who are not familiar with the legislative process, it usually works as follows: bill is heard in committee on one day, it is decided upon in a work session on another day, it goes to the floor, then goes through the same process in the other chamber. In other words, one bill could get through the entire process in about two weeks if there was strong legislative will to do so. 120 days is plenty of time!

While I have not seen the results of whatever reform package is going to come out of the “core group,” I have a feeling that it won’t be comprehensive enough and that the Chamber will not be able to support the final budget package.

While some may call this unreasonable or unrealistic, it is the position of this Chamber that every last dime must be spent as efficiently as possible before taking almost $1 billion out of the economy.

More on the rest of the tax package soon…

A few updates...

AB 119, the PLAN anti-growth water bill, passed out of the Senate Government Affairs Committee today.

Both Washoe County legislators on the panel, Randolph Townsend and Bill Raggio, voted against the measure. The rest of the committee voted for it.

It now moves to the floor.

AB 162, the autism mandate bill, was passed out of the Senate Commerce and Labor Committee today as well.

SB 201, the RTC-5 implementation bill is due to have its final vote on the Assembly floor on Friday, then it moves to the Governor.

There is rumor of a workers comp compromise and it sounds like all of the most egregious issues that the business community has been worried about have gone away.

Until something is on paper, we can't commit to anything.

The Governor's sunset commission bill, AB 519, is finally getting a hearing on Friday morning. This bill comes directly from the SAGE Commission recommendation.

Finally, there may be hearings next week on the grand tax proposal, if the core group of legislators can cut a deal this weekend.

A Good Day

It was a good day at the Legislative Building.

SB 201, the RTC-5 bill, was heard in the Assembly Transportation Committee today. The Chamber joined the RTC, Sparks Mayor Geno Martini, Chamber Member Norm Dianda of Q&D Construction, and Skip Daily from the Laborers union at the table in support of the bill.

Better yet, the committee voted to pass the bill with a unanimous vote just moments after the testimony concluded! It is pretty rare for a committee to hold a vote the same day that they initially hear a bill, so this issue is showing great momentum.

It is being widely reported that AB 495, the med-mal bill, will not even receive a hearing in the Senate! It was due to be heard tomorrow in the Senate Judiciary Committee tomorrow and was abruptly pulled from the agenda this afternoon.

Rumor has it that since Assembly Judiciary Chair Bernie Anderson is refusing to hold a hearing on the construction defect bills that came out of the Senate, Senate Judiciary Chair Terry Care is returning the favor on med-mal.

While this issue can always appear in another bill in the waning hours of the session, this is certainly good news for every individual in this state, as it will be one less cause of rising health care costs.

While this is bad news for our members (and home buyers) who have to deal with the construction defect lawsuit mess, it is good news for our health care system.

You win some, you lose some.

Nevada has a Broad-Based Business Tax!

Just to set the record straight, there is currently a broad-based business tax in the State of Nevada.

There are several elected officials and lobbyists in the Legislative Building who continue to claim that there is no such thing or that we need to “broaden the tax base.”

The Modified Business Tax, the payroll or “Jobs Tax,” is assessed on any persons doing business in Nevada who are required to pay unemployment insurance. Who is required to pay that insurance? With very few exceptions, employers of one or more person with total wages paid of $225 or more during a calendar quarter pay the Jobs Tax.

That is about as broad-based as you can get!

While some use the “no broad-based tax” line to argue for gross receipts or corporate income taxes on large, out of state firms that “don’t pay their fair share,” the truth is that every business pays the Jobs Tax, sales tax, property tax, unemployment insurance, workers comp insurance, local fees, etc. In fact, large corporations pay A LOT of taxes in this state.

So, while an intelligent debate can be had on whether or not this broad-based tax is too high or too low, it is absolutely false to claim that Nevada does not have a broad-based business tax.

RTC-5 Passes Senate 20-1

SB 201, which would implement the RTC-5 ballot initiative, passed the Senate today by a vote of 20-1! The only no vote was Senator Barbara Cegavske, who expressed concerns about the lack of a sunset clause and the timing of a tax increase in this economy.

The problem with a sunset is that the revenue received from this bill has to be bonded out over several years. In order to bond those revenues, you have to have a steady revenue stream. There is a mechanism in place to allow the Washoe County Commission to review the increased rates every year.

The bill is supposed to receive a hearing in the Assembly Transportation Committee next week.

Special Sessions and Lawsuits

I was fortunate enough to not be around during the 2003 legislative session, as I am told it was ugly.

There were two or three special sessions that lasted into July.

The governor filed a lawsuit against the legislature because of their failure to pass a budget on time.

The Nevada Supreme Court ignored the constitutional requirement that 2/3 of the Legislature must vote for any tax or fee increase (a decision they later reversed).

And the largest tax increase in state history was approved, which was somewhere in the neighborhood of $833 million.

It is that number that should be watched carefully. One line of thought has it that legislators will be loathe to pass a tax increase over that amount, because the campaign mailers in 2010 and beyond will read that they supported the (new) largest tax increase in Nevada history.

Some legislators have stated they want a new "broad-based" business tax.

Others, like Senator Raggio, seem to only support increasing existing taxes and would opppose creating new ones. Assembylman Pete Goicoechea has stated his public support for a sales tax increase, because it hits everybody. Senate Majority Leader Steven Horsford has stated that he is willing to go above and beyond the 2003 magic number and has hinted at some sort of "broadening" of the tax structure.

As the Governor has repeatedly stated that he will veto any and all tax increases, 2/3 of both houses will have to support the final tax package.

That means at least two Senate Republicans need to go along with the Democratic majorities in both houses. Bill Raggio has more power now than he ever had as Majority Leader. The Democrats need him to pass any tax package.

After the Governor receives a bill on his desk, he has five days to sign it, veto it, or let it become law without his signature. That means the Legislature has to send him a tax bill at least 6 days before June 1, the constitutional deadline for the end of session. If they do not get the budget/tax bill over to the Governor before Memorial Day, the Governor will have to call a Special Session in order to fund state services for the next two years.

The key is, the Governor determines what issues the Legislature may take up in a special session. If a special session necessity comes to pass, it will be the Governor's position that he can order the Legislature to consider the budget, but prohibit them from considering any tax increases.

The Legislature would argue, however, that while the Governor can limit the discussion to the budget, he can't limit the details (tax increases) of what the budget includes.

This is a situation ripe for lawsuits and court decisions, a la 2003.

The Speaker seemed to preclude all of this by saying that she is not willing to get into a legal fight and would just accede to the Governor's budget and adjourn on June 1.

This should get very interesting.

And the Number is...

The Economic Forum just approved a final number of around $5.3 billion in general fund revenues for the next biennium. That is over $900 million below the Governor's budget that was submitted to the Legislature in January.

Jon Ralston has reported that Nevada's application for federal stimulus dollars for education has been approved, but there is no word yet on how much of the hole that fills.

And now the final act begins...

The Hole Gets Bigger

The Economic Forum meeting is underway in Carson City, and, as expected, the numbers look pretty dismal.

The Forum's job is to receive forecasts from the Legislature's Fiscal Division and the Governor's Budget office of the major general fund revenue sources and then make their best educated guess as to what those revenues will be for the next two fiscal years.

The Legislature is then required to use this forecast as the baseline for their budget. Given that there is a constitutional requirement for a balanced budget, the final budget must either spend up to the Economic Forum amount, or if there is a desire to spend more, taxes must be raised.

Political guru Jon Ralston with the Las Vegas Sun summed up the competing numbers in an e-mail this morning. In its December meeting, the Forum predicted that Nevada's general fund would receive $5.65 billion over the next biennium. The Governor, required to build his budget based on that amount, submitted a budget of $6.2 billion (the extra amount comes from the new room tax increase that has since been signed into law).

Today, the legislative folks are estimating $5.57 billion and the Governor's people come in lower at $5.35 billion.

In other words, if you include the drop in local property and sales tax rates (some of which the state government has to make up to the school districts), we could very well be below the Governor's recommended budget by a billion dollars.

So far, the legislative money committees have added over $70 million back into the Governor's budget, making the hole that much bigger.

Stay tuned, as this meeting will be going on for quite a while.

"Nevada, You're Next."

I attended a very interesting “hearing” on Friday at the offices of the Nevada Motor Transport Association in Reno.

Several Republican California state legislators came over the hill to hear from companies who had moved away from California. A few hours was spent listening to testimony from several entrepreneurs, most of whom had relocated to Northern Nevada.

What was most interesting to me was that while taxes certainly came up from time to time, most of the complaints centered around high workers comp costs, and the extraordinary regulatory hurdles and burdens put in place by various California governmental entities. A common theme was the antagonistic attitude of the bureaucrats toward business owners, rather than a “how can I help you comply” approach.

We heard tales of agents demanding to inspect a closed plant on Good Friday, of enforcement officials bringing news camera crews with them to “offending” businesses, of crushing regulations that threatened to drive job producers out of business.

We then learned about the magnet that is the State of Nevada. One participant stated that Nevada is the closest thing to California without being in California. They are the 7th largest economy in the world and both of our major cities sit on two of the major interstate highway corridors from California. Our neighbor is a huge market, filled with people who need goods and services.

Several participants disclosed the fact that it is cheaper to transport goods between Northern Nevada and Southern California than it is between points in Northern and Southern California! California’s tariff laws are the cause of this disparity.

Finally, one participant, who has a business in the Carson Valley, discussed the warm reception he received from the local fire marshal when he arrived in Nevada. The fire marshal arrived and wanted to learn about his business, what it manufactures, and how to train his people to deal with the type of fire that could potentially occur there!

All of the speakers confirmed that they were never notified by any officials in California to inquire as to why they were leaving and how they could assist in enticing them to stay.

The attendees received a warning from the California elected delegation in attendance.

“Nevada, you’re next!” they stated. “Don’t let what happened to us, happen to you.”

I could only think of the various workers comp bills and other anti-business legislation flying around Carson City right now. It was a shame that there were no elected Nevada officials in attendance to hear the warning.

Deja vu

It’s déjà vu time at the legislature. Yesterday was the deadline for all non-exempt bills to get through their house of origin. In other words, all Assembly bills had to be passed and sent to the Senate and vice-versa or they died.

This means that there aren’t really any brand new bills to follow and testify on. So, all of the various workers comp bills, health insurance mandate bills, and others that the Chamber testified against in one house, we are doing so again in the second.

Today, that included AB 511, which was heard in Senate Commerce and Labor. This is the bill that would gut the exclusive remedy provisions of workers comp and allow for employees to have a private right of action against insurance companies. Same group of folks testified in favor, same opposed.

I did get to testify in favor of SB 275 again. Today it was in Senate Finance; a few weeks ago it was in Senate Health and Education. This bill is exempt, which means it has some type of fiscal note attached to it and needs to be examined by the money committees. This is the bill that Senator Horsford has proposed which would create a SAGE-type commission for the education system.

Tax Study

This week brings a change of pace, as the deadline for bills to survive through their committee of origin passed on Friday. More than 260 bills officially died on Friday, but you never know when some issues may rise from the dead! The next deadline is April 21, when all bills have to get through their first house before traveling to the other chamber. This week will be heavy on floor sessions, but light on committee hearings.

I did testify in support of SB 399 in the Senate Finance Committee this morning. This bill would authorize a study of Nevada’s tax structure to take place over the interim between the 2009 and 2011 sessions. It would delve into the proper allocations of tax revenue between state and local governments and between the local governments themselves.

I was honored to sit at the table next to Daryl Drake, a Chamber Board member and someone whose wisdom I rely on a lot. Daryl presented some very poignant ideas on the subject and I believe his testimony was well-received.

I pointed to page two of the Agenda for Economic Vitality, which states our support for a comprehensive study of the kind that this bill proposes.

I also tied it to the SAGE Commission’s work, by stating that once the Legislature has a complete picture of how we spend AND receive our tax revenues, they will be able to make more informed decisions.

Greg Peek, representing the Builder’s Association of Northern Nevada, followed my comments with a plea for SB 399 to include a study of removing depreciation of real property at the point of sale. The Chamber supports examination of that issue as well.

A Tax on Trucks is a Tax on You

The Senate Taxation Committee met for about six hours today to take up several bills.

I was there to testify against SB 368, which, originally, was intended to implement a weight-distance tax on Nevada’s trucking industry.

Chairman Bob Coffin, who introduced the bill, offered an amendment at the beginning of the hearing that gutted the bill and instead would impose a diesel tax increase of 12 cents per gallon and would institute a study of the weight-distance tax.

While the amended version is much better than the original bill that is linked above, the Chamber still opposes any single-industry taxes. Especially a tax that will make everything that we buy more expensive, including groceries.

90% of all of the goods that we consume in Nevada arrive in a truck. Any tax increase on moving those goods will be passed down and be included in the final purchase price of that good.

Lance Gilman is building the largest industrial park in the world, the Tahoe-Reno Industrial Center, in Storey County. That project could allow for Northern Nevada to become a warehouse, logistics, and transportation hub. We must be careful about doing anything that will make it more expensive to ship things in and out of here.

Most of the hearing centered on various studies that NDOT had undertaken over the last few decades that claim that trucks do not pay their fair share of road costs. The Nevada Motor Transport Association, however, hired two university professors who produced their own study that refuted NDOT.

Due to the late hour, I was forced to be brief in my testimony. I pointed out that the Chamber supports broad, user-based funding for roads, but that we oppose singling out any industry for taxation.

I then referred to our strong support for SB 201, the implementing bill of the RTC-5 ballot question. That would index gas taxes for ALL users of the roads, passenger cars and trucks. The voters were also given a specific list of projects that would be funded with the new revenue.

The Chamber welcomes a conversation on potential solutions for a statewide funding plan, but we believe that all highway users should shoulder the burden.

The Committee voted to “indefinitely postpone” the bill, as everyone is waiting for a final tax package at the end of the session.

The Costs of Doing Business

Several more workers comp bills were considered this week. I went to the table in opposition to two of them specifically.

The first, AB 511, came up on Monday in Assembly Commerce and Labor. This bill would allow employees to sue their employer for “bad faith” claims outside of the workers comp system. Current law specifies that the workers comp system is the “exclusive remedy” for employees and does not allow lawsuits for bad faith.

The second bill, SB 366, was heard in Senate Commerce and Labor today. Committee Chair Maggie Carlton amended the original bill so that it does not seem nearly as onerous as the original, which would have required employers to prove that an accident did not happen at work. Current law requires the employee to prove that it did. Unless an employer has video cameras that cover every inch of his property and they are running 24/7, there is no way for him to definitively prove that something did not happen.

Of course, any time you introduce the potential for increased and frivolous lawsuits into the system, costs WILL go up. Just as the med-mal discussion below, these lawsuits would be factored into the costs of workers comp policies and will have to be paid for by all Nevada employers.

Unlike health insurance coverage, employers are required to have workers comp insurance. The increased cost will have to come from somewhere. That may mean that a small employer can no longer afford health insurance for his employees, or those employees will have to pay more for their health coverage, or those employees may not have a place to work anymore!

To use a cliché, these bills and the med-mal issue seem to throw the baby out with the bath water. They try to attack the problem of bad actors by punishing everybody in the system. If there are a few insurance companies who are not treating workers comp claims with the seriousness that they deserve, then we should beef up our regulatory agencies to ensure that they do.

We must find a way to punish the bad folks, without sinking everybody else.

Once concern that several of the business lobbyists in the building have is that there is no holistic view of bills and issues that could negatively affect business.

We are dealing with health care coverage mandates, workers comp, med-mal, and whatever potential tax package is being cooked up. Each bill by itself may not be that bad, but all of the bills taken cumulatively spell trouble.

I have started making the same point each time I testify on one of these issues: Our members cannot take much more. Please do not put each of these bills into a separate bubble. We must look at all of these issues as a whole and ensure that we do not do more harm than good.

Paper or.....

Today was plastic bag day, as I spent several hours in the Senate Commerce and Labor Committee waiting for SB 397 to come up.

SB 397, proposed by Commerce and Labor Chair Maggie Carlton, would require all retail stores to charge 10 cents per plastic bag given out until July 2011, when all non-biodegradable plastic bags would be outlawed in the State of Nevada.

Senator Carlton’s purpose for introducing the bill was to deal with all of the plastic bag litter that she has encountered. Her contention is that there is not a strong enough recycling effort for these bags and far too many of them are getting thrown away.

While there were two people that rose to speak in support of the bill, the vast majority of those who had signed in opposed it.

I followed representatives from the retail association, the petroleum marketers, and the manufacturers. So, while I had several points jotted down that I had planned to make, I ended up just echoing the comments before mine and relayed to the Committee some of the efforts the Chamber has made in regard to increasing the use of recycling.

The main points against a ban on plastic bags are as follows:

1. It is a consumer choice issue. Consumers should be able to decide what type of grocery bag they want and retailers should be able to meet the demands of their customers.

2. Paper and reusable bags are already available at most of our retailers. Those same retailers offer large bins in the front of every store in which shoppers can deposit plastic bags for recycling.

3. Over 90% of Americans reuse their plastic bags.

4. Paper bags are more expensive to produce and buy than plastic bags. They are heavier and take more trucks to deliver. They cause more pollution and greenhouse gases and take up more room in our landfills.

5. Reusable bags are much more expensive than paper or plastic and could cause health issues if not cleaned between uses. Retailers are also concerned about theft with several opaque bags being brought in and out of the store.

6. Trex, a large employer in Fernley, takes used plastic bags and makes fence and decking material out of them. They are useful and they provide jobs.

Finally, a new fee or ban on plastic bags will make every trip to the grocery store more expensive.

Not exactly the type of bill we need in the type of economic environment we have.

Kick Our Doctors Out of Nevada

AB 495, heard in Assemblyman Bernie Anderson’s Judiciary Committee, was an all-day affair. The hearing started at 8 am with another bill, then proceeded for three hours until the floor session interrupted the proceedings. The Committee then reconvened at 6:30 pm to hear the rest of AB 495 and then still had another bill to hear after that!

AB 495 would roll back the med-mal reforms that almost 60% of Nevada voters approved back in 2004. The bill, as introduced, would repeal the limit on “non-economic” damages (pain and suffering) and would extend some of the time frames that plaintiffs have to file a claim.

When the hearing opened, the Nevada Justice Association (Justice League?) presented an amendment that would keep most of the current law, but would allow a verdict of “gross negligence” to be used to get around the non-economic damage cap.

We know that prior to 2004, physicians’ insurance rates were rapidly increasing, doctors were threatening to leave our state, and a trauma center in Las Vegas actually closed due to a lack of available specialists.

Since 2004, rates have decreased by as much as 30%, Nevadans have saved almost $400 million a year, and doctors are staying put. Even California has stricter caps on lawsuits than we do!

Of course, the reason we are having these discussions is the disgusting endoscopy clinic scandals that occurred last year. This is a perfect example of a few very bad actors causing havoc for all of the good doctors in our state.

This bill attempts to deal with the few by punishing everyone.

The Chamber testified that if the insurance rates of doctors go up, the insurance rates of EVERYONE goes up. The threat of lawsuits will not increase just the insurance rates of bad doctors, it will increase the rates for every doctor, who will then pass on the cost to YOU.

This bill allows trial attorneys to run amok and put right back where we were at the beginning of this decade.

We need to figure out a way to punish the bad actors and protect the public. The Legislature has been diligently working on increased inspection and review requirements. One option is to drastically increase criminal fines on doctors and nurses who, for instance, reuse needles, take their licenses away, and maybe even put them in jail.

Which is a greater deterrent? Potential jail time or a payout by your insurance company?

Let’s punish the bad doctors without burdening the entire state with higher insurance costs and provider shortages.

This is the end of a very long day that capped off a very long week.

Today found me testifying four different times in four different committees.

Since the Weekly Report e-mail already came out, I won’t rehash all of that.

But I should have added that the Senate Finance Committee heard SB 367 this morning, which has been introduced by the Governor. This bill comes directly from the SAGE Commission and deals with public employee retirement system (PERS) reform.

As you know, that is one of the main issues on our long-term spending reform agenda.

I testified in strong support of this bill and stated that the Reno Sparks Chamber of Commerce will not support any tax increases unless and until long-term spending reforms are implemented.

The Committee took no action on the bill today.

Up next week: gutting the voter-approved medical malpractice reforms on Monday, a slew of workers comp bills all week, a ban on plastic grocery bags on Wednesday, and Friday brings the deadline for all non-exempt bills to get through their first committee.

Prevailing Wage

Prevailing wage was the issue du jour in the Assembly Government Affairs Committee. While three bills were on the agenda, the committee barely got through two of them due to the large amount of people that signed in to testify.

I stepped forward in strong support of AB 298, a bill introduced by Heidi Gansert, who worked with Clara Andriola of the Associated Builders and Contractors. This bill would make much-needed and long-overdue reforms to the prevailing wage process.

For those of you who don’t know, any contractor who bids a public works project in this state that costs more than $100,000 must pay his workers “prevailing wage.” This is sometimes known as “Little Davis-Bacon,” after the federal law of the same name that came to pass in the 1930s.

The idea is to ensure that workers are paid a “fair” wage and one that represents the average wage in the area. The problem is that the way the system currently works, the formula favors collective bargaining agreements and taxpayers get left holding the bag.

The short version of the process is that the State Labor Commissioner sends out a survey to every licensed contractor in the state, who fills out the wages they pay in various trade categories on every project they worked on. The list also includes the location (county) that each job was performed in.

A few issues:

1. Very few companies actually fill out the survey. This makes the sample that much more unreliable. There is a specific sub-group of companies that are very good at returning these surveys: union contractors. Why? Because their collective bargaining agreement requires them to. I stated on the record today that is incumbent on this Chamber and the trade groups that we work to educate employers about how important it is to fill out this survey. It could mean more money in their pocket!

2. When filling out the survey, a contractor is required to list the work done on private AND public projects. This means that public project wages, which are inflated by the prevailing wage, are included in the final formula scheme. In other words, prevailing wages help determine the prevailing wage!

3. It is important to note that there is a large chunk of the prevailing wage rate that never gets into laborers pockets. Some of that wage gets funneled back to labor unions, which use that money for other things besides worker safety and welfare.

One of the beauties of AB 298 is that it would exempt K-12 and higher education construction projects from the prevailing wage requirements. During my testimony, I mentioned the Chamber’s strong support of the failed WCSD-1 failed school revitalization ballot campaign last year. I pointed out that we could build more schools and serve more children if we spent extra prevailing wage money on building school facilities.

Truth be told, the Chamber opposes any type of prevailing wage law (see page 7 of our Agenda for Economic Vitality in Nevada).

When asked by one Committee member if the Chamber supports eliminating prevailing wage completely or just reforming it, I replied: “Both.” AB 298 is a good first step.

The week is off to a fast start.

My morning began in the Assembly Government Affairs Committee, where “fire-safe” cigarettes were discussed. AB 229 would mandate that all cigarettes sold in Nevada be tested to ensure that they are easily extinguishable and protect people and property from fire. There was no opposition to the bill, as cigarette manufacturers helped craft it and the Retail Association proposed an amendment to ensure that their members (and the Chamber’s) are properly notified of those brands that have been approved.

The afternoon found me in Assembly Commerce and Labor, where I went to the table in opposition to two bills.

The first was AB 365, sponsored by Assemblywoman Sheila Leslie. This is yet another insurance mandate bill. This one in particular would require all small employer insurance policies to cover treatment for eating disorders. Again, while each of these bills may seem to have merit, and the proponents always argue that the cost is minimal, it is the added effects of all of these insurance mandates that really drive up health care costs.

Nevada is something like 3rd in the nation with the amount of health insurance mandates on small employers. We have over 50 mandates! Large businesses covered under ERISA plans have only 6 or so mandates to deal with.

When you add all of the workers comp bills to this, the dollars really start to add up.

The second bill which brought me to the table was AB 381. This bill would do away with binding arbitration in various consumer contracts, thereby driving cases into already overcrowded courtrooms. Arbitration can save both sides in a dispute a lot of money. Obviously, any company that has to deal with a new wave of attorney fees and court costs will pass on those costs to the consumers.

Packed Hearing Room for SB 201

The Senate Taxation hearing room was packed today for SB 201, the RTC-5 implementation bill. There were so many construction workers and labor union folks that showed up that a second hearing room was opened downstairs for the overflow.

The lineup included Mayors Bob Cashell and Gino Martini, County Commissioner John Breternitz, Reno City Councilman Dave Aiazzi, Derek Morse with the RTC, Norm Dianda with Q&D Construction, and developer Perry DiLoretto. I sat at the table right next to Skip Daily with the Laborer’s union, which doesn’t occur that often!

I pointed out that while we talk a lot about this bill creating 3,000 jobs, we don’t talk about what those 3,000 jobs mean to the rest of our Chamber members. The workers on these projects will have money to spend on the goods and services that our members provide.

The improved roads will allow all of us to get to work, home, and school quickly and safely.

SB 201 is also an economic development tool. While this Chamber works hard every day to ensure that our state’s tax structure remains business-friendly, we also need to ensure that our transportation system is adequate for our present and future needs. Companies looking to re-locate or expand their presence here want to be able to move their goods and their employees around the region efficiently.

The trucking association testified as neutral and the petroleum marketing folks had some issues. There was one Washoe County resident who testified in opposition to the bill, but she seemed to have more issues with how the sample ballots were distributed than with anything else.

While there were a few technical questions from some of the committee members, the reception seemed pretty positive.

The committee took no action on the bill today, but it needs to be out of there and to the floor by April 10th.

We really want to get this bill through as fast as possible so that we can start bonding projects and get people to work as soon as possible.

The Session has finally started...

It has been said that the Legislative session really started on Monday, which was the deadline for all the committees to introduce their bills. We finally know the lay of the land and the (somewhat) totality of what we have to deal with. While there is always the potential for leadership to introduce “emergency” bills, there is no way to quantify what those will be yet.

The next deadline is April 10th, when most bills must be through their first committee of introduction. This means that the next few weeks will be a flurry of activity.

I received a document the other day that has about 15 bills listed on it that could negatively impact the business community, 12 or so of those bills are workers comp related. There are some big deals in there and I will get more information out to Chamber members as I learn about them.

I took action on two bills today. The first was AB 313 in the Assembly Commerce and Labor Committee. As I had to testify in another hearing, I signed in as opposed but did not go to the table. As you can see from the link above, this bill would limit the amount of late fees that a landlord could charge a tenant if he/she is late with their rent payment. While this bill only affects a certain segment of our membership, the Chamber believes that this is an unnecessary intrusion into the private sector and that every business should be free to set their own payment policies and procedures.

I stepped up to the table in the Senate Government Affairs Committee to oppose SB 264. This bill would allow all local governments (counties, cities, school districts, library boards, etc) to impose, increase, decrease, or repeal certain taxes without having to come to the State Legislature for authority to do so.

Nevada does not have a home rule system whereby localities are free to set their own taxing and spending policies. All taxes imposed by a local government have to have been authorized at some point by the legislature. Of course, several local government representatives testified in support of this concept.

While the Chamber believes that there should be discussions about giving local governments more autonomy over their affairs, rules, and regulations, I testified that tax rates and policies should probably have the extra check and balance that the legislature provides. I quoted our Agenda for Economic Vitality in Nevada, which states our support for the “concept of reasonable tax and fee caps to prevent government from unnecessary expansion.”

I also pointed out that there could be unintended consequences if this bill were to become law. We all know that Clark County is the economic engine of this state. Could there be a scenario whereby that county raised taxes or fees so much that businesses have no incentive to remain or locate there? Would that reduction in tax base then ripple through our state budget and, therefore, our local budget? These are things that must be considered.

Tomorrow at 1:30 will find me in Senate Taxation testifying in strong support of SB 201, the RTC-5 bill. Come down to Carson and support us!

More insurance mandates...

Signed in as opposed to two more insurance mandate bills today.

Both the Senate and Assembly Commerce and Labor Committees meet at 1:30 in the afternoon, and both have jurisdiction over insurance mandate bills.

In the Assembly, AB 268 was up. This would require all businesses who aren’t self-insured to cover new chemotherapy treatments, including pills that can be taken orally. The argument was made by the proponents of the bill that a pill regimen could potentially be much cheaper than chemo treatment that involves a doctor visit, IV drip, etc. The insurance industry, however, argued that evidence in Colorado showed that the drugs were actually the much more expensive option.

Senate Commerce and Labor took up SB 192, which would require insurance policies to cover name-brand drugs, but only charge generic prices to its policyholders. Apparently, the patient would not even have the option of using generic drugs. As name-brand drugs are not cheap, someone will have to make up that cost. That someone would be every small business owner who pays for health care and prescription coverage for their employees.

The Chamber remains opposed to all new health insurance mandates, as they tend to drive up the cost of every insurance policy.

I sat in this morning’s Joint Ways and Means/Finance Committee meeting on the merger between the Nevada Commission on Economic Development and the Nevada Commission on Tourism. The Governor has proposed to merge the two agencies in an effort to balance the budget.

Most of the committee members expressed skepticism of the idea, acknowledging that each of the agencies have very different missions. Lt. Governor Brian Krolicki stepped up to the table to oppose the idea.

The afternoon was spent in Assembly Taxation, where I was pleased to testify in support of two bills.

The first, AB 146, is sponsored by Majority Leader John Oceguera, with strong support from Secretary of State Ross Miller. It would create an online “business portal” operated by Miller’s office that would allow any business in the state to go to one place to take care of all of their license, permit, and tax issues. One website would allow you to take care of all the various state and local agencies that a business must deal with when setting up shop or renewing their operation.

The Majority leader included the Chamber and other business organizations in a working group to work out any issues with the bill prior to the hearing. I cannot speak highly enough of this process, whereby a legislator brings forward an idea and actually puts together a group of stakeholders to work on it. Mr. Oceguera is well-known for doing this and he is to be commended for it.

The second bill that I testified in favor of is AB 275, which has been proposed by Minority Leader Heidi Gansert. This bill would ensure that banks and other financial institutions pay the same Modified Business Tax rate that every other business pays. It would also eliminate the discriminatory branch excise tax imposed on those same institutions.

Currently, most of the business community pays 0.63% of their payroll to the state. Banks, however, must cough up 2% of their payroll AND pay a $7000 per branch excise tax on any branch above one per county.

The Chamber believes that this is horrible tax policy. No industry should be singled-out for extra taxation and we are opposed to any tax per business branch location. No business should be punished for being successful and offering better service to their customers.

Given the general fund hole that the Legislature is staring at, I do not have high hopes for the passage of any bill that would actually decrease taxes. That doesn’t mean we should give up on our principles.

I am beginning to feel the affects of being the Chamber’s one-man show down in Carson.

I wanted to be in three different hearings at the same time this afternoon, so I signed in at one, testified in the other, and missed the third. If it weren’t for my intern Tony back at the office, I would be more confused than normal!

Senate Government Affairs heard SB 189 today, which would allow an employee to file a complaint in court without first going to the State Labor Commissioner. The labor unions seem to be upset with current Labor Commissioner Mike Tanchek, a great public servant. Maybe because he doesn’t give them everything they want. This is the same group that wants sole authority to pick the Labor Commissioner. I signed in as opposing this bill, but I was not able to attend the hearing.

I went before the Assembly Commerce and Labor Committee again today in opposition to AB 224, which would prohibit insurance companies from denying payments of amounts that are “not in dispute.” Representatives from the insurance industry testified that this language is ambiguous and consumers already have the right to sue insurers for denying payments and coverage. This bill also adds that an insurer is liable for any damages, “including, without limitation, costs and reasonable attorney’s fees.” I think we all know what can of worms that last phrase opens.

Tomorrow brings two bills that I will heartily support in Assembly Taxation: the creation of a statewide “business portal” website, and the repeal of the discriminatory modified business and branch taxes on banks.

Moral Obligation to Smoke and Drink

There was a very long hearing in Assembly Taxation this afternoon, and there were only two bills on the agenda!

I signed in opposing both, but only went to the table on one of them.

First up was AB 277, proposed by Assemblyman Bernie Anderson. This bill would raise the excise taxes considerably on liquor, including beer and wine. The money raised by this bill would go toward DNA testing and various alcohol and drug treatment programs.

The DNA issue arises from the tragic Brianna Denison case last year. It was during the course of that investigation that we all learned that the Washoe County crime lab had a large backlog of DNA samples and evidence that they had collected, but did not have the funding to expedite the process of analyzing all of the samples. AB 277 would provide money for that purpose.

AB 255, sponsored by Assemblywoman Sheila Leslie, would raise the excise tax on cigarettes by about $1 per pack to fund medical services to pregnant women. I went to the table in opposition to this bill.

In fact, in Assemblywoman Leslie’s opening remarks, she quickly listed all of the reasons that some would use to oppose the bill, and she was dead on! She even stated that this method was horrible tax policy, but that she was tired of seeing these necessary services go unfunded year after year.

The Chamber opposes both of these bills because we believe that there should be a nexus between any tax and the purpose for that tax. We also believe that one specific industry should not shoulder the entire burden of a tax that benefits the entire population. You can find our positions on taxation on page 2 of our Agenda for Economic Vitality in Nevada.

In other words, if DNA testing and health care for pregnant women are determined to be important government services that the state needs to provide, then we should all pay for it, not just drinkers and smokers (and the stores that sell to them).

I also voice our concern that AB 255 would make cigarettes in Nevada more expensive than in many of our surrounding states, including California. We don’t even want to mention internet sales. By driving sales over the border or to the internet, we could actually hurt our local retailers and maybe even bring in less tax revenue on these products than we do currently.

Finally, these bills would seem to provide a perverse incentive for all of us to smoke and drink as much as we can in order to fund these important programs! You have a moral obligation!

WC-3, the anti-growth initiative that the Chamber opposed last November, reared its ugly head in the Assembly Government Affairs Committee this morning.

It is now known as AB 119, a bill sponsored by Assemblywoman Sheila Leslie. The initiative and the original version of the bill were written by PLAN, the “Progressive” Leadership Alliance of Nevada. (Is it considered “progress” if we move toward California and away from capitalism?) But I digress…

While PLAN would have you believe that AB 119 is only meant to implement the voters’ intent; that is not true. The voters supported amending the Truckee Meadows Regional Plan, not Nevada Revised Statutes. In fact, the process was already in place to hold public meetings to deal with this issue; meetings that were cancelled once this bill was introduced. AB 119 may actually be slowing down the process of implementing the voters’ intent.

While the amended bill is not nearly as harmful as the original text that you will find in the link above, it still has some undefined terms in the text, such as “region,” “development pattern,” and “sustainable water resources.” All of the local governments supported the change, but our position is that this bill is totally unnecessary.

Representatives from the Builders Association of Northern Nevada did a superb job in proving that our current Regional Plan already accomplishes what AB 119 is “supposed” to do. Click HERE for some facts about water and growth.

One point needs to be made very clear: No one can develop a piece of dirt until that developer has the water rights in hand to serve that project. We can never over-develop. If we were to somehow run out of newly available water, nothing else could be built.

In fact, we have become more efficient at using our resources at the same time that we build more homes and businesses. Brand-new homes and office buildings use much less water than older developments.

I testified against the bill and then was interviewed by KUNR after the hearing. My basic point was that we have had responsible, managed growth in Washoe County for years. Our economy must have a certain amount of growth to survive and thrive. Our members depend upon the income paid to the construction workers who shop in our stores and consume our services.

AB 119 does nothing to help our current economic conditions. In fact, it could very well make it worse.

Several items today…

I went to the testimony table twice today.

The first time was in the Senate Judiciary Committee. The bill in question is SB 167, which has been proposed by State Treasurer Kate Marshall. It deals with unclaimed property, which is a complicated subject that I won’t delve into here.

Chamber member IGT offered an amendment to the bill, which would protect businesses from invasive outside audits performed in the name of claiming unclaimed property. I signed in neutral on the bill itself and urged the committee to consider and support the amendment. I pointed out that anything we can do to make our unclaimed property laws less onerous and more business-friendly would have a positive affect on attracting new businesses and industries to our state.

During the 11 am floor session today, the Assembly unanimously passed AB 165, a bill sponsored by Speaker Buckley that would implement required transfers from the state’s general fund to the rainy day fund. In other words, the Governor and the Legislature would be forced to set aside funds in the boom times to assist us in the down times. I testified in favor of this bill a few weeks ago in the Assembly Ways and Means Committee, as it is one step in our long-term spending reform agenda. There are other bills of the same nature that have been proposed by other legislators and the Governor, so we anxiously await those proposals.

I spent most of the afternoon in the Assembly Commerce and Labor Committee. AB 167, which would mandate that all insurance policies cover acupuncture treatment (except those offered by large companies covered under the federal ERISA law and labor union plans).

The Chamber is opposed to ALL insurance mandates, as they end up driving up the cost of insurance coverage, hitting our small employers the hardest. That could result in even more people ending up uninsured, which nobody wants. This hearing certainly had a different feel than the autism hearing a few days ago. The room was mostly empty and acupuncture is not nearly as emotional of an issue. The argument was made that acupuncture treatment could actually lower health insurance costs. If that is the case, then the Chamber fully supports allowing our members, the employers, to make the decision on whether or not to cover it. Some of them may jump at the chance! But they should not be required to cover it.

Finally, the Committee held a hearing on AB 150, which would require tanning bed operators to be regulated for the first time by the State Board of Cosmetology. The bill includes new posting requirements, parental consent forms for minors, and a requirement that any employee who operates a tanning machine must be 18 years old.

I have not heard back from any of our tanning bed members, so the Chamber has no official position on this bill. I am concerned, however, that the requirements of this bill may be too onerous for a small business operator, a concern also voiced by Assemblyman Settelmeyer at the hearing. The Indoor Tanning Association did oppose the bill, claiming that most of these protections are in place and operable already.

If you are a tanning bed operator and have interest in this bill, shoot me an e-mail.

Room tax passes

As my friends Anjeanette Damon (RGJ) and Jon Ralston (Las Vegas Sun) have already reported, the Senate passed the 3% room tax increase this afternoon.

The vote was 16-5, with the no votes all coming from Republicans (Amodei, Cegavske, Hardy, McGinness, and Washington). The vote finally came a day after five hours of an off and on hearing was held on Monday. It was assumed as late as last night that there were not enough votes to pass the petition.

Most of the opponents of the bill complained that taxation should not be done by initiative petition, but through the legislative process. The Chamber could not agree more.

We opposed this bill when it appeared on the ballot last November in the form of WC-6. We said then that we have elected officials for a reason. We delegate decision making authority on taxes, spending, and other matters to our councilmen, commissioners, and state legislators. We do not live in a direct democracy. We live in a republic. (I have been informed that since the initiative petition process is outline in the Nevada State Constitution, that we do, in fact, have a form of direct democracy. So, I stand corrected. But it doesn't mean I have to like it!)

Even the supporters of this bill admitted that this is not the process that they would have preferred, that their hands were tied and could not improve the language.

The proponent of this measure (the teachers union) has been telling the Legislature that Nevada needs new "broad-based" tax sources that are more stable than our current revenue. (In other words, they support taxing businesses more.)

I fail to see how an increase in the room tax (a percentage of the total room rate, not a fixed dollar amount) meets this definition, but why let good policy get in the way of cold, hard cash?

At least room rates are stable right now, right?

After this biennium, the money raised from this measure will go to teacher salaries and to improve student achievement. We should hold the teachers union to this. We better see improved student achievement.

Finally, the Chamber opposed this because there is no nexus to room tax and education. Our tourists will pay for the education of our children.

And did I mention that this law limits the room tax in Clark and Washoe counties to 13%? And that most of our hotels in Washoe are above 13% already? Meaning that Clark County tourists will pay 99% of the freight.

To: The Tourists of Clark County
From: The People in the Rest of Nevada

Thank you.

The hearing on AB 162 just ended after almost three hours of testimony, some of it very moving and emotional.

Valerie Clark stepped up to the table with other representatives of the insurance industry and the manufacturers. Their testimony really focused on the affect on small businesses that this bill would have. Once large employers, unions, and medicaid recipients are excluded (as this bill provides for), the cost of this bill would seem to fall only 30% of employers.

The committee took no action on the bill today and will work out some of the issues that were identified.

While most observers in the Legislative Building agree that some type of autism coverage bill will pass, the question is how broad and sweeping the final bill will be.

The Senate is STILL meeting in Committee of the Whole to take testimony on the 3% room tax increase. This bill sailed through the Assembly. The Senate seems to have a few more questions about it...

The Assembly Commerce and Labor Committee has convened and is discussing AB 162, which would mandate that insurance companies cover autism treatment.

The Chamber is opposed to any health insurance mandates because they increase the costs on EVERYBODY’S insurance policy. If every policy has to cover such issues, then every policy will be more expensive. At a time when employers are struggling to keep their workers employed, any additional costs could force them to raise premiums or eliminate coverage.

Just to be clear, the Chamber is not opposed to insurance companies covering autism or any other medical condition; we are opposed to the state government mandating that coverage. These types of coverage issues should be a decision made by the insured and his/her employer.

The hearing room in Carson City is packed this afternoon with autism activists, many with children. The hearing room in Las Vegas appears to be filled with even more people.

Valerie Clark, the Chamber’s Immediate Past Chair, is here to testify in opposition to the bill. She is head of the Chamber’s Health Care Task Force and is President of Clark and Associates, an insurance brokerage firm. She will present a unique perspective, that of a mother, a nurse, and an insurance broker.

I spent the morning in the Senate Finance Committee, which is one of the committees that determine where our money will be spent for the next two years.

I testified with a neutral position on SB 14, which would raise the marriage license fee by $5 and would deposit that money in the account that aids the victims of domestic violence. $20 of every marriage license fee already goes to that account.

A representative of the wedding chapel industry approached me and asked for our support of an amendment offered by Senator Maurice Washington that would tack on an extra $7 to the fee for certified copies of marriage certificates. The chapel industry has been in a downturn for quite some time and it feels that it would be very difficult to absorb any more costs. The amendment mentioned above may bring in most of the money that the original bill would bring in and would not affect any specific industry.

Given that the Chamber has no position on marriage licenses or the fees associated with them, I signed in as neutral and simply urged the committee to consider the amendment.

The next bill that the Finance Committee took up was SB 150, which would create a separate budget reserve account for K-12 education funding. Currently, if there is education money that has been unallocated after a biennium, it reverts to the state’s general fund. SB 150 would keep that unallocated money in a separate fund that could then be used for economic downturns like we are seeing today.

I testified in strong favor of this bill and reiterated the Chamber’s support for long-term spending reforms such as the one that this bill provides.

In a few minutes, the Senate takes up the room tax…

My day is almost over. It was my turn to testify in front of the Joint Taxation meeting at around 7 pm.

I had been proceeded by several folks, including representatives from the Nevada Manufacturing Association, the Nevada Motor Transport Association, the Las Vegas and Henderson Chambers and the brothel owners. The Retail Association followed me.

Most of our messages struck the same theme: Our members are hurting, so be very aware of the consequences of your actions this session.

I discussed the 60 retail closures in Washoe County last year, the commercial vacancy rates at 20 year highs, IGT's layoffs and Moana Nursery's struggles.

I presented the same message that we have been presenting since session started: Until long-term spending reforms are implemented, we will not support any tax increases.

If we do nothing this session to deal with the SAGE Commission recommendations, PERS/PEBP reform, prevailing wage, etc. then the problem will only get worse as we move forward.

If we raise taxes now and do nothing on the issues mentioned above, our hole will continue to get deeper and we will have to have more cuts and more tax increases as we move forward.

Our members need tax stability so that they can plan their own budgets.

I did receive a fairly warm reception from the Committee, although after almost 5 hours of testimony, everyone was tired and were ready to end the day.

If you have any stories that you can share with me regarding how you have had to deal with the current economic conditions, click on the e-mail link on this page and drop me a line. It is always more meaningful to bring real stories to the table in a hearing room.

And so we move forward with less than 90 days to go...

The Joint Taxation hearing has just begun in Carson City. Both the Senate and Assembly Tax Committees are meeting in joint session today from 1:30 to 3:30 and then again from 5-8.

The purpose is to have a public forum whereby various groups who are “affected” by Nevada’s tax structure can offer their thoughts and solutions.

First up is PLAN, the Progressive Leadership Alliance of Nevada. They are arguing that mining companies and other wealthy business owners are not paying their fair share and, therefore, the poor and middle class end up picking an unfair share of the tab.

One argument that has been made is that large corporations pay corporate profits tax in 47 other states and that we, as Nevadans, don’t benefit from any of it. It could be argued, however, that Nevadans may be paying for the tax policies of other states.

Imagine if several of those 47 states got rid of their corporate profits tax, don’t you think that would allow Wal-Mart or other national retailers to lower their costs nationwide?

Lastly, one of PLAN’s main complaints is that large corporations come into Nevada, make a lot of money off of us, and then ship it out of state to build schools and roads elsewhere.

How did PLAN gather all of this information and put it together for their report? They shipped some funds, paid by Nevadans, to Chicago to hire a consultant.

My scheduled time to address the committee is 6:45 this evening. Stay tuned…

No Way to Run a Railroad

I testified in opposition to AB 138 today in the Assembly Transportation Committee.

This bill, proposed by Assemblyman Bernie Anderson, would mandate that train engines in Nevada have two employees on board when traveling down a main rail line. The argument in favor of this proposal is that public safety demands it.

While I am certainly sympathetic to public safety concerns, I am worried about the precedent this sets for the business community as a whole. What’s to stop the Legislature from mandating two drivers per 18-wheeler? Or two people in the restaurant kitchen to make sure that the food is not contaminated? (Did I just create a bill draft?)

We all know what happened to the cost of our groceries as gas and diesel prices went up dramatically last year. This occurred because most of the goods that we consume are shipped to us by road or rail vehicles. Any new costly regulation, such as minimum staffing requirements, increases the costs of the goods that we all use. Given that most other states do not have this requirement, this could place Nevada at a competitive disadvantage.

The Legislature should let the railroads run the railroads.

Biting the Hand that Feeds You

Writing this a day after the marathon Senate Government Affairs hearing on public employee salaries and benefits.

A packed hearing room heard testimony from the Las Vegas Chamber of Commerce and the numbers gurus that were hired to study various state budget issues. You can find those studies HERE.

After that, the hearing went downhill fast. Union reps from the AFL-CIO, Metro police, firefighters, and teachers each came forward to present their case.

Choosing to bite the hand that feeds them, most of the speakers proceeded to bash the chambers of commerce and our members. We learned that the private sector is responsible for all of the world’s problems and we really have no right to even propose a reform agenda. (What right do we have to actually walk inside these hallowed halls and voice concern about where our tax dollars go?)

Chamber members also, apparently, do not pay enough in taxes.

When asked by Senator Raggio if the public employee collective bargaining process should be more transparent to the public (i.e., the employer), the unions stated no. (Everything is just fine. Trust us).

After all of the emotional outbursts, I stepped forward with two Chamber members to try to bring the discussion back to the world that most of our members live in. One member described the millions of dollars that his business has lost over the last year. The 150 employees that have been laid off. The struggle to provide health benefits. Having to bid jobs below cost just to get work. The outrageous prevailing wage black hole where our tax dollars disappear.

How many private sector businesses still offer defined benefit plans? How many people in the private sector can retire at age 50 and receive 75% of their highest salary level for life? How many of those same retirees receive health care benefits from their previous employer?

Maybe those who have been employed by the auto manufacturers do.

Can the State of Nevada afford to operate like Detroit?

And I'm still waiting for my COLA...

It’s a busy Monday morning at the Legislative Building. 8 am found me in the Assembly Ways and Means Committee testifying in favor of AB 165, which is a bill that Speaker Buckley has put forward that would force the Legislature and the Governor to set aside an additional 1% of general fund revenue and place it in our rainy day fund.

As you know, the Chamber has presented a list of long-term spending priorities that, we argue, must be considered before tax increases are discussed. One of those priorities is the implementation of a binding spending cap and required reserve accounts. This bill is a good step in that direction and forces the Executive and Legislative branches to set aside money in the good times in order to stabilize the budget during the downtimes, such as the environment we now find ourselves in. It is vitally important that we not spend every dime we are told that we are going to get and, instead, set money aside for the future.

I also mentioned our support for a separate Education Stabilization Fund, which would ensure that any k-12 money that is left over at the end of a fiscal year should be set aside FOR EDUCATION and not revert back to the general fund.

I am now in the Senate Judiciary Committee room listening to testimony on S.J.R. 2, which is a Nevada Constitutional Amendment that Senator Bill Raggio has put forward. It would implement what is commonly known as the “Missouri Plan,” which would provide for the appointment of judges by the Governor instead of by popular election. The Governor would receive a list from a Selection Committee and would choose from that list. The argument in favor of this proposal is that judges should not have to run around and raise money for their campaigns, that it may present a perception of a conflict of interest.

This bill passed the 2007 Legislature and, if it passes this Session, will go before the voters in 2010.

While the Chamber does not have a position on this issue, it would be a dramatic change to our judicial system. What do you think?

The Assembly and Senate Tax Committees are meeting in a joint session this afternoon to receive a report on the various tax abatements and exemptions that exist in Nevada state law. You can find a copy of the 294-page report HERE.

Assemblywomen Debbie Smith and Marilyn Kirkpatrick have been heavily involved in this issue over the interim. As the Legislature looks to plug a very large budget hole, every effort is being made to find dollars wherever possible.

The Chamber’s Agenda for Economic Vitality in Nevada states our support for “legislative review of all sales and other tax exemptions, abatements, and exclusions.” We want to ensure that all exemptions and abatements are fair, transparent, and fulfill their intended purpose.

The major issues that have cropped up recently are the STAR Bond districts that have been created in Washoe County. STAR Bond projects such as Cabela’s and Legends must generate a majority of their sales to out-of-state tourists.

Projects that are approved under the STAR Bond process are able to use 75% of the sales tax they generate for 15 years to pay back the bonds used to build the project.

One argument is that these various tax exemptions take needed money away from the school districts and other local governments.

The other side of that coin is that if properties like Cabela’s or Legends are exempted from 75% of the sales tax they generate, there is still the other 25% that did not exist before.

In other words, 25% of something is better than 100% of nothing. Neither of the properties mentioned above generated any sales tax prior to being built.

Assemblywoman Debbie Smith has concerns with any tax money being diverted away from our school districts.

The Chamber supports the use of STAR Bonds to attract tourist-oriented businesses. We do not oppose efforts to review and tighten up the process if necessary.

Trying this out for the first time. The goal of this blog is to keep you informed of events as they happen in Carson City.

I am sitting in on the Assembly Taxation Committee as they hear a presentation from Josh Hicks, the Governor's Chief of Staff. The topic is the "revenue enhancements" that are included in the Gov's budget. One of these enhancements is a reallocation of property tax revenues from those counties to the state general fund.

The Governor's office has argued that given the salary disparity between local and state government employees, the counties have the option of cutting salaries like the Gov has proposed for state employees. Of course, it was pointed out that those local government salaries are collectively bargained and are locked into labor contracts.

While the Legislature sometimes pretends that its hands are tied in regard to local government salaries, it is the Legislature that created NRS 288. That piece of Nevada law requires our county, city, and school district governments to deal with public employee unions. Yet, the state has exempted itself from these shackles. It is no wonder that local government salaries are higher than the state.

The tax committees have stated publicly that they are on a search for cash. One place they could look are the bank accounts of our public employee unions.

Welcome!

Welcome to the Reno Sparks Chamber's Nevada Legislature Blog. Stay tuned, as we'll be keeping you informed of the latest developments down in Carson this legislative session.