E!!

You’ve probably heard the social drinker’s jovial party line, “I don’t drink any more.  (dramatic pause)  Don’t drink any less, either…”

Yuk-yuk.

Today’s Morning Bell says this joke pretty much sums up Obama’s proposal for pay-as-you-go (PAYGO) legislation which comes equipped with an exception for entitemlement spending.  Their quoted quip: 

Commenting on President Obama’s exemption for entitlement spending in his PAYGO legislation, Committee for a Responsible Federal Budget President Maya MacGuineas said: “This is like quitting drinking, but making an exception for beer and hard liquor.”

Here’s a clip from the piece:

In theory, PAYGO sounds like common sense: Congress can only spend a dollar if it saves a dollar elsewhere. In reality, PAYGO is nothing more than a political gimmick that only enables higher spending and exploding deficits. Heritage fellow Brian Riedl explains:

1) PAYGO has never been enforced

• During the 1991-2002 round of statutory PAYGO, Congress and the President still added more than $700 billion to the budget deficit and simply cancelled every single sequestration that would have enforced PAYGO.
• Since the 2007 creation of the PAYGO rule, Congress has waived it numerous times in order to add $600 billion to the deficit. In fact, the entire “stimulus” bill violated PAYGO; Congress simply ignored the rule.

2) PAYGO’s design is flawed

• PAYGO exempts all discretionary spending, and would also allow all current entitlement programs like Social Security, Medicare, and Medicaid to continue growing on autopilot. It affects only new entitlements or tax cuts that may be created in the future.
• Even if PAYGO were fully enforced, entitlement spending would still grow 6 percent annually, and discretionary spending could grow without limit.

Already this year Obama expanded Medicaid liabilities by $200 billion over 10 years, and he is now pushing a public health insurance option that would cost $452 billion per year, or more than $6 trillion over a 10-year period. How does Obama plan to pay for all this new spending under his new PAYGO legislation? He doesn’t.

Obama is banking on trillions in exemptions to PAYGO over the next decade, including the one for his health care reform plan which will have to run big deficits if they get it passed.  PAYGO is a farce, sham, mockery, etc.  As is politics in this country.

Pass the vodka, please.

Fact:  Democrats control the Nevada State Senate, 12-9.

Fact:  Due to the 2/3 super-majority rule, Nevada Democrats cannot pass a tax increase without the votes of (at least) two Republican senators.

Fact:  No Republican senator would dare to vote for a tax hike without the blessing of Senate Minority Leader Bill Raggio (R-Reno).

Conclusion:  Whether or not Nevada’s citizens, businesses and/or tourists get socked with a huge new tax hike in 2009 pretty much depends on Sen. Bill Raggio.

Action Item:  Call, fax, or email Sen. Raggio and respectfully urge him to oppose tax increases in these, the final days of the 2009 legislative session.

Toll-free Phone: 1-800-992-0973  or  1-800-995-9080
Fax: 1-775-786-1177
Email: wraggio@sen.state.nv.us

Action Item 2:  Forward this post to your friends!

Steve Wynn on Jon Ralston’s Face to Face:  “Anybody who raises taxes now is psychotic.”

Apparently there’s a guy working at the Nevada Policy Research Institute who is smarter than the entire Nevada legislature combined.

How so?

He went through the state ledgers line by line and, applying some basic principles and setting a few reasonable priorities, came up with a proposed budget of $5.1 billion.  Which, unlike the budget proposed by the Nevada legislature, stays within our current revenue projections. 

Oh, wait, that’s right:  the state legislature still has not released their budget for public discussion.  Even though they’ve been meeting up in Carson City for months.

Said a legislator who asked not to be named, “I mean, come ON, guys.  This stuff is, like, really hard.”

Says Geoffrey Lawrence, the fiscal expert at NPRI who put the proposed budget together, ”The reason the legislature and governor haven’t been able to balance the budget is that they’ve been unable or unwilling to set priorities.”

Now we wait to hear what the Economic Forum has to say.  We expect they will project lower tax-revenue than previously anticipated.  And that lawmakers will then propose record or near-record tax increases.

If they do, remind them of the four basic principles that provided the basis for NPRI’s budget:  sensible prioritizing, consistent application of government rules and taxes, agency thrift, and “last in, first out” (the elimination of some programs created and funded by Nevada’s record 2003 tax increases – which never should have happened).

If  you can, call and urge these NV legislators to vote against the budget:

Sen. Reid       202-224-3542

Sen. Ensign     202-224-6244

Rep. Heller     202-225-6155

Numbers for the “Mod Squad” in the Senate:

Evan Bayh (IN): 202-224-5623
Mark Begich (AK): 202-224-3004
Michael Bennet (CO): 202-224-5852
Thomas Carper (DE): 202-224-2441
Kay Hagan (NC): 202-224-6342
Claire McCaskill (MO): 202-224-6154
Mary Landrieu (LA): 202-224-5824
Joe Lieberman (CT): 202-224-4041
Ben Nelson (NE): 202-224-6551
Jeanne Shaheen (NH): 202-224-2841

Also… these Republicans are on the fence:

Arlen Specter (PA): 202-224-4254
Olympia Snowe (ME): 202-224-5344

Whatever your political leanings, you should give yourself the gift of a quick education and read this 12-page report from Veronique de Rugy of the Mercatus Center at George Mason University.  It is an excellent overview and contains many easy to understand charts, graphs, and summaries.

There is no denying that this budget contains enormous spending increases and will lead to unprecedented levels of national debt.  And Obama’s ”spending cuts” are nowhere to be found.  (Where is the promised scalpel, sir?!)  For example: 

– Obama proposes to move some items from the “discretionary” to “mandatory” spending category, but that is just re-arranging chairs.

– About half the total “savings” come from tax increases.

– Another large chunk of “savings” is really just money ($170 billion a year) that won’t be spent in Iraq after 2012.  But the Bush administration never planned to extend anything like the current levels of spending beyond 2012.  It’s not “saving” to not spend money that was NEVER going to be spent.

Fake savings and tax increases aside, this budget is scary because it is a permanent expansion of the federal government as a percent of GDP.  The simple chart on page 12 sums it up very nicely.  De Rugy, an expert in her field, predicts “slower growth rates, higher unemployment rates, lower standards of living, and higher levels of poverty.”

Change is definitely on the way, folks.  And you better hope your family is spared.

That’s a line from one of our favorite Adam Sandler movies, Waterboy. 

He yells it at a KFC colonel look-alike professor who is trying to convince him that contrary to what his back woods Mama Says – “alligators are angry because they have all them teeth and no toothbrush” - alligators are ornery because they have an enlarged medula oblangata.

“So you see, Bobby Bouche, your mama is just wrong.”

-

And on the subject of being wrong, Max Schultz claims Yucca Mountain is not dead.  Enough money to keep the project alive (see Obama’s budget) is all the proof we need.  No matter what Harry Reid says.

It is now the eve of the 75th convening of the Nevada Legislature.  But don’t get too excited, kids!  Tomorrow will be a day of glad-handing and back-slapping and silly grinning.

Anyone waiting for actual state business to be done will have to wait (at least) until Tuesday.  Longer, probably, since the the Dems still have not put forth a comprehensive budget proposal, and it’s going to be more than a 5 minute job to solve our $600 million budget shortfall.

Even then, with the Dem super-majority in the Assembly, the best that minority leader Heidi Gansert will be able to do is convince her team that supporting tax-and-spend policies is bad for their electoral futures.  And if they don’t believe her and choose to join the Dems in a “bi-partisan” action, I’m guessing it’ll be D-Day for them in 2010.

Update: Steve Sebellius has the Democrat “plan” – all two vague-sounding, double-spaced, extra large font pages of it – here.

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Nevada’s most incorrigible tax hater, Chuck Muth, penned a pretty good one today.  Read it for yourself, but here’s a sum-up with a little E!! on the side:

The Silver State’s usual tax-and-spend suspects are crying a river over what amounts to a 10% budget cut (not 15%, not 22%, and not 34%, as has been reported by various hysterical persons who shall go unnamed).

Yes indeedy, 10% is the official figure that Andrew Clinger, the state’s official Budget Director, is officially using in his official correspondence with people.  According to Clinger, Gov. Gibbons’ proposed general fund budget this year “is $632.9 million smaller than last biennium,” a reduction of 9.3 percent. 

So why all the discrepancies, disparities, and dispepsia over huge budget cuts?  Let’s have a little history (and MATH) lesson and see:

2003:  The Legislature increased taxes by more than 3/4 of a billion dollars.  And there were no spending cuts.  Then-REPRESENTATIVE Jim Gibbons criticized then-Governor Kenny Guinn for not cutting 3/4 of a billion dollars from the budget rather than raising taxes. 

2005:  Wonder of wonders, Nevada had a budget surplus of about 3/4 of a billion dollars.  Gov. Guinn put some of the surplus into the Rainy Day Fund and rebated $300 million back to the taxpayers.  The general fund budget was around $6 billion.

2007:  Gov. Guinn is out; Gov. Gibbons is IN.  Gibbons SHOULD HAVE proposed a budget which included the 3/4 of a billion in cuts he’d suggested to Guinn back in 2003, which is to say he should have proposed a budget of around $5.5 billion (allowing for inflation and giving a little leeway and such).  But instead Gibbons suffered from sudden budget amnesia (SBA) and proposed about a billion dollars MORE in state spending.  So the Gibbons budget was nearly $7 billion.

2008:  Astonishingly enough, The Economic Forum projects actual revenues coming into the state coffers at around $5.5 billion.

SO, here we are, 2009:  Looking at the insufficient funds left over from 2007’s budget and faced with having to roll back spending to 2005 levels based on current state revenues.

AND the big-government gurus want the 2009 Legislature to spend NOT ONLY the $7 billion the government already can’t afford, but ANOTHER $1 billion on top of that!   Yes, it’s true:  the spendy spenders are demanding $8 billion in government spending while the state is only taking in $5.5 billion.

AND – here’s the big finish, folks! – the Spenders are calling any talk like the Talk I just talked (i.e. only spending what we are actually taking in), an “irresponsible $2.5 BILLION BUDGET CUT.”

.

Any questions?!

Here’s another tired story about how the most helpless people in our society – our disabled, our children, and our disabled children - will be harmed if the Nevada legislature makes any more cuts to the state budget.

(yawn)

The thing about these kinds of stories is that most people don’t dare criticize them because then you’re called a supporter of “unconscionable” acts and a heartless hating hater of autistic kids.

Unless you’re me, and then you dare.

As a general rule, large government bureaucracies run so inefficiently and are guilty of so much over-spending and waste that any run-of-the-mill efficiency auditor could find ways to shave 5 to 10% without much of an impact on anyone.

If you doubt me, check out some of the information on the new Transparent Nevada website.

Like the sum total of the astronomical above-market salaries, overtime, and benfits packages being paid to some state employees.  A few reasonable adjustments and everyone could keep their jobs while the state saves about $100 million.

Or the astoundingly large vendor contracts that exist just here in Clark County.  You cannot convince me that out of the six $100,000,000 – ONE HUNDRED MILLION DOLLAR – contracts, there are no reasonable cost reductions that could be made while still maintaining adequate service levels.

It’s all about identifying and reducing inefficiency and waste - not cheating the poor kids out of their speech therapy classes.

Patrick Gibbons, a researcher-analyst at the Nevada Policy Research Institute (NPRI), has a new piece up.

It’s worth the read if you want to (1) understand where Nevada REALLY is with its budget issues, (2) be informed about the questions that remain unanswered, and (C) be reminded that when it comes to politics and money, the devil is always in the details.

Gibbons points out that depending on which newspaper, pundit or politician you believe, you might think Nevada has a budget shortfall of $5.6 billion, $4.5 billion, $2.5 billion, $1.2 billion – or no real shortfall at all. And so you might think we need to cut between 34% and 0% of the budget in order to cover the shortfall.

The questions are: Who is right, and what accounts for the differences in math? And how can the public (or our elected officials) have intelligent policy discussions if we can’t even agree on the basis basics?

In order to wade through it all, one first needs to understand that the General Fund (GF) is not the same as the total state budget. In fact, the GF makes up only 37.5% of the overall budget. The recommendation for the General Fund for the current biennium (FYI: we do our state budgets two years at a time, if you didn’t know that) was $5.8 billion, but the overall recommendation for the state budget was $18 billion.

The other thing to know (ask!) when talking about either the General Fund or the overall state budget is whether people are extrapolating their numbers from (1) the originally projected and appropriated sums or or the currently projected sums, and (2) ditto on the revenue.

Read the NPRI piece and see for yourself!

(And if you have any questions, submit them here and we’ll see if we can get Patrick to stop by and explain things.)

Read about it here on Boston.com.

Like many Americans last week, I tuned in for the 30-minute Barack-o-mercial. 

In between the anecdotal close-ups of struggling American families – a widow working two jobs and raising two kids; a husband and father worried about his job at the Ford plant – I noted that Obama’s megacommercial failed to present hard data on the cost of his proposed programs and said nothing about our huge federal deficit and the corresponding budget pressures he will face once in office. 

Obam’s description of his health care plan – which “includes improving information technology, requires coverage for preventive care and pre-existing conditions, and lowers health care costs for the typical family by $2,500 a year” – sounds very nice, but there has been no independent economic analysis confirming that costs will really be reduced by that (or any) amount.

Obama simply Hopes that spending $50 billion on his proposed Changes over the next five years will save the system money.  But even if his optimistic estimates prove out, Obama’s plan does not stipulate that the net savings by insurance and health care providers will result in lower premiums for consumers.

And then we have Obama’s promises to “cut taxes for every working family making less than $200,000 a year…  Give businesses a tax credit for every new employee they hire…  Eliminate tax breaks for companies that ship jobs overseas…  Help homeowners by freezing foreclosures for 90 days… Provide low-cost loans to help small businesses pay their workers and keep their doors open…”

Independent analysts have estimated that combined with our current budget shortfalls, these and other of Obama’s proposals will likely result in a $1 trillion deficit next year.  That being unthinkable, some purging will be necessary.  But which of his programs will Obama cut, and why has he been promising all of them if he knows at least some must go?

Though much of his infomercial focused on the “hard realities” of life for select American families, Obama seems unwilling or unable to face reality himself.  It seems he could stand to learn something from that widowed mother of two who has to settle for half instead of whole gallons of milk when the money runs short – and doesn’t promise her family otherwise on the way to the store.

Patrick Gibbons of the Nevada Policy Research Institute has an excellent education blog post up.  It addresses the disproportionately high cost of new school construction in Nevada compared to other states.  Re-stated:  we are great at being inefficient.

Apparently, Nevada ranks third in the nation in construction costs per student.  Gibbons reminds us of the billions voters recently approved for new Clark County schools and then does the math.  It comes out to roughly $130M per school (though, to be fair, Gibbons says the school district will use some portion of the funds to refurbish old buildings).

There are quite a few things Nevada could do to shore up efficiency and reduce spending.  Including making it easier to form charter schools and create and use school vouchers, so financing for at least some new school construction can move to the private sector.  

Pushing the risk of building the schools onto the private sector naturally creates incentives to keep construction costs low – because their costs have to be recouped by attracting students – but even if they should spend an excess, it wouldn’t be the taxpayers’ problem.

According to Yahoo! Finance, Nevada is behind only California, Arizona, and Florida in terms of total state budget shortfall.

Nevada’s budget gap is 16% of the total state budget or $1.2 billion.

Nevada has the worst foreclosure rate in the nation, and falling tourism and gambling revenues has slowed the economy dramatically.

A special legislative session in June resulted in budget caps and cuts, but it’s quite likely another special session will have to be called – after the elections in November.

Whoa, I almost missed this part of the story!  Check it out:

Bob Loux, Grand Propaganda Poobah for Nevada’s Nuclear Waste Policy Office, didn’t just redistribute funds in the form of unauthorized 2008 raises.  Apparently he’s been over-paying himself and his staff for years.

According to figures released by the governor’s office yesterday, Loux over-paid himself and his staff (i.e. exceeded his budgeted salary amount) for fiscal year 2007 by 6.69 percent.  This year, he exceeded his budget by 12.06 percent. And for next year, he was planning to exceed by 18.99 percent.

As for his personal salary, Loux was budgeted to be paid $114,088 this year but jacked up his salary more than 27 percent to $145,718.  He was budgeted to be paid $114,088 again next year (due to the statewide salary freeze) but set himself up to rake in $151,542 instead. 

Here’s the kicker:  These raises look to be about more than just the immediate extra cash.  Turns out Loux is eligible to retire on October 8, 2008.  And his already generous retirement package will/would reported be based on his ending salaries for his final three years of service. So it sure appears as if Loux was jacking up his salary in an effort to rip off taxpayers for higher retirement benefit over the next twenty or thirty years.

Assemblyman Morse Arberry was right on Tuesday.  Bob Loux shouldn’t just be fired; he ought to be prosecuted and thrown in jail.  AND stripped of his inflated retirement benefit.

(Hat Tip to Chuck Muth’s News and Views.)

Chuck Muth of Citizen Outreach has filed a complaint with the District Court of Carson City asking for the removal of Bob Loux – executive director for the Nuclear Waste Project Office of the Agency for Nuclear Projects for the State of Nevada – from office for malfeasance as provided for in NRS 283.440.

According to NRS 283.440, “Any person now holding…any office in this State…who is guilty of any malpractice or malfeasance in office, may be removed therefrom as hereinafter prescribed in this section.” 

According to a September 9, 2008, story by Cy Ryan of the Las Vegas Sun, Mr. Loux gave “himself and his staff an unauthorized 16 percent pay raise,” well above levels set by the Legislature for his office. 

On September 10, 2008, Brendan Riley of the Associated Press reported that Mr. Loux “apologized to the lawmakers’ Interim Finance Committee” (IFC) at the hearing on September 9, 2008, “for giving himself and other agency staffers unauthorized pay increases of up to 16 percent.” 

According to the AP report, Mr. Loux’s agency falls under the governor’s office, but Mr. Loux ”didn’t report the pay increases to the governor and instead signed the paperwork needed to authorize the higher pay.”

The raises came to light at the IFC meeting because Mr. Loux had overspent his budget – which in itself is malfeasance in office per NRS 353.260 (copy attached).

According to the statute, “It is unlawful for any state officer, commissioner, head of any state department or other employee, whether elected or appointed, to expend more money than the sum specifically appropriated by law for any such office, commission or department.”

Mr. Loux admitted to the IFC that he both overspent his budget and personally approved the unauthorized pay increases. “I take full responsibility for all of these errors,” Mr. Loux said.  “They were done by me.”

In an official letter to Mr. Bob Loux calling for his resignation, Nevada Gov. Jim Gibbons noted that a review by the Budget Office discovered that “there has been a history of salaries in (Mr. Loux’s) office paid well over the amounts budgeted” and that “increases have been made without my approval and in violation of NRS 223.085.”

According to a report by Ed Vogel in the September 11, 2008, edition of the Las Vegas Review-Journal, Mr. Loux’s “salary manipulation” resulted in Mr. Loux receiving a salary of $151,542 per year – well in excess of his authorized, approved and budgeted salary of $114,088.

In addition, the Budget Office review referenced by Gov. Gibbons shows that Mr. Loux’s willful and unauthorized actions resulted in salary increases for every member of his staff in excess of 27 percent higher than budgeted for Fiscal Year 2008, and in excess of 32 percent higher than budgeted for Fiscal Year 2009.  In one case, one employee was scheduled by Mr. Loux to receive a salary increase next year which would have been more than 50 percent higher than budgeted.

According to Mr. Vogel’s story today, Mr. Loux has rejected Gov. Gibbons’ request for his resignation, saying “I am not going away.”

We’ll soon see!!

According to the AP, Bob Loux – head of Nevada’s Nuclear Waste Projects Office (NWPO) – took an ex-employee’s salary and gave it to himself and the rest of his staff in the form of double-digit pay increases. In doing so, Loux exceeded his approved budget and raised his own six-figure salary to over $132,000 a year – significantly more than the earnings of many state department heads.

Assemblyman Morse Arberry said Loux could be thrown in jail because “it’s unlawful for any state officer to do what he’s done.” Speaker Barbara Buckley noted that other state employees have received raises of just 2 percent while pulling double and even triple-duty because of a hiring freeze.

With this attempted swindle by Loux, the NWPO’s days of unsupervised slush-funding may finally be coming to an end. A full agency audit is now to take place.

It has been suggested by some that Loux should “pay back” the money. I agree – but first, he should do the other honorable thing and resign.

You can help by contacting the NWPO directly and urging Mr. Loux to quit, or by demanding that the seven members of the Nevada Commission on Nuclear Projects (Dick Bryan, Susan Brager, Larry Brown, Joan Lambert, Steve Molasky, William Roberts and Paul Workman) give him his walking papers.

Here’s the contact information: nwpo@nuc.state.nv.us or call toll-free: (800) 366-0990.

This past Friday, Louis Dezseran @ the Nevada Policy Research Institute posted a disturbing commentary on excessive government pay and perks.  Here are some excerpts (emphasis mine):

Last year, 162 Washoe County employees each cost taxpayers more than $100,000, while 61 Clark County employees each cost taxpayers more than $200,000. One Clark County official made $266,562 – almost double the salary set by law for Nevada’s governor. 

An open records request found that the City of Las Vegas paid more than $21 million for overtime, the State of Nevada spent over $29 million, and Clark County paid the most at more than $32 million in one year.  One Vegas city employee made more in overtime than he made in base salary. Multiple Clark County fire officials made close to $100,000 each in overtime.

Further, state and county audits found that some public employees received overtime pay despite it not being approved in advance by supervisors, that several law enforcement personnel received more overtime than their contracts allow, that some law enforcement officials were paid for overtime they did not work, and that some Laughlin police officers received both regular salary and overtime pay for the same shifts.

Public employees in some counties receive extra holiday pay for working on such faux holidays as “Family Day,” “Nevada Day” or the employee’s birthday.  Some public employees enjoy inappropriate round-the-clock use of taxpayer-funded vehicles. 

Finally, some county employees taking college classes are fronted the entire cost of tuition and books, then are paid time-and-a-half for hours spent in class.

It is commonly argued that police and firefighters have jobs that are more dangerous than the average citizen’s, so higher pay is appropriate.  But according to the Bureau of Labor Statistics, law enforcement and firefighting actually do not rank in the country’s top ten most dangerous occupations. Lower-paying occupations in construction, mining, fishing, roofing, farming, trash collection, manufacturing and the military see more deaths and injuries on the job than do either law enforcement or fire fighting. 

Where is accountability to Nevada’s taxpayers?  Where is the fairness to our private sector employees who earn far less than our government workers for doing essentially the same jobs?  And where is the outrage that irresponsible payroll spending by our elected officials has helped create Nevada’s current economic situation?

I encourage Nevada residents to contact their state Senators and representatives in the Assembly and let them know we expect them to pass economic reforms that will limit government spending on the salaries, overtime, and perks of our public employees.  If you receive a response, please email me or post a Comment so we can track results.