​In a major upset last week, a leading old Democrat warhorse lost his primary election for his New York congressional seat. Joe Crowley, a ten-term incumbent, had been touted as a replacement for minority leader Nancy Pelosi as speaker if the Democrats regain control of the House. But he was beaten by Alexandria Ocasio-Cortez, a 28-year old political newcomer.
Some folks are comparing this upset to the defeat of Republican minority leader Eric Cantor in 2014 by Dave Brat in Virginia. There have been few other upsets that are a good comparison. Even Brat was not outspent 18 to 1 by his opponent, as Ocasio-Cortez was.
Ocasio-Cortez is a member of the Democrat Socialists of America, a far left group inside the Democrat party that champions the policies of Vermont Independent Senator Bernie Sanders. For anyone who thinks socialism is not fundamental to the modern Democrat party, consider this primary result and the continuing successful insurgence of the Sanders wing. Others may call them progressives, but they are socialists and proud of it! And she with a capital “S” at that.
Ocasio-Cortez will almost certainly be going to Congress from this heavily Democrat district in Queens; Republicans have no chance. So, Democrats as a party have suffered no setback with her election, despite the loss of one old warhorse. Her election also suggests Pelosi will return to the speaker’s podium if the Democrats can wrestle control from Republicans.
From an image perspective, the modern Democrat party should be quick to embrace her. She provides a youthful counterpoint to a decrepit party dominated by the likes of Pelosi, Maxine Waters, Hillary Rodham Clinton, Joe Biden and Sanders. So, the Democrats should put this socialist right out front.
And she’s already attuned to the drift – dare we say evolution? – of Democrat policy positions anyway. Big time.
Today’s Democrats embrace “free” college tuition, “free” healthcare, open borders and hatred of President Donald Trump. All of these are embodied in the fresh new face of Ocasio-Cortez, coupled with Old Man Sanders in the Senate. In fact, she as much as anyone has pioneered their effort to abolish the federal Immigration and Customs Enforcement agency.
Pelosi, Sanders, and Waters all want the same things the Democrat Socialists of America want. They’re just afraid of embracing the “socialist” title.
But the modern Democrat party looks old and tired when two of their leading candidates for president are pushing 80, those being Biden and Sanders. Sure, Trump is over 70, but running someone who is older than Trump in 2020 is likely to yield the same result as in 2016.
Republicans and others should understand that saying one is progressive is just slapping lipstick on a pig; it really means socialist. Socialist plus a few other things. The roots of socialism go far back and mean coercive collectivism, whether the harsh brutality of Karl Marx or the misguided good (but still coercive) intentions of those from a religious bent.
Progressivism is less than 150 years old, and means socialism plus at least the conceit that progressives are our enlightened betters who should rule us peons.
Of course, as Hillary Rodham Clinton said, “At this point, what difference does it make?”
As a practical matter, Democrats should own it all now with this fresh new face as a party leader. We’re sure Ms. Ocasio-Cortez will perform admirably. They believe she has the message they need to gather and hold the youth of this country.
So what if she alienates older Democrats who are just hanging on hoping their team starts eventually to tack back toward the center. It’s not going to happen, so Dems might as well finish kicking them out the door. Eventually, Dems think, those folks will all be replaced by the younger generation that’s been heavily indoctrinated by the education system to socialism, and they’ll soon prevail anyway.
And in ten to 20 years, they’ll be winning elections by landslides.
Unless people start looking up from their smartphones long enough to realize we’re losing the precious constitutional republic, rights, freedoms, prosperity and hope previous generations left us. For our children, for our future, we need to turn things around. That’s what we’re about.

​Ron Knecht is Nevada Controller. James Smack is Deputy Controller.

​Jack Phillips, a Colorado Christian cake artist, was known for his custom-designed masterpieces. In 2012, two men asked him to prepare a special cake for a local celebration of their upcoming Massachusetts marriage. At the time, Colorado law did not allow same-sex marriage.
Phillips politely declined, saying his religious faith didn’t allow him to participate expressly via his art in celebrating their marriage. He offered to sell them any product he made, but he wouldn’t prepare one specifically endorsing a gay union (nor Halloween, alcohol or nudity).
They filed a complaint with Colorado’s Civil Rights Commission, even though there were other cake-makers in the area who would have provided the cake they sought. Their action triggered hateful phone calls, death threats and legal proceedings against Phillips.
During a hearing, commissioner Diann Rice said, “Freedom of religion and religion has been used to justify all kinds of discrimination throughout history, whether it be slavery, whether it be the Holocaust … it is one of the most despicable pieces of rhetoric that people can use to – to use their religion to hurt others.” In World War II Phillips’s father helped liberate a concentration camp and thus witnessed personally results of the Holocaust atrocities.
By Rice’s logic, if someone acting in the name of a religion does something awful, then others acting for religion are also guilty of the awful behavior and their position is null and void. By her logic, declining to participate in a celebration is a legally actionable hurt to the celebrants, but forcing someone to participate does no hurt, harm or damage to the person so compelled. And by her logic, declining to put a specific message on a cake is morally equivalent to supporting slavery and the Holocaust.
Her commission ruled Phillips had violated Colorado’s law prohibiting discrimination on the basis of sexual orientation. It imposed a three-pronged penalty that caused Phillips to cease making wedding cakes and lose 40 percent of his business volume. State courts upheld the action, even though three cake artists refused to make cakes with messages critical of same-sex marriage when requested by their customers, but the commission took no action in those cases. Thus, they used a double standard based on whether one’s viewpoint on an issue agrees with state dogma.
Clearly, the state violated Phillips’s First Amendment freedom of religion as extended by the Due Process clause of the Fourteenth Amendment to the states. Ditto, his free speech rights.
However, after he appealed the state action to the U.S. Supreme Court, it issued a decision Monday on very narrow grounds that focused mainly on the egregious hostility of the commission toward religion in denying his rights. The decision failed to address the conflict between federal constitutional rights of individuals versus limitations and compulsions on people and businesses states may seek to impose merely by labeling them “public accommodations.”
The two men claimed Phillips used his religious faith as a pretext for discrimination, even though he has served gay people for 24 years and offered to serve them. He has not discriminated against people based on their identity. He just refused to speak their message with which he disagreed.
Our view on homosexuality is reflected in the facts both of us have long had gay and lesbian friends and associates, welcomed them into our homes and fed them, and had some of them involved in our most intimate family business. We teach children to respect and be decent to all people and to accept and accommodate them as much as possible despite differences.
But the issue here is collective coercion. Many statist liberals and progressives believe their views about how people should treat each other justify bringing the full coercive power of the state against anyone who violates their personal norms. They think it does no harm to people forced to toe their ideological lines.
They’re wrong. It does immense harm. Coercion is aggression. It is oppression. It is often thinly disguised hate. Ultimately, people like Diann Rice are dishonest, hateful and vicious. Most other progressives are, often unknowingly, merely destructive of net human wellbeing and fairness. We need to recover the balance in these matters we’ve lost in recent decades.
Ron Knecht is Nevada Controller. James Smack is Deputy Controller.

​Ayn Rand, the hero author of many a conservative and libertarian, once said: “We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission.”
A frightening statement indeed. Especially since the essence of America’s Constitution is the opposite: the federal government has limited powers and the people and states retain all freedoms not expressly denied.
Ms. Rand passed in 1982, so the quote antedates that time. Decades ago she was already seeing so much where the “if it pleases the crown” mentality had invaded all parts of our daily lives. Several examples Immediately come to mind.
We cannot own real property without paying taxes to the state.
We cannot operate a motor vehicle without state mandated automobile insurance and paying fees to the state to register the vehicle and operate it.
We cannot hunt or fish without a license from the state.
We cannot operate a drone without a license from the government.
We cannot get married without obtaining a license from the state.
So, are we truly free?
This reminds us of another Rand quote: “Freedom: To ask nothing. To expect nothing. To depend on nothing.”
The basic question: “Are we really free?”
We submit that, in many ways, we are still free. We do still have the rights guaranteed by the Constitution. Freedom of speech, freedom of religion, the right to bear arms, the right to a fair and speedy trial, and protection against unreasonable searches and seizures, just to name some of our Constitutionally protected rights.
Still, even these basic freedoms are under attack. Many constitutionalists believe that any infringement on the Second Amendment erodes this freedom, including bans on certain types of weapons, magazine restrictions, and the requirement to have a concealed carry permit to exercise this right in the public square. Further infringements are demanded every day by the mainstream media and progressive activists who make proposals that would turn law abiding gun owners into criminals.
How far would James go on 2nd Amendment matters? He would repeal everything back to the National Firearms Act of 1934, including the Brady Act. What part of “shall not be infringed” does the government not understand, anyway? The citizen has the right to own and possess any gun or ammunition the government has a right to own. No more, and no less. (Ron would consider separately each measure to be repealed, but can’t think of provisions worth keeping.)
Clearly, our protections against unreasonable searches and seizures are under fire too. This erosion was accelerated with passage of the USA Patriot Act. This act expanded what are called expanded surveillance procedures, allowing the government to gather foreign intelligence on both non-citizens and citizens. It has led to warrantless gathering of metadata from our cell phones and computers, including our texts and emails, although that was supposedly ended in 2015.
Our government’s response? We keep the average citizen safe from terrorist attacks with the provisions in the act. But how much freedom should the same average citizen be willing to give up? We suggest that the USA Patriot Act goes too far, and should be repealed.
We encourage fighters like Senator Rand Paul to continue to bring this overreach out into the open in the hopes more people will listen and join the fight against the act. It was a feel good measure born in the confusion and anger our country experienced after we were attacked on September 11, 2001. Cooler heads now need to prevail, and it needs to be repealed.
Where does this leave us?
Freedom is a fragile thing, and taxation and regulation have greatly and increasingly eroded freedom for all of us. From the opening quote, Ayn Rand saw the key issues two or three generations ago, and we all pay a price for our lost freedom.
Libertarians and limited government conservatives will continue to fight against additional erosion of our freedom, even if it may not be trendy to do so.
As Benjamin Franklin once said, “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”
Ron Knecht is Nevada Controller. James Smack is Deputy Controller.

“Shall Article 1 of the Nevada Constitution be amended to require the Legislature to provide by law for the establishment of an open, competitive retail electric energy market that prohibits the granting of monopolies and exclusive franchises for the generation of electricity?”
Who wouldn’t want an open, competitive retail electric energy market? Haven’t monopolies franchised by the government produced many problems? And isn’t market-type reform the answer?
Question 3, the text above, offers voters in November a chance to require legislators to pass such reforms by July 1, 2023. It also stipulates that every person, business, association of persons or businesses, state agency, political subdivision of the State, or any other entity in Nevada has the right to choose the provider of its electric service.
That freedom includes, but is not limited to, selecting providers from a competitive retail electric market or producing electricity themselves or in association with others. And people and entities would not be required to purchase energy from just one provider. Laws passed by the legislature to do these things could not limit a person or entity’s right to sell, trade, or otherwise dispose of electricity. Current law does not provide these measures.
Ron has worked toward these ends for about 43 years as a university research engineer; senior professional economist and financial, policy and technical analyst for three different regulatory agencies; and consultant and expert witness many times for many parties of all kinds around the country. This sounds like just what he has been promoting (but it isn’t).
In addition, a yes vote would require the legislation passed by our legislators to include provisions to reduce costs to customers and protect against service disconnections and unfair practices. Throughout his career, Ron provided analyses and testimony seeking to reduce costs and curtail unfair practices. Current law and practice are only mixed on these matters.
Proponents of this measure also assure us it will promote renewable and other new resource options and technologies for electric generation. Over that 43 years, Ron also provided many analyses and testimonies in support of new technologies, options and alternatives to conventional large power plants, including renewables. James, like Ron, a limited-government conservative and opponent of regulatory capture and public-sector cronyism, supports these various goals.
So, how can we say no to Question 3?
First, the proponents make some claims that aren’t true. For example, they claim regulated utilities are guaranteed a profit. Not true.
And the two sides argue about the effect regulatory reform would have on ratepayers as a group and on individual ratepayer classes (residential, commercial, industrial, etc.). Also on business and employment. As always, the devil is in the details of how reform is implemented.
This measure was passed by voters in 2016 and must pass again this year to amend Nevada’s constitution. Ironically, or maybe not, some arguments used by opponents in 2016 were even more ridiculous than the erroneous ones of the supporters.
Mostly, the opponents grossly misrepresented the record on regulatory reform and deregulation, claiming falsely that it messed up airlines and banking. They added a very one-sided account of the effect where reform and deregulation has been tried in other states. The record in the electric business has in fact been mixed. Again, the devil is in the details.
This year, opponents have been somewhat more circumspect in their arguments. But they have focused especially on the one detail that really should decide the matter in favor of no. That detail is that this question proposes a constitutional amendment, not statutes and regulations.
The genius of the U.S. Constitution and some American state constitutions is that they are short and cover mostly only the basics of governmental structure, powers and limitations. They also include basic protections for citizens, such as the Bill of Rights. This is a prime reason America has been so successful.
Constitutions get in trouble when they dabble in very particular and passing matters. To the extent government must do so, it should be done via legislation that can be easily remedied, not constitutional provisions that are nearly cast in stone.
So, let’s defeat Question 3 and then pressure legislators to do the job they should on this matter.

​Ron Knecht is Nevada Controller. James Smack is Deputy Controller

By Ron Knecht and James Smack – 9April2018
This fourth column on the Controller’s Annual Report (CAR) analyzes state taxes. Nevada collected $5.523 billion in taxes in fiscal year 2017, which was 41 percent of total state revenues. As discussed in our previous column, program revenues made up 56 percent, with miscellaneous items at three percent.

The largest tax sources were sales and use taxes ($1.285 billion or 23 percent of general revenues of $5.895 billion), gaming taxes ($897 million or 16 percent) and unemployment assessments ($825 million, or ten percent). All other taxes totaled $2.516 billion, or 43 percent).

There is no definitive right level of taxes relative to incomes and the economy. However, as discussed in the CAR, the overall level of state and local spending in the U.S. has long been well above public-interest levels, yet still rising. In Nevada, local-government taxes are the really big problem (due to high spending and pay), and state taxes a somewhat lesser problem.

Regarding trends, the CAR shows the following.

The burdens on consumption and on persons of state taxes declined in the last decade. Revenues from the following key taxes fell significantly relative to the growth in incomes: sales and use, gaming, property, motor and special fuels, and other minor items. The incidence of these declining tax revenues lies greatly with consumption, not with savings, investment and employment; and on persons, not businesses.
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To compensate for this decline, the state added new levies and increased taxes mainly on savings, investment and employment and on business. It did so via the modified business tax (MBT, which mainly taxes employment) and unemployment assessments; also, partly via the commerce tax, levies on auto leasing, lodging and insurance premium taxes. The large hike for unemployment assessments, was driven mostly by federal mandate.

So, the growth of total tax burden is trending down, but that trend masks a shift of burden from consumption to savings, investment and employment; and from persons to business.

Claims have been made that repealing the commerce tax, as we and others have proposed, would cause significant harm to K-12 education. Also, that people seeking repeal should state what spending they will cut if the tax is repealed. These claims are wholly false and misleading.

There’s no direct connection between commerce tax revenues and state K-12 spending. Commerce tax revenues flow into the general fund, not an education account.

Also, the Legislative Counsel Bureau has determined repealing the commerce tax, considering that it reduces MBT revenues, would cut revenues by $161 million in the first year and $97 million in the second year. These figures are one-fourth and one-seventh, respectively, of the annual growth in state revenues, which are growing faster than the Nevada economy.

Hence, eliminating the commerce tax would only require that state total spending grow at about the rate of the incomes of Nevada families and businesses. It would not require any cuts at all in current spending for education or otherwise.

The shift in tax burden from consumption to investment and employment and from persons to business diminishes tax neutrality. Neutrality is important because maximizing economic growth and fairness requires that taxes influence as little as possible the spending-versus-savings, investment and employment choices people and firms would make without them.

The choices people would make in markets without taxes would maximize economic growth and also maximize aggregate human wellbeing and fairness, the fundamental public policy goals. Since individuals overwhelmingly use their dollars for consumption versus savings and investment, and businesses spend much of their revenue on goods and services, taxes should fall mainly on consumption of goods and services, and less on savings, investment and employment.

The shift in tax burden from consumption to investment and employment and from persons to business also diminishes transparency. Transparency is fostered by taxing people, not business; as economists note, businesses don’t so much pay taxes in the sense of actually absorbing their economic burden as they collect them for the government from consumers via increased prices and from employees by lower employment and compensation.

With ten taxes accounting for four percent to 23 percent each of general revenues, and considering their incidence mainly on persons and consumption, Nevada’s tax base can be called reasonably well diversified.
Ron Knecht is Nevada Controller. James Smack is Deputy Controller.

By Ron Knecht and James Smack – 3April2018
This is our third column presenting the findings of the Nevada Controller’s Annual Report (CAR) for fiscal year 2017 (FY17). The first one gave an overview of the whole CAR and the second outlined how the state spent its money. This one details the revenue side: where it got the money.
Folks often assume that government revenues come mainly from taxes. In fact, less than half of Nevada’s revenues now come from state taxes. The majority of revenues are classified as program revenues, which include charges for services and grants and contributions received by the state. General revenues include mainly taxes and also smaller miscellaneous items.
Both program and general revenues are raised in connection with Nevada’s governmental activities and business-type activities (mainly unemployment insurance) and from three state entities that file separate accounting reports in addition to the state accounting reports covering primary government revenues and spending. These three entities are called discretely presented component units, and the Nevada System of Higher Education (NSHE) accounts for nearly their entire total.
Total state spending for FY17 was $13.363 billion, comprised of $7.469 billion (56 percent) in program revenues and $5.895 billion (44 percent) in general revenues.
Revenues from grants and contributions for Nevada governmental activities totaled $5.108 billion, or 39 percent of total state revenues and 68 percent of program revenues. 
Moreover, they grew much faster than other revenues from FY06 to FY17. This growth raised program revenues from 48 percent of total state revenues to 56 percent. Governmental grants and contributions increased more than $3.2 billion from FY06’s $1.875 billion to FY17’s $5.108 billion, accounting for 58 percent of growth in total state revenues.
Most grants and contributions revenues for governmental activities come from the federal government. Some of these funds are given for capital spending and more for operations. These revenues are mainly comprised of federal government funding for Medicaid, Supplemental Nutritional Assistance (SNAP, or food stamps) and Temporary Assistance for Needy Families (TANF). They are the revenue side of much of the increase in state Health and Social Services (HSS) spending discussed last week.
Most federal grants and contributions carry limitations on the use of the funds; that is, the money is not fungible. Thus, much of the spending of these revenues is driven by federal mandate and also funded by federal government taxpayers, including Nevadans. A notable risk is that federal funding is sometimes reduced, but federal mandates rarely are. Now and in coming years, Nevada faces potentially such a problem with Medicaid revenues and spending.
Charges for services, grants and contracts for higher education comprise nine percent of total state revenues, and they also grew rapidly. Program revenues totaled $1.207 billion for NSHE in FY17, an increase of $298 million, or 33 percent, over the last eleven years. During that time, these charges for services rose from $531 million to $672 million, or by 27 percent. Grants and contributions revenues rose from $378 million to $535 million, or by 42 percent.
These increases offset a decline in payments by the state of Nevada from $706 million to $568 million, or by 20 percent. Total higher education revenues grew from $1.473 billion to $1.923 billion, or by 31 percent. But the changes involved shifting some of the burden from taxpayers to students and their families, who get the direct benefit from higher education.
Other program revenues amount to 8.4 percent of total state revenues. FY17 revenues of $1.108 billion grew only $137 million or 14 percent since FY06, much less than the 34 percent nominal growth in Nevadans’ incomes.
In sum, increases in program revenues, driven mainly by HSS and to a lesser extent by higher education receipts grew rapidly while tax revenues grew moderately. In FY06, most state revenues came from taxes. But over the last eleven years, program revenues grew 99 percent, becoming 56 percent of total state revenues. General revenues, consisting mostly of taxes, grew only 44 percent and now account for only 44 percent of state total revenues.
Although past spending growth was supported mainly by increasing grants and contributions, the 2015 tax increases, plus uncertain federal support will place more burden of future spending growth on taxpaying families and businesses.
Ron Knecht is Nevada Controller. James Smack is Deputy Controller.

This is the second column based on the Controller’s Annual Report for fiscal year 2017 (FY17). Here we disclose where the state spends its money.
Total state spending for FY17 was $12.29 billion: $11.033 billion (90 percent) from regular state accounts, including pass-through federal funds; $1.211 billion (ten percent) from tuition, fees, contracts, grants and other service charges by higher education; and $46 million in two other areas. The total was 74 percent higher than in FY06, or 17 percent more in real per-person terms.
Health and social services (HSS) and all education accounted for 77 percent of the $12.29 billion. Their growth was 91 percent of the growth in state total spending from FY06 to FY17. In FY17, HSS consumed 45 percent ($5.5 billion), with primary and secondary education (K-12) taking 18 percent ($2.2 billion) and higher education another 14 percent ($1.8 billion). All other activities – law, justice and public safety, transportation, unemployment insurance, general government, regulation, etc. – totaled 23 percent ($2.8 billion).
HSS and K-12 spending grew rapidly while all other government spending, the Nevada economy and the wellbeing of Nevadans declined significantly. Over the last eleven years, HSS spending grew 150 percent, or 68 in real per-person terms. K-12 outlays rose 79 percent, or14 percent in real per person terms.
So, total real per-person state spending rose 17 percent despite significant decreases in higher education (-8 percent) and all other government spending (-19 percent). Real per-person income of Nevadans (-10 percent) and gross state product (-19 percent) also contracted.
As a consequence, the burden of total state spending on Nevada families and businesses, driven by HSS and K-12, was 30 percent higher relative to their incomes in FY17 than in FY06. The growth in burden from HSS spending was 87 percent. For K-12, it was 33 percent. Higher education saw only a two percent burden increase. The total of all other state spending grew eleven percent slower than incomes.
These burden figures mean that, besides covering spending increases due to inflation and growth in HSS client and student headcounts, rising HSS and K-12 spending required families and business to pay taxes and fees 30 percent higher in FY17 than in FY06. Had we not had the contraction in other state spending, the increase in taxes and other burden would have been even bigger.
More than $3.55 billion (64.5 percent) of HSS monies was spent on Nevada Medicaid. This spending will likely continue to rise in coming years due to the state’s decision to expand Medicaid eligibility pursuant to the federal Affordable Care Act (Obamacare). However, federal contributions toward this spending decreased in 2017 and will continue to do so, requiring additional state dollars.
Nearly $1.5 billion (67 percent) of K-12 funds was paid from the Distributive School Account to county school districts to supplement their local revenues. By various measures, Nevada K-12 education continues to deliver poor results, despite rapid increases over the last decade in state K-12 spending.
Despite the well-known lack of statistically significant correlation between spending and student achievement, in 2015 the legislature and governor further increased K-12 budgets by hundreds of millions of dollars through FY17.
Total higher education spending rose 32 percent, but the state-funded portion fell 19 percent. Large increases in tuition and fees, grants and contracts, and self-supporting operations (meal plans, housing, ticket sales, etc.) shifted significant portions of the cost burden from taxpayers to students and their families, who get most of the benefit of the services.
Transportation spending rose from $508 million in FY06 to $802 million in FY12 before falling to $180 million in FY16 and then climbing back to $845 million in FY17. Much transportation spending is capital investment in large projects, so there is no trend in annual spending.
Unemployment insurance (UI) costs rose nearly ten-fold from $239 million in FY06 to $2.233 billion in FY12, before falling to $313 million in FY17. Their 31 percent growth rate in spending since FY06 is only a small part of the state spending growth total, and it was driven mainly by the Great Recession, poor recovery and federal UI policy. There is no meaningful time trend in UI spending.
Next time: Where the state gets its money.
Ron Knecht is Nevada Controller. James Smack is Deputy Controller.

By Ron Knecht and James Smack – 20March2018
We have just issued the Controller’s Annual Report (CAR) for fiscal year 2017 (FY17). Here we provide an overview of it. Future columns will discuss individual sections.
The CAR provides Nevada citizens, officials and others a summary of key facts, data, analysis and issues about the state’s fiscal condition and challenges. The Controller has a statutory charge to recommend plans for: support of public credit; promoting frugality and economy; better management of the state’s fiscal affairs; and better understanding of them.
In FY17 and over the long term, state spending has grown faster than Nevada’s economy, thus imposing an ever larger real burden on Nevada families and businesses, whose real incomes have fallen significantly over the last decade. Rapid increases in spending on Health and Social Services (HSS) and K-12 education are driving state spending growth. HSS and education (K-12 and higher) consumed 77 percent of total state spending of $12.3 billion in FY17, while all other state spending in total declined significantly in real terms since FY06.
Non-tax revenues – grants and contributions to the state, charges for services and contract revenues – have grown very rapidly (65 percent faster than Nevada’s economy) to comprise 56 percent of total state FY17 revenues of $13.4 billion. Total tax revenues grew only slightly faster than the state economy, and they provide the other 44 percent.
Gaming and property tax revenues fell sharply in real terms while tax revenues from non-gaming businesses (including unemployment assessments) rose greatly. The burden carried directly by consumers and residents (not including the pass-through effects of business taxes) grew only half as fast as their incomes.
Large revenues from federal HSS grants cannot be redirected to other areas. HSS spending is the largest category of state spending, and it has grown fastest, driven mainly by federal mandates. Medicaid is 64.6 percent of the HSS total, and that percentage has increased recently due to Nevada’s embrace provisions of the federal Affordable Care Act of 2010 (Obamacare). Nevada Medicaid spending will increase in coming years, and federal funding that has supported it is uncertain, and it delivers poor health care results.
State funding of K-12 education has increased at more than twice the rate of incomes of Nevada families and businesses over the long term. Research has continuously demonstrated little correlation between student achievement and spending. In the absence of K-12 policy reform, it is unsurprising that the quality of Nevada education has remained low despite major funding increases.
Substantial parts of the cost of higher education have been shifted from taxpayers to students and their families in Nevada, as elsewhere. Higher education compensation in Nevada and all states is very high. All levels of public education suffer administrative bloat and operating inefficiency.
Current compensation of state employees, except those in higher education, is overall at market levels, but higher for lower-level positions and lower for top-end jobs. Nevada local government compensation is among the highest in the nation and continues to require increases in taxes that are already very high.
Public Employee Retirement System (PERS) contributions required of state employees (not including those in higher education) and from taxpayers have risen in real terms. PERS coverage of many local government employees is almost completely paid by taxpayers and is rising to unsustainable levels. PERS relies on unreasonably high estimates of future investment returns and member growth to hide a growing under-funding problem that threatens financial peril for Nevada.
We identify four long-term trends that have suppressed U.S. economic growth in the last decade, thus explaining the “new normal” of slow economic growth. The main one is the continuing growth of government that is already too big relative to the economy, reflected in excess public spending, taxes, deficits, debt, regulation of all kinds, and other government interventions. The trends create an ever greater drag on our economy and produce slow real economic growth of two percent or less annually.
For a long time to come, Nevada needs to rein in the size, scope and reach of government to get it back within optimal levels. We also need to adopt policies that help reverse the long-term adverse economic trends and move Nevada away from cronyism toward true entrepreneurship and economic dynamism.
Ron Knecht is Nevada Controller. James Smack is Deputy Controller.

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By Ron Knecht and James Smack – 13March2018
The first part of our two-column series on President Calvin Coolidge reviewed his early career, culminating in his service as Massachusetts governor. Today, his time as vice president and 30th president.
In 1920, Coolidge was a favorite son candidate for president from Massachusetts. At that time, most states chose delegates to the Republican national convention at their state conventions.
At the 1920 Republican convention, ten ballots were required before the party nominee, Warren Harding, was chosen. Coolidge, although popular for breaking the 1919 Boston police strike, could not gain any traction at the convention to be seriously considered as more than a favorite son. He never finished higher than sixth on any of the ballots.
Harding had two choices ahead of Coolidge for his vice presidential nominee. But he left the decision up to the convention floor after his first choice declined, and Coolidge was easily nominated for vice president on the first ballot. Harding and Coolidge soundly defeated their Democrat opponents later that year.
Coolidge was the first vice president to be involved in Cabinet meetings. He continued to enhance his reputation as “Silent Cal”, a man of few words not only during Cabinet meetings, but in social settings as well.
Upon Harding’s death in 1923, Coolidge became president. The oath of office was administered by his father John Sr., a justice of the peace, at his family home in Vermont. He returned to Washington the next day to resume working.
Coolidge’s reputation had remained greatly untarnished during the scandals of the Harding administration, but his nomination for president in 1924 was anything but assured when he took office. Party leaders opined that he might be replaced on the ticket.
The turning point for Coolidge was probably his speech to Congress on December 6, 1923. He gave a strong speech supporting many of Harding’s policies, including immigration restrictions and the budget process that was begun during Harding’s term. He also benefited from this speech being the first one ever broadcast on radio, providing him with an audience that could hear him speak directly without the filter of the press. Coolidge was a solid orator and played well on the new communications medium.
After that speech, he won the Republican nomination on the first ballot. Former General Charles Dawes, the architect of the Dawes Plan to help financially stabilize Germany after World War I, was nominated as his vice president. The Coolidge/Dawes ticket easily won the 1924 election.
During the Coolidge administration, the country experienced booming economic growth. He disdained federal regulation, and did little to interfere with the economy.
He believed items that he championed as a state governor, such as wage and hour legislation and child labor laws, were best left to the states as the Tenth Amendment of the Constitution dictated. He worked with treasury secretary Andrew Mellon on reducing taxes and paying off debts accumulated during World War I.
Coolidge tended to not comment on controversial subjects. During the 1924 presidential race, his running mate and opponents highly criticized the Ku Klux Klan, which nearly hijacked the Democrat convention in an exercise known as the “Klanbake”. Coolidge remained silent on the issue. He did, however, make a strong statement on civil rights in his first State of the Union address, and supported making lynching a federal crime.
On foreign policy, he was the first and, until President Obama in 2016, the only president to ever visit Cuba. He did so to pacify Latin American leaders over U.S. policies of intervention in the region. Although American occupation of Haiti and Nicaragua continued during his presidency, he did withdraw from the Dominican Republic as part of this pacification.
During a vacation in the Black Hills of South Dakota, Coolidge issued a statement to the press saying simply, as only “Silent Cal” could, “I do not choose to run for President in 1928.” And he didn’t, retiring back to Northampton, Massachusetts and his new home on the Connecticut River after leaving the office.
Coolidge died suddenly in 1933. Poet and critic Dorothy Parker, upon learning of the death, quipped, “How could they tell?”
She obviously was more attuned to noise than profound impact. Silent Cal was the opposite.
Ron Knecht is Nevada Controller. James Smack is Deputy Controller.

​Given her very impressive silver screen acting career, there is no doubt but that Meryl Streep earned her “Lifetime Achievement Award.”  But her acting in Hollywood’s make-believe world, in which one can be shot dead, then get up and walk away, is irreversibly different from, say, Kate Steinle getting shot dead in San Francisco.
 
Meryl Streep would do well to learn the difference of her play-acting world from the real world and stop using the stage to “act out” her progressive aggression against America’s President-Elect Donald Trump.