Statistics and Nevada's tax burden - Opinion

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Dec. 28, 2008
Copyright © Las Vegas Review-Journal

Statistics and Nevada's tax burden

By BOB BEERS
SPECIAL TO THE REVIEW-JOURNAL

UNR professor Elliot Parker, a teacher of economics, presented his case last week for more tax hikes, without which Nevada will not be able to hire more government employees and give them higher wages.

Parker cited statistics from the U.S. Census Bureau's "Statistical Abstract of the United States" and the Tax Foundation to convince readers that Nevada's people have been terribly chintzy when it comes to funding government, particularly as compared to other states. We have so underfunded government, he implies, that it would be a mistake to allow government taxing and spending to contract as Nevada's economy is contracting.

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In fact, the data from the authorities that Parker cites do not support his conclusions. Purposefully or not, he has chosen a narrow subset of larger bodies of data to lead readers to an incorrect conclusion.

For example, Parker cited the statistical abstract as finding "only 5.5 percent of Nevadans work for the state or local governments, the lowest share in the 50 states by far."

This is probably a true statement, although since the Statistical Abstract of the United States is very large, with more than 750 tables, Parker owes his readers a more detailed attribution.

However, the very same authority (the statistical abstract) also says our government employees are paid the fifth highest of all states (in table 448 column M) in 2006, the most recent year reported.

These average wage numbers -- in which Nevada ranks the sixth highest state -- do not reflect Nevada's exceptionally generous benefits package.

All of Nevada's government employees participate in perhaps the only "defined benefit" retirement plan found in the entire state, public or private sector. And while private sector workers help fund the cost of their retirements with paycheck contributions (that's what that 6.2 percent deduction for FICA is on your paycheck) the same is not true for local government and school employees in Clark and Washoe County. They have no paycheck deduction to help fund their retirement.

So, for a given wage, they take home a bigger paycheck -- not just compared to Nevada's private sector workers, but also compared to most of the government employees in the five states that outrank us on the Census Bureau's tally of average pay. (The rest of Nevada government employees, by the way, fund half of their own retirement plans out of their paychecks but it's approximately 10 percent rather than 6 percent).

If you factor in how government retirement works in, we'd likely rank higher than sixth.

Nevada's "structural deficit" lies in giving government unions too much power, which has resulted in our having the fewest government employees per thousand residents (dutifully reported by Parker) who are paid at or near the top of America's government pay scale (incredibly omitted by Parker). To report just one of these statistics without reporting the other is misleading.

Parker next rambles down the taxes-per-capita path without attributing his statistics: "Adding in spending by local governments, Nevada ranks 48th in government spending as a share of income."

Since the statistical abstract does not explicitly calculate this, he owes us a peek at the bar napkin he scratched his out on.

Bear with me while I show you mine: Statistical Abstract of the United States, Table 424, column B (Total revenue by state for 2005) divided by Table 12, column AK, (2005 population estimates, which appear to be slightly overstated for Nevada) equals tax revenue per person. Nevada ranks 29th, at $7,868 per person.

Since this clearly does not support the "chintzy Nevadans" refrain, and since Nevada's historically modest government has not surprisingly produced a society with a robust economy, low poverty and high incomes, Parker decided to express tax revenue as a percentage of our statistical average incomes. The Statistical Abstract's Table 684, column M comes close, with family median income by state for 2006 (not quite average income for 2005, but it's close).

And Nevada ranks 42nd, ahead of eight states. Not 48th.

Parker finishes up with the now almost-legendary deception that "The Tax Foundation reports that Nevada has the next-to-lowest tax burden in the nation, just slightly above Alaska. That ranking is roughly where we have been since the 1970s."

That's just one part of the Tax Foundation study released earlier this year. The foundation also found that our low level of taxation on residents is countered by one of the nation's highest levels of taxation on non-residents (or, in our local terminology, tourists). Overall, the Tax Foundation ranked us 25th for total state and local spending per capita.

Parker's subtle sins of omission are followed by a couple of statements that were simply false: "There are also many things the private sector cannot efficiently provide. Like national defense, affordable and available public education is one of these" and, "Unlike most other states, Nevada has no private universities, so this is an important responsibility."

Of course the private sector can efficiently provide education. In Las Vegas, for example, Faith Lutheran's middle school tuition was $7,260 in 2006 including capital costs and debt service; that same year, Nevada public school "per-pupil" funding was $7,345 not including capital costs and debt service.

And there are a growing number of private colleges in Nevada, including: Touro College, Sierra Nevada College, DeVry University, National University, ITT Technical Institute, University of Phoenix, Morrison University, University of Southern Nevada, with my apologies to the many more I don't have space to list.

Bob Beers, a former Republican state senator, served in the Legislature for 10 years. He writes from Las Vegas.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. Patrick wrote on January 02, 2009 01:20 PM: Beers didn't manipulate the statistics, you can go find every single one for yourself. All he did was show all the statistics Dr. Parker left out. gunowners4obama wrote on December 31, 2008 08:45 AM: Beers' M.O. is to manipulate statistics. If you listen to him speak, he'll always have a stat handy to support what he's saying. As someone here mentioned, there may be those who are snowed by this verbal sleight-of-hand. However, it's refreshing to see that there are R-J readers who have the critical thinking skills to see what this guy is doing. To those who think, Beers is so obvious that he's almost laughable. Some also pointed out that his stats themselves become laughable, because he picks out whatever numbers he thinks will trick people into thinking his way, no matter if they're obscure or irrelevant or ridiculous. I'd like to see the stats on how much Beers and his supporters spent on billboards before this last election. Kudos to Nevadans for seeing this selfish man for what he is, and voting him out. hss46 wrote on December 30, 2008 08:48 AM: Beers is so regularly off base this article is anything but a surprise. For example, not all state employees get a defined benefit plan. I know this because I'm a state employee and I don't have one. I don't get social security either. I am obligated to contribute 10.5% to a plan, have only 2 options on how its invested, can't borrow against and can't touch it until I retire even if i'm over 59.5. A second example is his comparison of Faith Lutheran's middle school tuition to the total expenditure by the state including highschool. Did you wonder why he used middle school tuition instead of Faith Lutheran's expenditures even though the camparison point is Nevada's total per pupil funding. Care to guess how much Faith Lutheran actually spends as its per pupil average so it would be 'apples to apples? And while Mr. Beers is technically correct in his reference to the schools listed as being "private colleges" none of those listed are campus based full spectrum schools where a high school graduate can attend, experience the benefits of college life and obtain a liberal arts bachelor's degree. Further, they are principally "for profit" institutions which are both very expensive and have virtually no campus funded financial aid (depending on their students ability to obtain loans under federal guaranties and subsidies). It is unimaginable that Mr. Beers might be suggesting that those schools should absorb the function of the Universitiy of Nevada and community colleges. What Mr. Beers doesn't address is the question of what kind of state do we want? One run by penny pinching libertarians who want to anchor us in the 19th Century or one that moves us forward. imtalkin2you wrote on December 28, 2008 06:02 PM: Notice how the only people crying for more government are the people feeding at the trough. andy d wrote on December 28, 2008 04:42 PM: helenn weils loves bob beers and hates his wife! lol! metro is right, ALL public employees pay part of their pension costs. beers is and always has been a liar. Retired Metro cop wrote on December 28, 2008 02:29 PM: Bob Beers writes: "They have no paycheck deduction to help fund their retirement." I don't understand how Bob Beers and his ilk can make a distorted statement like this. While I can't attest to other groups, all Metro employee groups are now and have been for years, foregoing a percentage of their salary increases to pay for increases in retirement contributions. Sure it doesn't go on the paycheck and then deducted from the paycheck, but it is the same result. In Nevada, there are liars and then there are elected liars......oh, I guess I left out columnists. John F wrote on December 28, 2008 12:14 PM: To WOW, Don't put down DeVry or University of Phoenix. They are both fully accredited. The quality of instruction at both schools is fine. Not only that, the students attending them are probably far more motivated than your average 18-year-old state university attendee. There's a great education available at both of those schools (and ITT Tech, which is also fully accredited) if you want one. I've worked with a number of graduates of all three (U of P, DeVry, and ITT) and they were all dedicated, serious individuals; you would have to be to spend the kind of money these places charge to earn a degree. Further, they all attended school while working full time. The US military willingly sends its members to both U of P and ITT (I don't know where they stand on DeVry), as does pretty much every employer in the city with a tuition reimbursement plan. They're decent schools. That being said, I agree with your assessment of Mr. Beers. John F wrote on December 28, 2008 12:01 PM: "If you factor in how government retirement works in, we'd likely rank higher than sixth." You make this unsupported statement and then later say that Mr. Parker "owes us a peek at the bar napkin he scratched his (formula) out on." How 'bout you do the same for us, Mr. Beers. WOW privy Univ.'s wrote on December 28, 2008 11:38 AM: DeVry, Pheonix constantly spam my email junk folder. Yep I would certainly want a degree form one of them. Beers is now the official state whiner it seems. So Bob did I miss the part about your recomendations for a budget fix? Brian wrote on December 28, 2008 10:32 AM: Boob Beers claims that none of our salaries goes to our pensions. This only shows what a total moron he is. I recall many years where we gave up a major part of our raise to go to our pension fund. So, until you learn to speak the truth, shut up, Boob. The people have spoken and they don't want to hear from you anymore. Read All Comments