The Hayek Group

TAXPAYERS CLAIM MISMANAGMENT AND MISAPPROPRIATION OF FUNDS

June 28 2011 | tom | Medicare, Reno, Washoe County | Comment

Reno, NV. Residents and taxpayers of the Sierra Fire Protection District and Truckee Meadows Fire Protection District (together, the “Districts”) filed a complaint today with the Nevada Tax Commission and State Department of Taxation alleging mismanagement and misappropriation of funds for fire services provided by the Districts to the City of Reno. The Districts are located in unincorporated areas adjacent to the Reno city limits. Unlike property owners within the City of Reno, property owners in the Districts pay real estate taxes that are required to be spent exclusively on fire and emergency medical services benefitting the Districts’ residents.

The complaint estimates that $9.5 million of District taxes have benefited Reno in the form of ‘free’ fire services with no reciprocal services from the City. The complaint states this practice has been exacerbated by Reno’s historical and continuing annexation of District land without the City constructing, equipping and staffing any new fire stations. As a result, this forces the Districts to respond to the calls in those annexed areas due to “automatic aid” agreements, for which the Districts are almost never reimbursed. Further, Reno’s continuous closure of five of its own fire stations, all at the perimeter of the City, has caused excessive responses by District units to those areas of the City without any additional compensation to the Districts.

“When District units are busy responding to calls within the City, District residents are left without protection,” said Bob Parker, a resident of Sierra Fire Protection District and a signer of the complaint. ”It is only a matter of time before a District resident’s house burns down as a result of empty District stations. We are tired of paying for services for Reno residents. If Reno’s Mayor and City Council want to fund non-essential services rather than public safety, that’s their business; but don’t expect District residents to cover for the negligence of Reno officials,” Parker continued.

The residents seek an investigation and report by the State Department of Taxation to be followed by appropriate corrective action.

Apologies

June 17 2011 | tom | Nevada, Politics | Comment

I’ve learned that it’s dangerous to trust the Reno Gazette Journal when it reports televised candidates debates. The debate was not televised as the paper advertised and I apologize for posting the schedule published in the RGJ.

That said, I did listen to the debate while driving back from Carson City. All the candidates acquitted themselves well. Several of us were particularly impressed with Kirk Lippold’s comment on using Yucca for nuclear reprocessing and temporary only storage; he said that Nevada could become the nuclear center of excellence for energy research. This is the kind of thinking more politicians in Nevada need to adopt!

Comments welcome.

CD-2 Republican Debate Tonight 6 PM Channel 4

June 15 2011 | tom | Nevada, Politics | Comment

Mark Amodei, Greg Brower, and Kirk Lippold the top Republican contenders for Congressional District 2 representation will have a televised debate tonight 6 PM KRNV Channel 4. Watch it and let us know what you think with comments to this post.

Nevada’s 76th Legislative Session Sunsets

June 6 2011 | tom | Budget, Nevada, Politics | Comment

I was with several California friends this weekend who were amazed that our Legislature met only every two years and then only for 120 days! Contrary to Mark Twain’s bromide about “neither man nor beast (being) safe while the Nevada legislature is in session,” I think we should be proud of our system and its political success. Learn more here.

This 76th Session has been particularly difficult with dragging economy, budget short falls, and reapportionment as seemingly intractable issues. How did our representatives do? Pat Hickey has a wonderful summary which is re-published verbatim here:

A week in the life of the

76^th Legislative Session

Assemblyman Pat Hickey

Vol. 1, Issue 17 (June 6)

The “last day” and Where I Stand…

120 days ago, each legislator came to Carson full of hopes and dreams. I came here hoping to see critical changes to the state’s education system.

I believe Governor Sandoval and the 2011 Legislature have taken the first steps to set Nevada on the right reform path towards a better educational future. In addition, an adequate level of funding to compliment those reforms–was finally appropriated for K-12 and the Higher Ed System.

By now, everyone knows an event took place at the end of this session that virtually no one here in Carson expected. With time running out, Nevada’s Supreme Court weighed in on money the state had improperly appropriated–blowing a huge hole in the Governor’s budget that forever changed the outcome of the 76^th Session.

Before I comment on what the State Court’s decision meant to this budget and my vote, it is worth remembering the wisdom of America’s Founding Fathers. The checks & balances system and the separation of powers of the executive, judicial and legislative branches of government—are not always welcome, but they were enshrined in the U.S. Constitution for a reason. Obviously Governor Sandoval and Republican members of the Legislature were not only surprised but were disappointed with the High Court’s decision. Having said that, I trust the judgment of the man who has served as Nevada’s Attorney General as well as a Federal judge. On the day the decision came down, Governor Sandoval described it as “a punch to the gut.”

I understand the feeling. Still, it was a constitutional punch.

Approximately $656 million in the Governor’s budget was in jeopardy of causing possible litigation-producing taxpayer funded Special Sessions. Under those extraordinary circumstances, the Governor’s “rock and a hard place” decision to agree to an extension of existing taxes scheduled to “sunset” seems a wise decision. I personally believe it was the right decision.

Throughout the last 120 days, I worked to foster debate on critical reform issues. In creating a Freshmen Caucus, holding a Legislative Town Hall on budget issues, and sending out this weekly newsletter to legislators, lobbyists and constituents–I have attempted to forge discussion on the five reforms myself and my Republican colleagues thought were crucial public policy issues.

When all was said and done, we didn’t succeed in getting everything I wanted. One rarely does in politics. We did however, move the reform package down the playing field and will start next session with a first down on the 20 yard- line in the red zone.

What then, was accomplished this Session? Reform changes this legislative session to education policy, [passed] collective bargaining, [partial reforms] public employee retirement benefits, [a good start] prevailing wage reforms, [not accomplished] and construction defect legislation [blocked by trial attorneys] are important policy changes that will help Nevada by saving taxpayer dollars in the future.

For those among you who may look at Governor Sandoval’s and Republican lawmakers’ decision to extend existing taxes as a broken promise—I understand your disappointment, but I do not agree with that conclusion. While I respect those who may feel betrayed, I would hope they understand what the options truly were. For myself, I am a Nevadan before I am a Republican. I believe my vote on the Governor’s budget reflects that fact.

A fiscal “train wreck” likely triggering subsequent court cases and special legislative sessions at taxpayer’s expense would have caused greater instability to Nevada’s slowly recovering economy. As a small business owner, I too will have to continue paying a payroll tax that has been hard on my company. It was not an easy decision, but I am convinced it was the most responsible solution to pursue.

Governor Sandoval and Republican lawmakers stood firmly against seven new Democrat proposed tax measures that Nevada’s recession-weary economy could not absorb. We also managed to eliminate the payroll business tax on the 115,000 Nevada small businesses that earn under $250,000 annually.

I greatly appreciate the opportunity to have served in the 76^th Session of the Nevada Legislature. During the upcoming interim, I look forward to working with many of you on the issues important to each of us.

Thank you as well, for reading this weekly report when you had the time. I will continue sending you periodic newsletters in the next year I hope you will find useful.

Please stay in touch and have a nice summer. Now that the Legislature is almost over, God may smile upon us again and the sunshine should return.

Thank you for listening…

Thank you, Pat, for your service.

Complements of the Supreme Court…A BUDGET DEAL!

June 2 2011 | tom | Budget, Taxes | 5 Comments

This is the text of an email I just sent to the Nevada Legislators:

“CONGRATULATIONS, and Thank You Senate and Assembly Members All,

I’m working with a group to recruit new high-paying “intangible” businesses to Nevada. Your budget agreement with the Governor, is a MAJOR POSITIVE. In WA with Boeing I managed NV based assets to avoid WA’s B&O tax; and, here as a general partner with Montrose, I managed international intangible US bank assets to avoid state income, gross receipts and franchise taxes. NV must maintain this budgetary discipline to make our recruiting efforts credible. Thank you again and God bless you,

Tom Motherway, the Hayek Group”

On balance, the conservatives held firm but couldn’t stand in the way of a Supreme Court decision which has merit. In essence, the Court gave both sides a gift which allowed significant compromise. The two year limited extension of existing taxes taken with the collective bargaining and education changes not only gives the state a budget but saves stretched county budgets from further drastic cuts which endanger things like law enforcement. The Washoe County Sheriff is a case in point.

I invite comments pro and con alike.

Paul Ryan on Medicare

May 25 2011 | tom | Medicare | Comment

This should be distributed broadly. Please pass on.

Pawlenty Announces

May 23 2011 | tom | Politics | Comment

Kyle Meintzer alerted me to this gutsy hat’s in the ring announcement. “Whoa, baby!

“Tim Pawlenty first announced his candidacy on this video, then later today called for an end to ethanol subsidies. He did that in IOWA! Tomorrow he’s going to Florida and call for changes in Medicare and for raising the Social Security retirement age.”

The ethanol tack slaps Gingrich directly in the face, as Newt sucks money from our ethanol tax dollars!

Perhaps Americans are ready for the truth.

NEVADANS, CRUNCH TIME IS HERE

May 23 2011 | tom | Budget, Nevada, Taxes | Comment

The Democrats who never met a new tax or tax increase they didn’t like are at it again. Tax and spend, tax and spend, tax and spend. But they close their eyes to the results, abysmal results of their policies. Education continues to deteriorate but the administrators and teachers are happy because the system exists not for the children but for the teachers and administrators. The fire departments exist for the fire chiefs, captains and firemen not the residents who pay their taxes. Unions have taxen over the City of Reno and bankrupted it.

But it is those public employee unions who pull the Democrat strings. The unholy relationship between the Democrat representatives and the unions who elect them continues unabated. Unions fund campaigns and tell their members how to vote; Democrat politicians advance union pay and benefits.

We’re coming to the end of the 76th Legislative Session in Nevada with no budget in sight. There was a brief hope last week of sensible negotiations but it was dimmed quickly by the union bosses.

Here’s a sample from Pat Hickey’s newsletter: “The Democrats invited Assembly Republicans to a meeting to discuss the reforms that our caucus said would be a pre-condition to considering any revenue enhancements (taxes). The “D’s” produced a white paper outlining the five areas of reforms to be discussed–education, collective bargaining, prevailing wages on public works projects, construction defects and trial lawyer’s fees, and changes to PERS….

“Unfortunately, after that get-together the discussion lights appear to have gone dim. Since Republicans were merely the “invited” and not the “invitee,” I can only speculate as to the reason. I suspect the presence of 300 union employees the next day at the Legislature insisting that Democrats not give away any concessions on prevailing wage and collective bargaining rights may have played a role the pause in negotiations.

“An interesting twist in the mix occurred the next day when Senate Majority Leader Horsford and Speaker of the Assembly Oceguera sent out a “Dear Colleague” memo statewide to Democrats urging them to email certain Republicans like myself to agree to raise new taxes. The next day, a second email was sent out by the NSEA union president from Clark County using the school district email system urging teachers to send letters to us “open-to-dialogue’ Republicans as well. Memo to Democrats: you might want to send letters to Republican voters—they are the ones I am not hearing from regarding raising the new taxes your party is proposing.”

I urge each voter and taxpayer interested in the future of Nevada to write, call, or email each member of the Senate and Assembly and request, even demand that they support the Governor and forget any new taxes. Contact information is easily obtained by clicking the “government contacts” link on the home page of this site.

Reno: City’s Financial Black Hole Pulls Fire Protection From County Residents

April 18 2011 | tom | Uncategorized | Comment

Here’s a recent Reno Gazette Journal op-ed illustrating the adage, “you can’t fight city hall!”

As well illustrated in Susan Voyles March 31^st exposé of Reno’s financial mismanagement, the City is in deep trouble. Bond defaults negotiations on major bonds, illegal interdepartmental fund transfers, unfunded workers compensation requirements, and recalcitrant public employee unions all add up to a financial emergency, the equivalent of bankruptcy. One favored solution with EMS and fire protection has been to close or “brown-out” Reno fire stations and rely on county fire protection districts to pick up the work shortfall free of charge.

Now with respect to EMS and fire service, the difference between the county fire protection districts (Truckee Meadows and Sierra) on one hand and Reno on the other, is that the county districts are funded with specific ad valorem taxes and Reno is not, but relies on its general revenue to fund the fire service. For the last several years Reno has absorbed county fire tax money, which has put a strain on the two county districts finances.

Dealings with the Reno firefighters union have been particularly difficult because of the “two-in-two-out” staffing rule. Fire trucks need four man crews because if two firefighters go into a burning structure two must remain outside ostensibly to rescue the two who go inside. This tug and pull between union featherbedding work rules and crew safety has been at the heart of station staffing issues. As would be anticipated the union has control and Reno has pretty much been at its mercy.

To compound the problem Reno’s own fire service funding is inadequate, so it relies on Truckee Meadows and Sierra under a “mutual aid agreement” and “inter-local agreement.” This has the effect of taking a majority of the ad valorem fire tax money in the form of uncompensated services. The mutual aid agreement, in truth, lacks mutuality. It only works for Reno’s benefit. The inter-local is one-sided again only in Reno’s favor. To top it all off, Reno has shrewdly perfected the art of patchwork annexations cherry-picking the Sierra Fire Protection District ad valorem tax base. Yet, despite all this well disguised expropriation, Reno is essentially bankrupt.

So the questions for County residents and the County Commissions are: will we continue to get pulled ever deeper into the black hole of Reno’s finances? Are we going to continue to support Reno’s financial mismanagement? Should our taxpayers continue to cover Reno’s closures and brown outs while county residents suffer inadequate EMS and fire protection?

The equitable answers are obvious: The so-called “mutual aid” and “inter-local” agreements should be cancelled and replaced with a “fee for service” agreement with strict payment and enforcement provisions. And because of the specific funding for the county fire districts any “regionalization” with Reno will not work. Instead Truckee Meadows and Sierra fire districts should be consolidated as one entity with its own fire tax base.

Anything less not only wastes taxpayer money but more importantly puts lives and property at unjustified risk.

Tom Motherway, SFPD Resident

Thanks for innovative tax reforms — NOT!

April 9 2011 | renohayek | Uncategorized | Comment

This editorial from Ty Cobb:

We are halfway through the Legislative session and has anybody seen the alternative budget to what Gov. Sandoval has proposed? Nope. We are still being inundated by plaintive cries about how hard the various recipient agencies and systems are going to be hurt if the draft budget survives. This is all true, but much of the spending slashes could be offset by innovative new tax proposals.

The problem is we haven’t heard a single concrete idea from any of those crying from the rooftops about how bad this governor’s draconian budget is. Oh yes, we continue to be told that Nevada has a tax structure that is decades out of date, unbalanced, and which does not reflect contemporary economic activity. We are also told that this structure is a primary cause of our current fiscal crisis.

Yet can anyone point to a state that has a so-called “balanced tax structure”? I didn’t think so. Can anyone point to a state that is doing well financially, particularly because of its revenue system? Probably not.

Wait! I am being too harsh. There has been at least one actual tax proposal, that from Assemblywoman Peggy Pierce to — get this — double cigarette taxes. How bold! How innovative! We also hear that some legislators will fall back on extending the “sunsetting taxes” on sales and businesses. Well, both of these simply magnify the negative aspects of our current system.

When it became known that the state taxation office had not been tracking mining profits, a storm ensued and suggestions that mining needed to pay more were roundly heard. Understandable since gold accounts for 90 percent of the value of minerals produced in Nevada, the fourth largest gold producing entity in the world. Toronto-based Barrick and Denver’s Newmont account for more than 90 percent of that, and the two companies reported 2010 revenue of more than $20 billion and a combined net income of $6.4 billion! So where is the great new mining tax proposal? All I hear are suggestions to tweak the deductions mining takes.

Although the Senate majority leader has backed off it, some noise has been made about a corporate income tax. That might seem attractive since chains like Home Depot or Walmart pay no corporate taxes here but charge the same for items as they do in neighboring states. Certainly such a tax wouldn’t cause Home Depot to move. However, can we be certain that such a tax would not drive intangible companies such as Microsoft, Cisco, and Intuit to move their operations to tax-friendly sites such as the Cayman Islands, like Google has done?

There have been suggestions that the sales tax should extend to “services.” Well, that makes sense since services now account for something like 80 percent of U.S. business activities. However, we know that such a tax would be administratively complex, so would someone please tell me what this tax would look like? And soon?

Speaking for myself, I would not recommend any consideration of new taxes unless serious reforms are undertaken. The governor’s budget makes a few bold steps in that direction, but we really need to implement the recommendations of the SAGE commission, particularly regarding government compensation and employee bargaining tools. And yes, the state must negotiate with the federal government regarding the Yucca Nuclear Waste Repository, which is likely to be forced on us regardless.

There is no excuse for further dawdling on the revenue issues. The proponents of new taxes are well aware of what they intend to suggest, but inexplicitly will likely wait until the last minute of this session to unveil them. And that is too bad, because it will deprive the voting public of the debate that is badly needed regarding our fiscal crisis.

Tyrus W. Cobb

APRIL, 7 2011
Nevada Appeal Opinion

• Tyrus W. Cobb is a former Special Assistant to President Reagan

The Hayek Group

Consent of the Governed

Tenth Amendment

Principle of Subsidiarity

Proper Functions of Government

July 4, 1776

Ronald Reagan on Freedom