Budget Watch Nevada

With all the violent crimes taking place in certain areas of the valley, and with white-collar crimes such as fraud and identity theft running rampant, why do legislators, prosecutors, and courts continue to waste time on victimless “crimes?”

It was reported in Thursday’s R-J that some guy had been sentenced to jail for growing marijuana plants in his home to sell to patients who need the herb to ameliorate symptoms they suffer from a variety of harsh diseases such as M.S. and cancer. Smoking this innocuous, natural substance is proven far more safe than many prescription drugs that physicians are happy to prescribe willy-nilly.

Just reading the following passage from the article shows the silliness of laws that are nearly impossible to apply fairly and which harm peaceful, mostly-lawful citizens in cases where THERE IS NO VICTIM:

“Werner has said he grew the marijuana to sell to patients with medical marijuana licenses, in part to protest a state law which he said is too restrictive for disabled patients who have trouble safely obtaining the drug legally.

State law allows licensed marijuana patients to grow the plant or choose one person to cultivate it for them, but that caretaker cannot provide the drug for any other patients.”

So a small-time farmer is offering his small-time customers a product which they need and want and can’t find in the grocery store and don’t have the wherewithal to grow on their own. Sounds like a simple exchange between a willing buyer and a willing seller to me. Free market economics at its best. But of course your government can’t leave well enough alone, so they have to butt in.

Even if you don’t smoke marijuana (this author doesn’t either), you should appreciate the misallocation of precious and expensive public resources that go into investigating, proving, prosecuting, and punishing victimless crimes. Puff on that thought, inhale freedom into your liberty-deprived lungs, and start promoting smaller, more sensible government.

My weeklong trip to New Hampshire to investigate the Free State Project has been eye-opening and inspirational. Activists here are motivated, organized, and – best of all – effective.

In under 4 short years, a diversified band of liberty-loving citizens from New Hampshire and a couple hundred more who recently moved to the state have changed the political landscape for the better.

This group of “Free Staters” is a loose-knit bunch of anarchists, minarchists, libertarians, Ron Paul Republicans, small government Democrats, housewives, and students. Some of them look like hippies, some like recluses, some like runway models, and some like Wall Street bankers. Their motivations and their pet issues are personal and varied, but they come together on any issue that pits the state against individual rights (the right to life, liberty, property, and self determination are still sacrosanct here). The New Hampshire Liberty Alliance provides a virtual community of fellow activists that provides campaign training, lobbying education and training, recruiting, research, and volunteer resources for organizations and candidates who fall under the pro-liberty umbrella.

Compared to Nevada, this group is well organized and well manned. They typically have 30-50 activists show up for any meeting. There are 20 researchers that follow legislation each year and alert the membership if there is an anti-liberty bill in committee. Then they send people to speak out against the bill at the legislature and start a telephone campaign to committee members.

It’s the same for LP and gun owners meetings or homeschoolers meetings. With 400 state assemblymen and 26 senators, the legislators are very accessible and responsive to voters.

New Hampshire politics provides one of the best venues for grassroots democracy and representative government in the country. And their constitutionally weak governor and legislature keep it that way.

If we in the Silver State, with 50% higher population, could replicate the Granite State’s activist base, we would have a real counterweight to the heavy-handed special interest influence of the teachers unions, public employees unions, and the NV Resort Association lobbyists. Even though New Hampshire currently suffers under Democrat majorities in both houses and the governorship, they still are far more conservative and taxpayer-friendly than Nevada’s “Republican” caucus. We should be so lucky to have such Democrats in our capitol.

If you are tired of being on the losing end of all pro-liberty, smaller-government battles, there is an alternative: move to New Hampshire and join the winning team for “liberty in our lifetime.”

Imagine 300 pro-liberty activists in one place. Now imagine 10 or 20 or 30 times that. I know – sounds like Nirvana, like paradise, like a good start.

That’s what’s happening right now in New Hampshire. I am reporting live from Gunstock Campground, in the Lakes region of the Granite State, where the state motto is “Live Free or Die.” The Free State Project, whose motto is “Liberty in our lifetime,” is hosting its annual “PorcFest” gathering of “Porcupines” from around the country. There are over 300 attendees registered for the weekend, with about a third of that already here (Wednesday), touring the state, discussing job and housing opportunities and engaging in lengthy, informed discussions on state and national politics.

Standing around the campfire you’ll hear conversations about Ron Paul, Ayn Rand, Ludwig Von Mises, Jefferson, and Jason Sorens, and if you look around you notice more than just fireflies dancing among the tall pine trees; you’ll also see several of the Porcupines exercising and celebrating the Second Amendment by openly wearing firearms on their belts. We all feel very safe that no one is going to try to rob our group.

While Porcupines’ (the FSP’s mascot, the porcupine, was chosen because it is a gentle creature who just wants to be left alone, but you certainly don’t want to cross it) political banter bounces from the Iraq war to the war on drugs to right-to-carry to taxes to wearing helmets and seat belts, one common thread is a desire for smaller government and more personal freedom. But unlike many libertarian-type discussion groups, these people are doing something about it.

Over 400 “Free Staters” are already living in NH. One has been elected to the state legislature and one to a local town council. Countless others have run in political races or have helped in others’ campaigns. They’ve opened businesses and built homes. They have been welcomed by the governor and by the numerous pro-freedom groups that are active politically around the state.

While we in Nevada have pockets of libertarian-leaning, Ron Paul-type activists and pundits, including Chuck Muth, Eric Odom, the Libertarian Party of Nevada and Clark County, Liberty Watch - The Magazine, and others, just imagine how great it would be if we had 10 times that many actively involved in Silver State politics. That’s what the Free State Project intends to do in New Hampshire, a state of under 1.5 million in population. Check it out at www.FreeStateProject.org.

In case you missed Citizen Outreach’s letter to Governor Gibbons, it bears repeating.

Chuck Muth takes Jim Gibbons to task on his ATR pledge to not raise taxes on Nevadans. While some conservatives applaud the Guv for drawing a line in the sand and standing up to the big spenders in the legislature (no longer just the D’s; now pork spending is a bi-partisan sport), Chuck points out that Gibbons still went soft on allowing the voters in Washoe County to vote themselves a tax increase.

The best part of Muth’s letter, though, is a challenge to look at spending CUTS in the budget and to effect transparency in earmarks and other areas of state spending. Chuck recommends to the governor’s office:

“The establishment of a website detailing state government spending which, similar to an ongoing project at the federal level, will allow taxpayers in Nevada to “google” their government and what it’s spending their money on” and . . .

“The creation of a Nevada version of Ronald Reagan’s “Grace Commission” to identify significant spending cuts in the current budget.”

That speaks directly to what we do here at Budget Watch Nevada. In fact, if the governor were to heed Chuck’s request for such a “Grace Commission,” then your author should be the number one candidate for a seat at that table.

Will it happen? Who knows? Can you help make it happen? Absolutely. We are still a small state, and your opinion matters. Write the governor’s office and have your neighbor do the same . . . and let’s make a difference in the future of the Silver State.

As much as I want to support Governor Gibbons’ holding the line on taxes, he still is a Bush-like “conservative,” submitting and approving a spending plan that is the highest ever for Nevada, some 18% higher than that of only 2 years ago. The spending INCREASE is way higher than would be justified under a TASC-like enhancement of population growth plus inflation. The real problem here is that the Guv and the Ledge spend every last dollar that is projected to be collected through taxes. There is absolutely no fiscal restraint shown. They never even talk about cutting out wasteful programs . . . NEVER. This is a real problem that will take real leadership to address, and I don’t see it coming from Carson City any time soon.

A vote earlier this week in the NH legislature (Senate) to require seat belt use in automobiles died in committee. Hooray for New Hampshire! It’s nice to see a voice of reason from the state whose motto is “Live free or die.”

The Union Leader newspaper reported, “The bill, HB 802, passed the House last month by 13 votes. New Hampshire is the last state in the country without a mandatory seatbelt law, although restraints are required for children and teenagers.

Under the bill, a seatbelt law violation would be a primary offense, which allows a police officer to stop and ticket anyone for not wearing a seatbelt, or any driver who carried unbelted passengers.

The bill has pitted public safety advocates who argue seatbelts save lives against critics who deride it as an example of the ‘nanny state.’

Clegg said after the committee vote, ‘I don’t think we should ever fear punishment as a reason to do anything. Government shouldn’t be something everybody is afraid of. If seatbelts are a good idea, then we ought to educate people so they’ll use them.’”

Well said, gentlemen. If only we had such pro-liberty thinking in Carson City! Senator Dennis Nolan recently spent a lot of time and energy trying to pass a stupid bill making it a primary offense to not wear your seat belt in Nevada.

Is it a good idea to wear your safety belt? Probably. Do seat belts save lives? Probably. But if your tyrannical government made laws for everything that saves lives, then it would be illegal to drink alcohol, or eat deep-fried foods, or smoke cigarettes, or cross the street, or go hiking in the desert in summertime, or own a swimming pool, or … well, you get the picture. All sorts of behavior can lead to possible injury or death, but what business is that of the government?

What ever happened to personal responsibility? Let’s try that for a change.

They must be reading BudgetWatchNevada up in Carson City. Nevada’s preeminent e-pundit Chuck Muth reported today that “In introducing his executive budget last January, Gov. Gibbons asked for $2.1 million in “one-shot” funds from the budget surplus for the not-yet-open children’s museum in Reno. Lawmakers reached a deal on how to divvy up the pork yesterday, reports the Nevada Appeal today, and the Reno children’s museum will only be getting $1 million in taxpayer dollars, while another $1 million will now go to the children’s museum in Las Vegas.”
For three months my taxpayer advocacy website, www.BudgetWatchNevada.com, has listed pork expenditures and budgetary items in need of being cut. I’ve suggested starving the Department of Cultural Affairs, under which children’s museums would fall, for some time.
Now, if they would just start following more of the recommendations, we’d all be much, much better off.

This morning I participated on a conference call with Governor Gibbons and other conservative bloggers, discussing the budget, legislation, and taxes.

Organized and moderated by Citizen Outreach’s inimitable Chuck Muth, right-thinking scribes Eric Odom, Richard Disney, Sonny Minx and yours truly spent about 20 minutes with the Guv discussing the 11th hour negotiations going on in Carson City prior to the legislature’s June 4 “sine die.”

Noteworthy from the call:

1. Mainstream politicians are paying attention to the blogosphere. Governor Gibbons and his staff understand that legitimate bloggers like the aforementioned are increasingly important players in the realm of news, commentary, and popular opinion. Members of mainstream media also monitor political blogs in search of new angles and viewpoints that many reporters overlook. Particularly in light of Gibbons’ lagging popularity, he knows that positive reportage among his conservative base is crucial to his success. Conversely, alienating them would only add to the piling-on by the liberal media.
2. Gibbons mentioned more than once that he is leading and governing based on principle. How often do you hear that from a politician’s lips? Not very, so it’s refreshing. Of course, some liberals also lead from what they consider to be principle, even though it‘s the principle of collectivism. In Gibbons’ case, he said that he pledged to the citizens of Nevada that he would veto any attempts to raise taxes, and so far he has stuck to his guns. I applaud this.
3. The governor reiterated his intent to spend more money on transportation infrastructure in Nevada without raising existing tax sources. Instead, he wants to reallocate monies from other accounts or agencies that don’t need it as much. In particular, he wants to seize some of the booty that the LVCVA reaps every year from the Room Tax. Instead of the Authority spending $2 billion-plus over the next 10 years to advertise a city that everyone already knows about, why not use some of that cash to build roads, bridges, on-ramps, and other critical improvements to move people around more quickly and efficiently? He also wants to tap into the Entertainment Tax. Now, from where I stand as a true libertarian-conservative, I’d like to eliminate the Live Entertainment Tax altogether, and slowly roll back the Room Tax to about half of where it is now and starve the LVCVA (see my previous column on this below), but this is a decent start.

The only disappointing part of the call was that we did not hear anything from Gibbons about cutting any programs or reducing spending. He acknowledged that this biennium’s budget is still 15% greater than that of 2 years ago. That means that any reported “cuts” are really just reductions in the rate of increase in budgetary spending. As anyone who has visited BudgetWatchNevada.com knows, there are dozens of bureaucratic hogs in state government that deserve to be slaughtered. Perhaps we can encourage the governor’s staff to review these in the interim before the 2009 session, and make real reforms to the jacked-up, statist largesse we now have.

Real Property Transfer Tax Adds Big Bucks to the Cost of Your Next Home

Nevada Revised Statutes’ chapter 375 outlines one of the most insidious, perverse taxes of them all, the Real Property Transfer Tax (R.P.T.T.). The following example will walk us through the imposition of this multi-layered tax and how it affects the purchase or sale of your next home.

This new homes development process is very common, and affects nearly every new home purchased in Las Vegas. Since over the last 3 years a large percentage of new homes have been built in master-planned communities like Mountain’s Edge, Providence, Summerlin, and Aliante, you’ll quickly see one of the reasons the cost of housing has risen so fast and why cities and counties around the state are flush with windfall revenues.

This is a common path for development of new homes, from acquiring the raw land all the way through to purchase of a new house by Mr. and Mrs. Workerbee.
1. A developer of master-planned communities purchases raw land from the federal government (BLM) or from a long-time private property owner. (In the case of the BLM auction, not only does the developer pay a tax on the purchase, but there is a hidden tax in the form of regulations which demand that a percentage of that privately-purchased land be turned over to the city or county for so-called “public uses.” But we’re not including that cost in this exercise.)
2. The master developer sells large parcels to builders to build homes and apartments. Builders now subdivide the parcels into plats, or buildable lots, often enduring long approvals from the municipalities (another hidden tax).
3. Builder then builds the house (paying thousands in fees to the county, along with “water connection” fees of between $5,000 and $10,000 per unit – again, not a part of this analysis), before finally transferring ownership of the house and lot to the happy homeowners, Mr. and Mrs. Workerbee.

In the above illustration, R.P.T.T. is paid 3 times on the same property! Each time, government coffers benefit and the productive sector is penalized.

The current R.P.T.T. tax rate in Clark and Washoe counties is $2.55 per $500 in value, equal to $5.10 per $1,000 in value, or .51% of the transfer value.

Land costs vary wildly year to year, and area to area, but I will use some realistic, conservative, average values in order to calculate the tax on property transactions from original to final purchase.

1. Purchase of BLM land from the Feds for $300,000 per acre. Let’s use an example of 2,000 acres, of which the developer must deed over to the county/city for public use, easements, and rights of way. R.P.T.T. tax: $3,060,000.
2. Developer sells 1,600 acres to 10 builders, 160 acres each, for $400,000 per acre, which includes some improvements and infrastructure. R.P.T.T.: $3,264,000.

A builder will typically build 5-8 units per acre for single family detached housing, and 16-20 per acre for townhomes and condos. For the sake of this argument, let’s look at a pretty common house and lot in a subdivision with a density of 8 houses per acre (this is very conservative; many communities only get 5-6 units per acre, net). To this point, an individual property from raw land to buildable lot has cost $494 in R.P.T.T.

So far, the only people making any money on this development are the government and some contractors and bankers. The builder hasn’t made a dime. And, of course, local governments are raking in property taxes that were nil before the BLM auction purchase.

3. Finally, Mr. and Mrs. Workerbee close escrow on their new house, which costs $300,000 (again, a fairly conservative estimate). R.P.T.T.: $1,530.
4. Keep in mind that in 2004-05 between 10-20% of new homes were purchased by investors and then re-sold within 2 years, adding even one more level of R.P.T.T. burden, but we’re not including that in this analysis.

Bottom line: In this example, the total Real Property Transfer Tax alone in the cost of Mr. and Mrs. Workerbee’s new home is $2,024. And they now start paying property taxes of about $2,000 per year. And in the case of the master plans mentioned above, they must also pay a Special Improvement District (S.I.D. or L.I.D.) tax of about $800 per year for 15 years.

If we now multiply this by the 10 builders in our example, time 1,280 houses each, the total amount of money extracted by government from buyers of new homes in R.P.T.T. alone is $25,907,200. Since roughly 25,000 new homes are sold each year, the figure could be doubled to estimate the cost to consumers just to buy into the American dream in the Las Vegas metro area.

With huge run-ups in property values between 2003 and 2006, local governments, especially Clark County, enjoyed unprecedented and obscene windfall profits from property taxes and Real Property Transfer Taxes. Cries for more money by the state and municipalities in Southern Nevada are shameful and disgusting. Governments should have been lowering tax rates or rebating money to taxpayers during that boom.

By Mark Warden
The author is president of Budget Watch Nevada and has worked in the new homes development industry in Las Vegas for 10 years.

We like to give credit where credit is due, and last week a couple democrats in the legislature did the right thing.

The Nevada politics show on PBS, Capitol Issues, reported Saturday that Assemblyman Kelvin Atkinson used his position as chairman of the Transportation Committee to kill a bill sponsored by Senator Dennis Nolan that would have made not wearing your seatbelt while in the car a primary offense. Such a change in the law would give cops and troopers the “right” (in Orwellian double-speak) to pull you over simply for forgetting or choosing not to buckle up before driving the car that you paid for on roads that your taxes paid for.

I’d like to think that Atkinson snuffed the bill in committee because of its authoritarian, nanny-state, liberty-robbing essence, but he probably just thought that it would give cops cover to pull over more minorities. Whatever the reason, we’ll take it, and we’re proud of you, Assemblyman Atkinson.

Assemblywoman Kathy McClain, who is rarely lauded in conservative political channels, gets kudos from me for her amendment to cut funding for Nevada participation in the REAL ID act from $30 million down to $200,000. Wow! That’s the kind of budget cutting that Budget Watch Nevada can get behind. Lamentably, she said that it may come up again next session. She said that the bill’s ramifications and costs were an “imposition on the citizens of this state” and an “expensive project.” Now if she would only use that logic on EVERY BILL she voted on, we’d be in good shape.

Over the past few decades, liberal activists have successfully weaseled their way into all aspects of state government. Two major venues for their success are with state attorneys general (AGs) and in utility regulation, where the environmental, energy conservation and consumerist interests sometimes overlap. Over time, volunteer activist groups such as “Citizen Utility Boards” have sought funding and institutionalization as state agencies anywhere the bureaucracy would house them, and ambitious statist AGs, governors and state legislators have been complicit in their schemes. Once these erstwhile citizen groups get institutionalized within the bureaucracy, they tap public funding via utility ratepayers to pay for their activist crusades without having a shred of real public control over them or meaningful accountability.

While Democrats, our true statist and simple-minded party animals, have led the way in such excesses, some shallow unprincipled Republicans, grubbing for votes, headlines and acceptance by the equally shallow press and activist communities, have also gotten on the bandwagon. So it is in Nevada, where State Senator Randolph Townsend, R-Reno, became the proud father of the Bureau of Consumer Protection (BCP) housed within the state AG’s office. While the BCP has various activities, the one of interest here is its standing as a party in all Nevada Public Utilities Commission (PUC) proceedings.

The PUC is supposed to make decisions based on the public interests in any matter on which it rules, such as setting utility rates, approving new energy facilities, etc. It has a staff of various professionals who are charged to provide testimony and assistance to the PUC, illuminating what the public interest requires or allows in each matter. So, if taxpayers must also pay for the BCP to be a party, then we are either paying twice for a single service and getting contradictory or misleading information, or we are paying the political activists at BCP for advocacy not in the public interest and therefore contrary to it. As it turns out, it is mostly the latter, but in any event, the whole enterprise is a complete waste of tax dollars and is undermining the public interest.

What ultimately needs to be done is obvious: repeal the statute giving the BCP any role at the PUC. Without even waiting for the Legislature to take such action, the AG, Catherine Cortez-Masto, should fire the lawyers, administrators, other bureaucrats, and outside contractors, and cut other expenses related to BCP’s activism before the PUC. Quit wasting public resources in that area and mucking up utility regulation.

A rough estimate of the annual savings that might be achieved by doing so is $1,000,000. However, the benefits of ending this boondoggle would be much greater than simply ending a drain on taxpayer dollars, because BCP’s ideologues are not meaningfully accountable for their actions, but instead spend their time and taxpayers’ dollars pursuing their personal ideological agendas that are often contrary to the public interest. BCP’s analyses, testimony and recommendations are almost always incompetent, misleading or at least contrary to the public interest, to the point that the PUC has noted such problems in some of its decisions. There’s no reasonable consistency in its positions from one case to the next, and in fact BCP tends to pick one outside consultant or staff member to argue a viewpoint convenient in one proceeding and then switch to another person for the next case to argue a contradictory point. BCP makes no meaningful contributions over time, except to delay and mislead PUC proceedings and run up all other parties’ costs while getting paid by taxpayers to fleece them by furthering its statist agendas.

Jeff Wright, Reno activist and guest contributor to Budget Watch Nevada.