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The Green New Deal: Doubling Down on Past Mistakes

2/12/2019

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My first full-time job after college was assistant city engineer in Urbana, Illinois in 1972.  I worked on my liberal Democrat green interests: bikeways, undergrounding communications and power lines, better sewer systems, sidewalks, traffic, planning and zoning codes.
I learned a key lesson in those matters.  Its breadth and importance would become clearer as my career progressed.
One day the public works director, a crotchety old conservative Republican, said: “You want bikeways, underground lines, sidewalks and all those things?  Well, it really is easy and cheap.”
I was stunned.  Previously he’d always been the naysayer, citing costs, practicability, etc.
Then he said: “At the edge of town, find a green field and you can design and build in all the amenities you want fairly inexpensively.  But once you start laying out a subdivision and constructing things and then you decide to add those features, it gets difficult and expensive.  And when you try to retrofit an already built neighborhood for them, it becomes ridiculous.”
Immediately I understood the point, but not all the implications.  Those became clear only as I pursued my environmental and consumer interests in a greater professional context.
Upon completing my civil engineering masters project, I became expert in the full range of power generating economics, with particular focus on nuclear power.  As an expert witness, I had small partial credit in helping stop perhaps a dozen nuclear units around the country.
In my analyses, I highlighted the skyrocketing costs over time of building nukes, which were rising as much as 15 percent annually in real terms, a trend no one seemed able to explain.  I suggested the increases would continue and were due to “cost internalization” processes driven by new regulations.  As it turned out, that was true, but it missed two important aspects of the problem I would see only later.
In 1984, as principal economist at California’s Public Utilities Commission, I toured the Diablo Canyon nuclear plant, which had been delayed many years and was to come on line at a cost about 20 times the original estimate.  My first look inside the building housing the reactor was stunning.  Instead of elegantly and cleanly designed, it looked like a mess with structural beams in odd places and many other misplaced weird features.  Like something constructed in a nightmarish hallucinatory fit.
I learned this was due mainly to the retrofit problem explained to me years earlier.  Nuclear construction was licensed to safety and environmental standards prevailing when the license was issued.  However, as those standards changed – and they changed greatly and fast – the builders were required to retrofit projects being built to the new standards.  Thus, the visual nightmare.
The other problem also soon became clear.  Sound public policy for safety, environmental and all standards is to raise them only as high as the point at which the diminishing incremental social benefit they provide equals their cost, which rises with the regulatory requirements.  But nuclear standards weren’t set with reference to social cost and benefit.  Instead, they were set as high as technically feasible, regardless of cost.
So, nuke costs increased ridiculously as builders were required continuously to retrofit to wasteful standards, especially as retrofit caused schedule delays that led to further retrofit.  And utility ratepayers paid the cost.  Once I understood that, I reversed my opposition to nuclear power and began to support nuclear regulatory reform.  (I also became a limited-government Republican conservative.)
In sum, unsound public policy – unjustified standards and retrofit regardless of its costs – combined to damage the public interest by killing a no-carbon energy option and sticking people with ridiculous costs.
So now comes Congresswoman Alexandria Ocasio-Cortez and today’s liberal Democrat enviros with their Green New Deal.  They plan to remake the world to an unsound standard, zero carbon emissions – achieved by retrofitting or replacing all existing buildings, ending use of fossil fuels in transportation, outlawing steaks and destroying numerous industries.  Also, implementing many of their socialist dreams.
The folly of earlier greenies in killing the nuclear power option cost the country many billions of dollars.  The Green New Deal, if it could be achieved, would cost many trillions of dollars.  For uncertain but paltry benefits much below the costs.
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Trump Rises to the Occasion

2/5/2019

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Rising above the persistent political turmoil and smallness of Democrats and the mainstream media, President Donald Trump Tuesday delivered a memorable State of the Union speech.
Forget the incessant whining and complaining of CNN, et al. that followed.  Let’s focus on what he said.
He began by noting our “unlimited potential” as a country, and he told legislators he is ready to work with them to realize it: “We must govern not as two parties but as one nation.”  So, from the start, he focused on the most important thing, especially in view of the nastiness and pettiness of politics this decade: America’s potential.  And how to achieve it by working together.
Visionary and conciliatory.  The ideal way to start in these troubled times.
He began by noting two great anniversaries that remind us of our unlimited potential and what we have done in the past when we worked together.  First, he saluted three World War II veterans who participated in the 1944 D-Day landing in Europe to rescue the world from the fascist and socialist Axis powers.  That drew a huge, enthusiastic standing ovation.  Inspiring.
The second event was the 50th anniversary of the Apollo 11 landing on the moon.  He introduced lunar module pilot Buzz Aldrin and promised that this year Americans will be going back to space in American rockets.
Next, he directly appealed for compromise to promote the common good and break decades of political stalemate.  “Tonight, I ask you to choose to make America great.”
His main theme was a plain-spoken and clear list of specific issues and policies.  He noted that, despite the problems of the last decade, we have a strong economy on which to build.  Unemployment is at its lowest in 50 years, with record low figures for African, Asian and Hispanic Americans.  And five million Americans lifted off food stamps in recent years.  Later, he noted 58 percent of last year’s newly created jobs went to women.
He pointed to the growth-inducing tax cuts and regulatory reforms that are major achievements of his administration.  He noted we have become the world’s leading producers of oil and gas and a net exporter of oil for the first time in 65 years.
“The state of the union is strong. ... Our country is vibrant.”  That’s as true as we make it.
He asked senators to confirm 300 qualified needed nominees the Democrats have held in limbo.
He praised the ground-breaking criminal justice reform First Step Act the administration and congress passed by working together.  He recognized two good people who benefitted from it.
Then he turned to the many burdens of illegal immigration, saying providing safety and security to Americans from the minority of dangerous illegal aliens is a moral issue.  He recognized the heirs of the Jerry and Sherri David of Reno, recently murdered by an illegal alien.  He celebrated the legal immigrants who enrich our nation and strengthen our society and challenged congress to act on the issue in the next ten days.
Mr. Trump saluted the brave men and women of the Immigration and Customs Enforcement bureau and promised walls and see-through steel barriers will be built where they are needed.  What he rightly called a common-sense solution.
Although I have reservations about his tariff wars, he extended an olive branch to China in this regard and offered other constructive trade initiatives.
Promising efforts to lower the cost of health care and protect people with pre-existing conditions, he again reached out to the Democrats.
Recognizing the needs for real solutions in education, he promised school choice for American children.  He challenged us to build a culture that cherishes and protects innocent life.  He noted foreign affairs progress, especially in Venezuela.  And he promised, “America will never be a socialist country.”
In the end, he returned to the D-Day heroes, noting one of them later helped liberate the Dachau concentration camp, including a survivor seated next to him.  He denounced the vile poison of anti-Semitism and celebrated moving our Israel embassy to Jerusalem.
He closed by again inviting the Democrats to work in bi-partisan cooperation with Republicans and his administration so our most thrilling achievements are still ahead.  Just right.
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Gordon Lightfoot’s Canadian Railroad Trilogy

1/29/2019

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I'm tired of politics this week, so something cheerful and moving to brighten everyone's day.

Gordon Lightfoot’s Canadian Railroad Trilogy
By Ron Knecht – 29January2019
There was a time in this fair land when the railroad did not run
when the wild majestic mountains stood alone against the sun
Long before the white man and long before the wheel
when the green dark forest was too silent to be real
But time has no beginnings and hist’ry has no bounds
as to this verdant country they came from all around
They sailed upon her waterways and they walked the forests tall
built the mines, the mills and the factories for the good of us all
The lyrics above begin Lightfoot’s “Canadian Railroad Trilogy,” which Johnny Cash called “an extremely fine piece of songwriting.”
Bob Dylan named Gordon Lightfoot his favorite singer/songwriter.  I think I agree.  “Everytime I hear a song of his, it’s like I wish it would last forever,” he said.  “Lightfoot became a mentor for a long time.  I think he probably still is to this day.”
The Canadian Broadcasting company commissioned the song by the country’s special son for a special broadcast on January 1, 1967 to start Canada’s centennial year.  It took him three days to write, and it has a slow tempo middle section between faster paced beginning and end sections.
Lightfoot was an inspired and inspiring choice.  The song describes the building of the trans-Canada Canadian Pacific Railway in the early 1880s, a dozen years after Leland Stanford drove the golden spike to celebrate our first trans-continental railroad.  Its awesome lyrics and sound herald the optimism of the railroad age in the opening stanzas.
For they looked in the future and what did they see
They saw an iron road runnin’ from the sea to the sea
Bringin’ the goods to young growin’ land
all up through the seaports and into their hands
Look away said they across this mighty land
from the eastern shore to the western strand
Bring in the workers and bring up the rails
we gotta lay down tracks and tear up the trails
Open ‘er heart let the life blood flow
gotta get on our way ‘cause we’re movin’ too slow
His lyrics also tell the cost in blood, sweat and sorrow in the poignant slow middle section:
Behind the blue Rockies the sun is declinin’
The stars, they come stealin’ at the close of the day
Across the wide prairie our loved ones lie sleeping
beyond the dark oceans in a place far away
We are the navies who work upon the railway
Swingin’ our hammers in the bright blazin’ sun
Livin’ on stew and drinkin’ bad whiskey
bendin’ our backs ‘til the long day is done
A navvy, mainly a British term, was a laborer employed in the excavation and construction of a road, railroad or canal.  We can learn a few things from our northern neighbors.
In the final again upbeat section, he returns to the optimistic vision:
So over the mountains and over the plains
Into the muskeg and into the rain
up the St. Lawrence all the way to Gaspe
swingin’ our hammers and drawin’ our pay
Layin’ ‘em in and tyin’ ‘em down
away to the bunkhouse and into the town
a dollar a day and a place for my head
a drink to the livin’ a toast to the dead
Oh the song of the future has been sung
all the battles have been won
On the mountain tops we stand
all the world at our command
We have opened up the soil
with our teardrops and our toil
Again learning from the folks to the north: the muskeg is a North American swamp or bog consisting of a mixture of water and partly dead vegetation, frequently covered by a layer of sphagnum or other mosses.
The final verse unites both themes:
For there was a time in this fair land when the railroad did not run
…
When the green dark forest was too silent to be real
And many are the dead men too silent … to be real
Pierre Berton, who wrote “The National Dream” and “The Last Spike,” two bestselling books about the railway, said, “You know, Gord, you said as much in that song as I said in my book.”
I'm tired of politics this week, so something cheerful and moving to brighten everyone's day.

Gordon Lightfoot’s Canadian Railroad Trilogy
By Ron Knecht – 29January2019
There was a time in this fair land when the railroad did not run
when the wild majestic mountains stood alone against the sun
Long before the white man and long before the wheel
when the green dark forest was too silent to be real
But time has no beginnings and hist’ry has no bounds
as to this verdant country they came from all around
They sailed upon her waterways and they walked the forests tall
built the mines, the mills and the factories for the good of us all
The lyrics above begin Lightfoot’s “Canadian Railroad Trilogy,” which Johnny Cash called “an extremely fine piece of songwriting.”
Bob Dylan named Gordon Lightfoot his favorite singer/songwriter.  I think I agree.  “Everytime I hear a song of his, it’s like I wish it would last forever,” he said.  “Lightfoot became a mentor for a long time.  I think he probably still is to this day.”
The Canadian Broadcasting company commissioned the song by the country’s special son for a special broadcast on January 1, 1967 to start Canada’s centennial year.  It took him three days to write, and it has a slow tempo middle section between faster paced beginning and end sections.
Lightfoot was an inspired and inspiring choice.  The song describes the building of the trans-Canada Canadian Pacific Railway in the early 1880s, a dozen years after Leland Stanford drove the golden spike to celebrate our first trans-continental railroad.  Its awesome lyrics and sound herald the optimism of the railroad age in the opening stanzas.
For they looked in the future and what did they see
They saw an iron road runnin’ from the sea to the sea
Bringin’ the goods to young growin’ land
all up through the seaports and into their hands
Look away said they across this mighty land
from the eastern shore to the western strand
Bring in the workers and bring up the rails
we gotta lay down tracks and tear up the trails
Open ‘er heart let the life blood flow
gotta get on our way ‘cause we’re movin’ too slow
His lyrics also tell the cost in blood, sweat and sorrow in the poignant slow middle section:
Behind the blue Rockies the sun is declinin’
The stars, they come stealin’ at the close of the day
Across the wide prairie our loved ones lie sleeping
beyond the dark oceans in a place far away
We are the navies who work upon the railway
Swingin’ our hammers in the bright blazin’ sun
Livin’ on stew and drinkin’ bad whiskey
bendin’ our backs ‘til the long day is done
A navvy, mainly a British term, was a laborer employed in the excavation and construction of a road, railroad or canal.  We can learn a few things from our northern neighbors.
In the final again upbeat section, he returns to the optimistic vision:
So over the mountains and over the plains
Into the muskeg and into the rain
up the St. Lawrence all the way to Gaspe
swingin’ our hammers and drawin’ our pay
Layin’ ‘em in and tyin’ ‘em down
away to the bunkhouse and into the town
a dollar a day and a place for my head
a drink to the livin’ a toast to the dead
Oh the song of the future has been sung
all the battles have been won
On the mountain tops we stand
all the world at our command
We have opened up the soil
with our teardrops and our toil
Again learning from the folks to the north: the muskeg is a North American swamp or bog consisting of a mixture of water and partly dead vegetation, frequently covered by a layer of sphagnum or other mosses.
The final verse unites both themes:
For there was a time in this fair land when the railroad did not run
…
When the green dark forest was too silent to be real
And many are the dead men too silent … to be real
Pierre Berton, who wrote “The National Dream” and “The Last Spike,” two bestselling books about the railway, said, “You know, Gord, you said as much in that song as I said in my book.”
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State Health Care Spending: The 900 Pound Gorilla

1/24/2019

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State Health Care Spending: The 900 Pound Gorilla

This is the third in a series of columns summarizing my Controller’s Annual Report (CAR) for fiscal year 2018 (FY18).
The first two columns showed that since FY06 state spending has grown faster than Nevada’s economy, thus imposing an ever-larger real burden on Nevada families and businesses, whose real incomes are lower now than in FY06.  Health and Social Services (HSS) spending has grown most rapidly by far, driven greatly by federal health care mandates and funding.
Nevada spent $5.844 billion on HSS in FY18, up 166 percent from $2.199 billion in FY06.  We get partial reimbursement for many HSS programs, including Medicaid and food stamps, from the federal government.  However, Medicaid and some other programs also require at least partially matching state commitments.
Medicaid is Nevada’s largest single expenditure, accounting for 64.5 percent of the HSS total.  Federal operating grants to support it are inversely proportional to the per capita income in each state.  For 2017, the reimbursement rate to Nevada was 65 percent, up from 54 percent in 2006.  A prolonged decline in Nevada incomes relative to other states during and after the Great Recession drove this increase.  So, any robust recovery in our incomes will cause Nevada taxpayer spending for Medicaid to rise rapidly.
Almost one-third of the rise in Medicaid spending is due to expansion of eligibility parameters.  Historically, states participating in it were required to cover only highly vulnerable populations, including the elderly, disabled and children living below the poverty level.  The federal Affordable Care Act of 2010 (Obamacare), however, encouraged states to expand eligibility to all individuals with incomes up to 138 percent of the federal poverty level, including single, childless, working-age adults with no disabilities.
Expanded publicly funded health care benefits has coincided with declines in rates of private insurance coverage and other private health care spending.  In 2008, 68.6 percent of Nevadans held private insurance coverage, falling to 61.5 percent by 2012 before rebounding to 64.5 percent in 2015.
One explanation is that ACA mandates led to closure of many private insurance plans and temporarily left policyholders without coverage until some purchased new, ACA-compliant plans.  But the concurrent enrollment growth in Medicaid and other public health plans suggests that greater availability of these plans has displaced many consumers who previously could afford private insurance.  In 2015, 33.5 percent of Nevadans were enrolled in some form of public health plan, up from just 20.6 percent in 2008.
There’s evidence that expanding Medicaid to additional populations does not improve health outcomes and only further endangers the most vulnerable populations.  Medical reviews reveal that outcomes are better for holders of private insurance policies than for beneficiaries of public health plans.  Mortality rates for surgical procedures are nearly three times higher for Medicaid beneficiaries than for private insurance holders and even higher than for uninsured individuals.
Policymakers have historically squeezed provider reimbursement rates to control Medicaid costs, while expanding Medicaid eligibility rules.  One consequence is that many health care providers, including the most talented, refuse to accept Medicaid patients.  The result is growing demand for Medicaid services as eligibility rules have widened the and a diminishing supply of providers within the network has contracted.
The resulting supply shortage has fueled widespread reports of Nevadans who nominally have coverage through Medicaid but can’t get care.  Thus, the increased competition for care wrought by eligibility expansion harms the most vulnerable populations who were previously eligible and who now face reduced access to care.
Whether public or private, most health care plans today are more accurately described as third-party-payer plans than insurance.  Insurance is a voluntary pooling of risks by participants to hedge against unforeseeable events; but public and private health care plans offer payment for routine and foreseeable treatment, as distinguished from risk outcomes.
These arrangements encourage individual participants to seek superfluous care because the cost of additional care is socialized among the group.  This perverse incentive, called “moral hazard” by economists, leads to rapidly escalating premiums for private plans and very swiftly increasing demands on tax revenues to finance public plans.
History shows a near-perfect inverse relationship between the percentage of care financed by Americans’ out-of-pocket spending and the nationwide cost of health care per capita.

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Key Facts on Nevada State Taxes and Other Revenues

1/15/2019

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This is the second in a series of columns summarizing my Controller’s Annual Report (CAR) for fiscal year 2018 (FY18).  Based on the state’s official books and records, the CAR provides Nevada citizens, officials and others summaries of key facts, data, analysis and issues addressing Nevada’s fiscal condition and policy challenges.

Last week’s column reviewed state spending, concluding: Since FY06, state spending has grown faster than Nevada’s economy, thus imposing an ever-larger real burden on Nevada families and businesses, whose real incomes are lower than in FY06.  Health and Social Services (HSS) and K-12 spending have grown rapidly while total other spending, except that for transportation, declined.

So, how did our state fund its spending?

Non-tax revenues – grants and contributions to the state, charges for services and contract revenues – have grown very rapidly (59 percent faster than Nevada’s economy) to comprise 56 percent of total FY18 revenues of $13.63 billion.  General fund revenues, comprised mainly of tax proceeds, grew at the same rate as the state economy, and they provide the other 44 percent.

Government operating and capital grants and contributions of $5.296 billion accounted for 39 percent of total revenues and for 59 percent of the total revenue growth since FY06.  These revenues consist mainly of federal government spending for Medicaid, Supplemental Nutritional Assistance Program (SNAP, or food stamps) and Temporary Assistance for Needy Families (TANF).  They are the revenue support for much of the huge increase in HSS spending required mainly by federal government regulations.

A notable risk in this area is that federal funding is sometimes reduced, but federal spending mandates rarely are.  Now and in coming years, Nevada faces just such a problem with Medicaid revenues and spending.

In Nevada higher education, charges for services plus grants and contracts comprise $1.236 billion or nine percent of total state revenues, and they grew slightly slower than Nevadans’ incomes.  Other program revenues of $1.164 billion or 8.5 percent of total revenues grew much slower than incomes.

So, in FY06 most state revenues, 52 percent, came from taxes and the rest from program revenues.  But over the last dozen years program revenues grew 105 percent to $7.696 billion while general revenues rose only 46 percent to $5.934 billion.  It is doubtful that federal funding will allow Nevada program revenues to grow as rapidly in the future as in the past.  So, without restraint on state spending growth, Nevada families and businesses likely will face increasing taxes in coming years.

What are the facts and issues concerning taxes?

In sum, revenues from gaming, state property and state sales and use taxes fell sharply in real terms while tax revenues from non-gaming businesses, including unemployment assessments, rose greatly.  The burden carried by consumers and residents, not including the pass-through effects of business taxes, grew slower than their incomes.

The incidence of the declining tax revenues lies greatly with consumption, not with savings, investment and employment; and with persons, not businesses.

To compensate, Nevada added new levies mainly on savings, investment and employment, and on businesses.  It did so mainly the modified business tax (MBT), which taxes employment and federally mandated unemployment assessments; and also via the new Commerce Tax (CT) and levies on auto leasing, lodging and insurance premiums.

Some people claim repealing the CT would significantly harm K-12 education.  This is false and misleading.  There’s no direct connection between CT revenues, which flow into the general fund (not education accounts), and state K-12 spending.  Further, because CT revenues decrease MBT revenues, the net effect of deleting the CT would be to reduce the overall revenue growth rate less than the growth rate of the Nevada economy.  So, eliminating the Commerce Tax would still allow net total revenues to grow.

The shift in tax burden from consumption to investment and employment and from persons to businesses diminishes tax neutrality and transparency.  Businesses don’t much absorb the economic burden of their increased taxes; instead, they increase prices to consumers and lower total employee hours and compensation rates.
​

The good news is that, with ten taxes accounting for two percent to 24 percent of general revenues, and considering their incidence mainly on persons and consumption, Nevada’s tax base is reasonably well diversified.
​

Ron Knecht has served as Nevada Controller, a higher education regent, a legislator and economist.  He can be reached at RonKnecht@aol.com.  
​
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Key Facts on Nevada’s Spending Problems

1/7/2019

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This is the first of a series of columns summarizing my Controller’s Annual Report (CAR) for fiscal year 2018 (FY18).  Based on the state’s official books and records, the CAR provides Nevada citizens, officials and others a summary of key facts, data, analysis and issues addressing Nevada’s fiscal condition and policy challenges.
Here’s the bottom line: Over the last dozen years, state spending has grown faster than Nevada’s economy, thus imposing an ever larger real burden on Nevada families and businesses, whose real incomes declined over that time.
Rapid increases in spending on health and social services (HSS) and K-12 education are driving state spending growth.  HSS and education (K12 and higher) grew to comprise 79 percent of total state spending of $12.827 billion in FY18, while all other state spending in total declined significantly in real terms.
In FY18, HSS consumed $5.844 billion (46 percent of total state spending), with K-12 education taking $2.344 billion (18 percent) and higher education adding $1.911 billion (15 percent).  Their growth totaled $5.360 billion, or 93 percent of the growth of $5.761 billion in total state spending.
All other activities – law enforcement, justice, public safety, transportation, unemployment insurance, general government, regulation, resources, etc. – spent $2.729 billion, or 21 percent of the total. While this total increased 17 percent in nominal dollars, the real per-person spending fell by 25 percent.
With population growing 22 percent since 2006 and inflation of 28 percent, real per-person HSS spending grew 70 percent and real per-student state K-12 outlays rose 24 percent.  Real per person transportation spending increased seven percent and real higher education outlays fell six percent.  As a result, HSS and K-12 by themselves accounted for 82 percent, or the lion’s share of the increases.  Remaining spending on a wide range of government functions fell 34 percent in real per person terms.
In contrast to the 70 percent and 24 percent growth rates ion HSS and K-12, the real per person incomes of Nevada families and business (personal income) fell six percent and the Nevada economy (gross state product) dropped 15 percent.
Because state spending grew while incomes shrank, the burden on Nevadans skyrocketed 81 percent for HSS, 29 percent for K-12 and 24 percent for total state spending.  It was constant for higher education and it fell 20 percent for all remaining spending, including transportation.
This is quite contrary to the popular myths and narratives one hears from advocates and special interests related to HSS and K-12.  They moan endlessly about budget cuts, which means their wish list requests were prudently trimmed back by the budgeting process.  Or they trumpet ridiculous hyperbole, such as the claim a few years ago of a Reno Assemblyman that on his watch he witnessed the systematic destruction of K-12. At the time, K-12 spending had grown faster than even HSS.
Advocates and special interests spewing out such claims either have no idea of the facts or cynically don’t care and just blather such false narratives hoping to advance their cause at the expense of the public interest.  Next time you hear their claims, ask them to be specific and to document them.  They can’t.
Some other key facts on state spending I will address in critical detail in future columns include the following:
The single largest item in state spending is Medicaid, which sucked up $3.772 billion due to Nevada’s embrace of Obamacare provisions a few years ago.  That’s 64.5 percent of total HSS outlays.
The second largest item is state contributions to county school districts via the Distributive School Account, which reached $1.618 billion in FY18.  That’s 69 percent of state K-12 funds.
Large increases in higher education tuition, fees, grants, contracts and “self-supporting” operations (meal plans, housing, ticket sales, etc.) offset decreases in spending from the state general fund.
There are no meaningful trends in transportation spending, which is mainly episodic capital investment.  Nor in unemployment insurance, which is driven by economic trends and federal policy.
The tax-and-spend folks claim Nevada has a revenue problem, because they want to increase taxes to continue aggressively raising spending.  They are fundamentally wrong: Revenues and sound public policy should govern (limit) spending; spending should not drive up revenues.
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Christmas Greetings

12/18/2018

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As we approach the holiday season and Christmas draws nigh, let us share with you some Christmas memories.

Both Ron and James grew up in the same area of the country, albeit at different times.  Ron grew up in the 1950s and 1960s in a small town in Illinois across the Mississippi River from St. Louis. James grew up during the 1970s in a suburban area of the city on the Missouri side of the river.  James’s mother even attended the high school that was the arch-rival to Ron’s in his sports, cross-country and track.
James recalls Christmas trees from floor to ceiling in the vaulted-ceiling living room, and lights being strung by his father all over the 1930s English Tudor-style home where he grew up.  It was a time of family and friends, the “two Christmas dinners” with a Christmas Eve meal at his paternal grandmother’s home, and Christmas dinner at the home of his maternal grandparents.  All including aunts, uncles, cousins, and even great grandparents.

Of course, all this came after Santa left presents for James and his sister on Christmas morning at their home.  And plenty of Christmas music was abound to help set the festive mood.

There was even a supernatural aspect to Christmas in James’s house once upon a time.  Although he doesn’t recall the entire event due to his young age, apparently he woke up everyone in the house sometime in the middle of one Christmas night screaming that he saw someone, a ghost perhaps, putting something down the laundry chute prior to vanishing into thin air. 

Talk about the “Christmas spirit”!

Although James’s family moved from the St. Louis area in the mid-70s, most years his parents, sister and he would return to the St. Louis area during the holiday season to celebrate with family and friends.  Some of his best memories are of the Christmas time period and the time spent with family.

It was always considered home when James was growing up, and both he and Ron still have family who reside in the area.

The Knecht family always gave the main gifts on Christmas Eve and the children’s stockings were filled when they awoke Christmas morning.

Ron recalls getting a double-holster gun belt, two cap pistols and a cowboy hat when he was seven.  His uncle was churlish enough to play quick draw with the kid and beat him every time.

About three years later, Ron and his brother Tom, a year younger, got matching red bicycles, which they later painted green.  Another year, Ron got a transistor radio the size of a cigarette pack, which he proudly stuffed into his shirt pocket.  For a lower middle class family at the time, the bicycles and radio were so expensive that the boys got no other significant presents.  But they were quite happy nonetheless and there was always lots of Christmas music and family.

As time goes on, Ron remembers most fondly what his sainted mother put in their large red stockings each year.  There was always a large juicy thick-rind orange and a succulent apple.  Plus, lots of nuts in the shell: almonds, pecans, filberts (hazelnuts), peanuts and walnuts.  Also, a candy cane and chocolates, especially chocolate-covered cherries.  Maybe a few other things.

Besides loving the chocolate-covered cherries, Ron was torn between the nuts and the large oranges as his favorite items.  He especially liked using the nutcracker to open the nut shells and get the fresh nut meats.
But in the 1975 movie Nashville, there was a scene that touched his soul.  Howard K. Smith plays himself, a TV commentator analyzing the candidacy of Replacement Party Presidential candidate Hal Phillip Walker.  Smith notes how the campaign started with Walker energizing a group of college students with some odd questions, including: “Does the smell of oranges remind you of Christmas morning?”

Now, when Ron opens a large orange with a thick rind and juicy segments, he is taken back to mid-century Christmas mornings in a small town in the Midwest.  He’s again a little boy with visions of so many things dancing in his head.  And the smell of those oranges does remind him of Christmas morning.
​

Happy Christmas!
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Our Analysis of Nevada’s 2018 General Election

12/6/2018

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We’ve seen analyses of what happened in Nevada’s 2018 general election and heard various claims and characterizations.  Under our leadership, the controller’s office has been known as nerd central because we rely on numbers, facts and quantitative analysis, instead of glittering generalities and snappy narratives.  So, let’s do that for the election results.
In 2014, the Republicans swept all six state executive offices and both houses of the legislature and many folks proclaimed the Big Red Wave.  As beneficiaries of that election, we even said that.  It’s important not to always believe your own press clippings, as we’ll show.
The most telling figures to explain the last two mid-term elections – that is, those between the presidential elections – are the turnout statistics.  According to figures on the secretary of state’s web site, in 2014 the total turnout was 552,326 voters of the 1,212,327 active registrants, or 45.56 percent.
That year the six Republican candidates for executive offices (governor, lieutenant governor, secretary of state, treasurer, controller and attorney general) averaged 299,334 votes, while the Democrats averaged 206,310.  Ron’s election was in the mainstream, as he got 282,674 votes to Andrew Martin’s 202,573.  (Controller races tend to collect the most under-votes of any executive office.)  Ron’s total vote was third and closest to the average for the Republicans.
Everyone acknowledged at the time that it was a low turnout and laid that off to a poor showing by the Democrats.  And invented the Big Red Wave.
This year the total turnout was 976,164 voters of 1,561,515 active registrants, or 62.51 percent.  The progressives, Democrats and RINOs (Republicans in name only), plus their amen corner in the mainstream media, immediately alleged a poor Republican showing and sought to blame President Trump – as they do these days about almost everything.
But sober analysis of the actual numbers showed it was a strong, not weak Republican effort because the average Republican vote for the six offices increased by 49 percent from 299,334 votes to 446,739.  Ron’s 445,099 vote total was fourth among the Republicans and closest to the average this time too.
In fact, all six Republican candidates got well more votes this year than any state executive candidate had ever gotten before – even Governor Brian Sandoval in each of his two races.  This was due to increases in active voter registration of 28.8 percent from 2014 to 2018.  However, Sandoval’s 2014 numbers were greatly inflated by the fact he ran against the weakest Democrat gubernatorial candidate in memory, a perennial octogenerian gadfly who even lost to None of These Candidates in his primary.
The problem for Republicans was that Democrats fully recovered from their catatonic showing of 2014 and ran up even bigger totals.  Their six candidates averaged 471,851 votes in 2018, beating the Republicans by 5.6 percent on average and in five of the six races.
But how do the numbers from the last two races compare to previous elections?  Is one or the other an outlier?
It’s difficult to compare the results over a great stretch of history because Nevada has long had the fastest growing population in percentage terms of all the states.  However, we can compare the two most recent mid-term elections to the two before them, in 2006 and 2010.
The 2010 active registration increased by 29.7 percent from that in 2006, while the increase to 2014 was only 8.3 percent before another huge jump to 28.8 percent this year.  The turnout in 2006 was 59.16 percent and in 2010 64.62 percent, compared to the 45.56 percent in 2014 and 62.51 percent this year.
Many folks attribute the 2010 increase in registration and its huge turnout to the fact Harry Reid was on the ballot for the last time.  In that context and comparing 2018 figures to those in 2006, this year’s registration and turnout seem to be in the mainstream of historic results.  Perhaps they show a slightly stronger than usual Democrat gain.  Also the outperformance of women candidates relative to party averages.
So, 2014 was the great outlier year and this year’s results seem generally representative of where Nevada is and has been.  A challenge to Republicans, but one they may be able to overcome next time.
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Time for Federal Prohibition of Cannabis to End

11/27/2018

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Time for Federal Prohibition of Cannabis to End
By Ron Knecht and James Smack – 27Nov.2018
Nevada Republicans suffered a significant setback in last month’s elections, despite good efforts, and we need to revisit some issues.  We won’t change our principles, but it’s time to square those principles with some changed facts on the ground.
Let’s start with marijuana.
Consistent with Republican “leave us alone” principles that oppose federal micromanagement of people’s lives, it’s time for the federal government to make cannabis legal and get out of the way of the states on such matters.
The President and Republicans in congress should lead the way.
The first action is simple: the federal government should reclassify cannabis.  It should not be a schedule one drug.  Let’s even go this far: completely decriminalize cannabis at the federal level.
With Republicans running point on the issue.
The war on drugs, especially against cannabis, has been a dismal failure.  Even before there was a recreational dispensary in nearly every major municipality in Nevada, it was not difficult to procure marijuana on the black market.  Total social costs of this ineffectual war have greatly exceeded its total social benefits.
One person said, “Even before recreational cannabis was legal, I could get an ounce of weed delivered to my home faster than I could get a pizza.”  Already part of the service economy.
The electorates in three conservative states, Missouri, Oklahoma and Utah, voted to approve legalized medical cannabis in this year’s election.  This leaves just six states that still consider cannabis to be illegal for any purpose: Idaho, South Dakota, Nebraska, Kansas, West Virginia and Indiana.
We’ll be surprised if several of those states do not at least pass medical cannabis initiatives by 2020.  Nationwide, the people have spoken.
Yet, federal law still classifies cannabis as a schedule one drug, with no medical uses. 
Why?  There’s huge money in big pharma, and if you follow the money, many folks waging this losing fight against the proliferation of medical and recreational cannabis have some association with big pharma.
There are substantially fewer deaths from using cannabis than using psychotropic drugs and opioid pain killers big pharma continues to tell us are safe.  Big pharma wants to deflect attention from the problems their products cause and avoid competition from cannabis, so they rail at it.
Republicans nationwide should urge the Trump Administration and Congress to roll back the schedule one designation on cannabis and fully decriminalize it at the federal level.  Let the states decide whether they want cannabis legalized for medical use only, recreational and medical use, or not legalized at all.
Also, Republican legislators should be developing bipartisan legislation, led by either the Republican minority in the house or our majority in the senate, to eliminate cannabis banking restrictions and bring this industry into the 21st century.  As controller and deputy controller, we’re acutely aware of the financial and security problems federal prohibition has caused individuals and businesses, plus the states that have recognized even just the medical value of marijuana and legalized that use.
It’s surprising we have not heard more stories of people being robbed going into cannabis establishments, which are all-cash businesses.  We are equally surprised there have not been more robbery attempts at the dispensaries, which are often flush with cash.
Touring a medical dispensary a couple of years ago, James was told by the proprietor that he must regularly take large amounts of cash to the bank.  To put it into a safe deposit box, of course, because it would be illegal to have a bank account and own a dispensary.  Leaving his shop, traveling to the bank and entering it, he is an obvious target for thieves.
So, the federal government needs promptly to do at least two things: eliminate the federal schedule one designation and fully decriminalize marijuana; and change banking regulations to let this industry and its people operate in a safe and financially secure manner.  This will also solve problems states face in regulating and taxing it.
It’s well past time for Republicans to square the federal cannabis issue with their principles, quit following the big pharma line, and let states make the decisions on cannabis based upon the will of their citizens.
Yes, follow the tenth amendment of the Constitution.
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Thankful to Be Controller and for Many Other Things

11/20/2018

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It’s time again for my favorite holiday, Thanksgiving.
Thanksgiving is a purely American celebration, not observed elsewhere.  A few other societies hold similar observances other times, but we alone will stop this Thursday, gather with our families and friends; savor the beauty, bounty and freedom; the hope, growth and opportunity we enjoy; and simply give thanks for it.  It’s rightly somewhat religious, but also an important expression simply of our joy in life and of our humility.
One thing I recommend to everyone is the Wall Street Journal’s annual pair of pre-Thanksgiving editorials, “The Desolate Wilderness” plus “And the Fair Land.”  The desolate wilderness quotes from the 1620 account of the Pilgrims leaving the old world and coming to the new one, “as recorded by Nathaniel Morton, keeper of the records of Plymouth Colony, based on the account of William Bradford, sometime governor thereof.”  ‘Twas a sad and mournful parting, and a grim and bleak prospect they found here.
The fair land is a magnificent poetic counterpoint penned by former WSJ editorial page editor Vermont Royster in 1961.  He begins, “Any one whose labors take him into the far reaches of the country, as ours lately have done, is bound to mark how the years have made the land grow fruitful.
“This is indeed a big country, a rich country, in a way no array of figures can measure and so in a way past belief of those who have not seen it. Even those who journey through its Northeastern complex, into the Southern lands, across the central plains and to its Western slopes can only glimpse a measure of the bounty of America.”
He ends, “We can remind ourselves that for all our social discord we yet remain the longest enduring society of free men governing themselves without benefit of kings or dictators.  Being so, we are the marvel and the mystery of the world, for that enduring liberty is no less a blessing than the abundance of the earth.”
“And we might remind ourselves also, that if those men setting out from Delftshaven had been daunted by the troubles they saw around them, then we could not this autumn be thankful for a fair land.”
For four years, these two pieces, framed, have adorned the entrance to my office.  The office I leave January 7, 2019.  I hope they have communicated to all who enter a profound sense of wonder, purpose and great joy.  For that is what I have felt about the opportunity to serve the people of Nevada as state controller.
On election night, I called my re-election opponent Catherine Byrne to congratulate her on running a clean campaign and on her victory, and to convey my best wishes to her.  I told her we would effect a smooth transition.
The controller’s staff has done a great job these four years, and I salute and thank them for it.  A curmudgeonly reporter often told me the only way we’d ever make news is if we messed up something.  We haven’t made any such news.  The team has done a fine job, and so we are leaving the office better than we found it, as is our duty.  It has been an honor to lead and work with them.
I particularly thank deputy controller James Smack and former assistant controller Geoffrey Lawrence for their great work and leadership.
In 13 political races I’ve run clean and substantive campaigns.  I’m proud of that.  Also of the job we’ve done taking care of the daily ministerial duties of the office and running it efficiently, cutting the budget, etc.  And especially for pioneering new frontiers in openness, transparency and accountability, all as promised.
If she wants them, I will bequeath the framed pieces to Catherine.
Serving as controller has been a great honor and joy for which I will be eternally thankful to the people of Nevada and which our family will celebrate this Thanksgiving.
Finally, I’ll celebrate, as always, the two greatest joys in my life, my wife Kathy and our daughter Karyn.  I am thankful too for Kathy’s mom, who recently departed for Heaven, and for all in our families.
And for you, my readers.  Happy Thanksgiving.
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    *Opinions expressed here may or may not reflect the views of the Lyon County Republican Central Committee. 

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    Ron Knecht has served as Nevada Controller, a higher education regent, legislator and economist. He can be reached at RonKnecht@aol.com.  
     

     

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