Retirement, liquor tax bills sought

By Cy Ryan

Tuesday, Aug. 5, 2008 | 11:22 a.m.

CARSON CITY – An assemblyman wants to junk the 141,000-member Nevada retirement system for teachers and state and local government employees, and another lawmaker is looking at raising the tax on booze.

Assemblyman Ty Cobb, R-Reno, has asked for a bill to convert the public employees’ pension system into a 401k plan. “There’s a $4 billion to $6 billion unfunded liability,” in the retirement plan now, he says.

“And people in the private sector don’t get the exorbitant benefits,’’ that the government workers do in Nevada, he said.

But he will run into a buzz saw from state workers. “This would be a huge mistake,” says Dennis Mallory, representing the American Federation of State, County and Municipal Employees Association. He believes the system is embedded in the state Constitution and could not be changed by law.

Cobb’s measure is part of a batch of recent bill requests submitted for drafting for the 2009 Legislature. So far there are more than 200 requests.

Assemblyman Bernie Anderson, D-Sparks, is going to suggest the liquor tax be raised to help fund the operation of drug courts and to pay for DNA testing. He hasn’t set an amount so far but said the drug courts keep people out of prison, saving the state money.

And Assemblyman Mark Manendo, D-Las Vegas says he wants to prevent veteran cemeteries from adopting a desert landscape look. He belongs to Southern Nevada Veterans Memorial Committee that wants to make sure there is grass around the gravesites.

Cobb says Alaska just converted its state-operated retirement system to a 401k plan “with great success.” And this switch could make government more efficient, he said.

Dana Bilyeu, executive officer of the retirement system created in 1947, says it performs its goal of retaining public employees and school teachers. The board that oversees the system doesn’t want a change, she said.

Over the past 20 years, the system has earned an average 10.5 percent return on its investments. It has $22.5 billion and is 78 percent funded.

The $6 billion of unfunded liability will be paid off over a 27-year period. “There is no crisis in funding,” said Bilyeu. There are about 105,000 government workers and teachers who pay into the plan and 36,000 who receive benefits.

The average payout is about $25,000 a year and these government workers don’t qualify for Social Security, Bilyeu said. About $1 billion is paid out each year in benefits.

Mallory said Nevada’s system is “one of the most healthy plans” among the states. He said a plan to address the deficit is working. “PERS (Public Employees Retirement System) has done a remarkable job when you consider the plans of other states.” It has survived the economic woes of 9/11, the corporate scandals and the recent downturn, he said.

There will be “enormous opposition” to the proposed legislation by Cobb, says Mallory.

Anderson said the last session of the Legislature required DNA testing for all felons, but didn’t provide money for the two labs in Las Vegas and Reno. The liquor tax, he said hasn’t been raised since the mid 80s. And there’s a different tax rate on hard liquor, wines, beer and cordials.

He said he was concerned about the opposition of Gov. Jim Gibbons to any new or increased tax. But he said he was sure Gibbons would be open to discussion about the need for more money for these two programs.

“The tax dollars are stretched so thin, you can see through them,” said Anderson.

On the layout of veteran cemeteries, Manendo says other western states are moving to a desert motif that isn’t pleasant. It’s not comfortable to visit the gravesite of a loved one and lay down a blanket on a pile of rocks, he says.

If governments are worried about the lack of water, he said they can turn down the applications of “a couple of buildings” that are seeking water permits.

Cy Ryan may be reached at (775) 687 5032 or [email protected]