Las Vegas Sun

July 28, 2014

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EDITORIAL:

Getting past the rhetoric

We need real leadership to diversify and lure top businesses

In this crucial election year for Nevada it’s troubling that the Republican candidates for governor seem to have taken a “see no evil, hear no evil, speak no evil” approach to diversifying our economy and improving our quality of life.

Incumbent Jim Gibbons and challengers Brian Sandoval and Mike Montandon are clinging to promises not to raise taxes despite overwhelming evidence that Nevada has failed to properly fund its schools, colleges and universities and basic social services.

This situation was highlighted last week when Bruce Katz, an authority from the Brookings Institution on urbanization and the economics of growth in major metropolitan areas, spoke about diversifying the economy during a forum with business leaders at UNLV.

Katz laid out a vision involving increasing exports, innovating and developing the alternative-energy industry. He specifically said more money is needed for research and development, in part toward the goal of creating energy and innovation hubs.

While this makes perfect sense, Nevada has failed to invest in such forward-thinking ideas.

This was confirmed during the forum by Jim Murren, chairman and chief executive of MGM Mirage. With his gaming company employing 53,000 people in Southern Nevada, Murren has plenty of reason to be concerned about the quality of life for those workers and their families and the education their children receive at our public schools.

Murren lamented the lack of investment by Nevada in education, health care and infrastructure and noted that even during the boom years Nevada was behind the curve in these crucial areas.

“2007 was a pretty damn good year, and we did nothing to address these issues,” Murren said. “Shame on us.”

Comments by the CEO of Clark County’s largest company critical of Nevada’s investment in schools and public services aren’t likely to appear in Nevada Development Authority advertisements aimed at convincing businesses to move to Las Vegas.

But the facts are out there and they’re plainly a deterrent to Nevada attracting companies that would help diversify our economy.

Think of yourself as a chief executive of a growing company interested in a good quality of life for your employees and a good education for their children. You want to be in a city where there’s a highly educated workforce. You’re looking for cities to expand to and wondering if Las Vegas is a good option.

Unfortunately, looking at educational opportunities alone, the answer is “no.”

U.S. Education Department figures show that even during the boom period of 2006-07, the Clark County School District’s budget amounted to spending of $7,791 per pupil. That was well off the average spending by large districts around the country of $9,323.

And a closer look at the numbers shows many of the nation’s largest and most respected companies are based in areas where investments in education are more substantial than the national average.

In the Los Angeles area, the spending averaged $10,430 per student. Yet big companies based there like Walt Disney, Northrop Grumman and Mattel aren’t clamoring to escape to Las Vegas just because we have low taxes.

The situation is the same in Seattle (think Microsoft), where the spending totaled $10,065.

Even in states with a high cost of living, respected companies are flourishing while contributing with tax dollars to substantial investments in education.

In New York, headquarters of companies such as IBM and Citigroup, New York City public schools spent $17,108 per student.

In Newark, N.J., headquarters of Prudential Financial, the spending amounted to $24,228 per student.

In Connecticut (headquarters for General Electric, United Technologies and Aetna), spending in the Hartford and New Haven areas on public schools averaged $17,211 and $15,978, respectively.

In looking ahead, Nevada policymakers should ask what it would take to diversify our economy by making our communities attractive to Fortune 500 companies outside of the gaming and mining companies that are here.

One way is to show a sustained commitment to improving our schools by properly funding them. Crucial to that solution is a broader, fairer tax structure so that we’re not so reliant on the ups and downs of the tourism industry.

Instead, all we hear from the Republican candidates for governor is “no tax increases’’ and “no new taxes.’’

That’s the same tired rhetoric that contributed to our current predicament in which our over-reliance on gaming industry taxes has decimated funding for schools, colleges and universities and essential social services.

Business leaders and voters now have an opportunity to side with Murren and say “enough is enough.’’ We urge them to do so.

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