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October 22, 2014

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To diversify, Nevada must better educate, community leaders conclude

STINGING REPORT

Nevada’s historically stingy funding of K-12 and higher education is the foundation of a report — “Nevada: 50th in the Nation for Education” — prepared by state leaders in fields such as banking, architecture and real estate. The report says Nevada will never rise above its dependence on boom and bust cycles tied to tourism and construction if its government leaders continue to depend on low taxes — instead of top-notch schools — as their ace in the hole for attracting businesses.
John Restrepo

John Restrepo

Somer Hollingsworth

Somer Hollingsworth

The people who champion low state taxes as a way to recruit businesses to Nevada are undermining the state’s future by not advocating what businesses really need for success: better schools.

That is the conclusion reached by 40 community leaders who examined the role of education in diversifying Nevada’s economy.

If low tax rates were the key to attracting businesses, Silicon Valley-style economic clusters would be sprouting in Nevada rather than in Northern California, Seattle, Boston or North Carolina’s Research Triangle, the group said.

“Touting ourselves as a low tax state as the only reason people want to come here has proved to be a failure,” said John Restrepo, principal of Restrepo Consulting Group and a member of the study group. “If low taxes were all we needed, and we have been touting that, we wouldn’t have a 15 percent unemployment rate.”

The group’s report, “Nevada: 50th in the Nation for Education,” emanated from a round-table discussion among representatives of banking, architecture, law enforcement, education, real estate and government.

They met in August under the sponsorship of UNLV’s Lied Institute for Real Estate Studies and have published their findings. Dominant among them: Nevada won’t diversify its economy and prevent another deep recession unless education is valued in the community and more money is invested in public schools and colleges.

People and businesses leave Nevada or never move here because the educational system fails to meet their needs. The region is particularly off-putting to innovative, cutting-edge employers who seek excellent schools, the report said.

“We can no longer shortchange the state’s public schools, colleges and universities because of a lack of financial, political, social and economic will,” the report said. “To do so is shortsighted and will simply find us falling further behind Arizona, California, New Mexico, Utah and other states in the push to lure the innovative entrepreneurs, investors and workers of the coming decades. To do so will relegate Nevadans to continued cycles of boom and bust that are heavily dependent upon the uncertain fortunes of the gaming, construction and government-employment sectors.”

Somer Hollingsworth, president and CEO of the Nevada Development Authority, a nonprofit organization that recruits companies to Southern Nevada, said he agrees more money has to be invested in education to lure “the finest companies” in the long term, but said companies are moving here that pay $30 to $50 an hour and are satisfied with the state’s schools.

“The problem is we have never sold this as a business climate or put any serious money marketing that. We have sold ourselves as a resort industry,” Hollingsworth said. Improved education might help the state’s future but does nothing to help today’s economy, he said.

The study’s participants, however, said the state can’t afford to wait any longer to address educational shortcomings that place Nevada at the bottom of various national rankings.

“Low graduation rates put us at a distinct disadvantage when it comes to the development of the next generation of qualified workforce employees,” the report said. “It also fosters a reputation of failed educational achievement that makes it difficult to persuade potential employers to move here.”

Among the report’s suggestions:

• The Nevada Legislature should reform how funding is distributed to reflect Southern Nevada’s greater contribution to the state budget, and discussions must be held on tax reform.

• The state should pursue the opening of a major medical school in Southern Nevada.

• Business leaders and local chambers of commerce must argue that an investment in education is the first step to the sort of diversification that will prevent the economy from returning to a deep recession.

The report said that although Southern Nevada has talked about economic diversification for years, it was “little more than talk” until the economic collapse under the Great Recession that has seen 15 percent unemployment rates, foreclosures ravaging communities and hundreds of thousands of people struggling to pay their bills and feed their children.

With better schools, Nevada would be in a better position to recruit companies in such fields as medical services, communications, accounting, green jobs, law and financial services.

“But other regions throughout the country are chasing the same employers, and many communities are well ahead of us when it comes to their overall investment in public K-12, colleges and universities,” the report said.

Nasser Daneshvary, the Lied Institute’s director, acknowledged that diversification has been talked about for 10 to 15 years and little has resulted. He said he hopes the report is taken seriously by business and political leaders.

Restrepo said economic diversification and other white papers have been ignored or shelved by politicians and not advanced by the business community, but there’s a sea change in attitudes taking place that more has to be done to weather the next recession.

Although the existing political climate of no new taxes in a state facing a $3 billion budget deficit poses a challenge today, the report sets the stage to deal with the issue when the economy improves, Restrepo said.

“It takes patience and a huge amount of investment,” Restrepo said. “If we don’t do that, we have to accept that we are going to ride the business cycle and be vulnerable to discretionary spending.”

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  1. Gov'ner Sandy is goin' to cut edjukashun to the BONE.
    Ain't no sense in pretending we're gonna git better.
    Diversify? Why, we're goin' to DIVESTIFY our skools!
    However, if you got $20,000 to send yer kid to private skool like Sandy, he'd like Nevader to subsidize that fer ya by handing y'all a nice check fer like, $6000 or so.
    Now, that's what I call maTRICKulatin'!!!

  2. Congratulations to these Geniuses for coming to the conclusion that the rest of the country knew for 40+ years. Please tell me Tax Dollars are not used to state the Obvious.
    Any road map on how they plan on getting there (In our lifetime) or is this just a make work program?

    Lowest Rated Educations System, Lowest Rated Hospital System, Lowest Quality of Life for Families. If none of these issues were ever addressed when there was plenty of money, how will these be addressed when there is little money?
    I think we all know the answer.

  3. California taxes never stopped the greatest technology and business development the world has seen in one place, and it's for one reason: Education. That's why California is a Blue state.

    California placed accessible, public education at the top of it's priorities and that's where the billionaires stay and place their Headquarters, not in Reno for a tax break.

    Paying 8% taxes on a job makes a lot more money than ZERO TAXES on NO JOBS.

    Red States: Mississippi, Louisiana, Alabama, Georgia, South Carolina, all Red States, big on Religion, down on Education. Among the thriving technologies there are Soul saving and the garbage collection business, which have interesting similarities.

    The real purpose behind destroying public education is to make certain America has an abundance of young people for Military use. The Infantryman doesn't need history, English, science to deploy. If they can't find a job - the Military is ready to give them one and then they can learn to pray at the same time. The Military IS STIMULUS SPENDING as Hitler demonstrated, and the Nazi troops were required to pray before going into battle..."Gott Mit Uns" was on their belt buckles. The Nazi soldiers were Christians.

    China today is taking on all the Education it can generate and in twenty years, will have mass rapid rail transit, airplane industries and financial power. The Reds on the other hand, (who complain about the other 'Reds') want to teach us how dinosaurs rode on Noah's Ark. Oh Whoopie snot.

  4. Shhh, all you experts need to just hush up now - you don't wanna take a chance on wakin' guvenah sandoval.

  5. Throwing money at the public school system is merely throwing good money after bad. If money were the answer, the Washington D.C. public shool system would be putting out Rhodes Scholars instead of being one of the worst in the nation even though it spends (wastes?) more per pupil than any other. The answer? Vouchers and competition. gmag39 writes about those who can afford to opt out of the public school system getting a better education and he is correct. So, why not give financial backing to parents of lesser means so as to be able to do the same for their kids? Let them shop for the best possible schools. Why saddle their kids with the burden of attending schools that no longer educate but indoctrinate? The system today is set up so poorer kids have less chance to succeed than the ones with richer parents. It's a travesty that the administrators and the unions get theirs while the students, for the most part, are shafted!

  6. Mo' money ain't necessarily the answer, but LESS MONEY is a complete disaster.
    Obviously, money isn't the whole equation, but it certainly is in there...
    There's over-funded, adequately funded, and under-funded.
    If you rank near the bottom in per-pupil spending, and the educational outcomes are near the bottom, what correlation may be drawn? Hmmmmm???

  7. "The people who champion low state taxes as a way to recruit businesses to Nevada are undermining the state's future by not advocating what businesses really need for success: better schools."

    These two (tax collection and student achievement) are unrelated. For one, Nevada ranks about middle of the pack in total tax collection per capita. And as everyone knows (who is thinking about the issue) schools are funded with both state and local taxes (so focusing on state taxes only is a waste of time).

    Also, there is already a consensus on education spending and that is more spending is unlikely to produce greater results. There is a reason for this: It is not how much you spend that matters, but how effectively you spend what you already have.

  8. Mr. Becker,

    The Tech sector is growing more rapidly in Texas than in California. In fact, in California Silicone Valley has bled as much as it has grown. Overall, California's income growth is flat while poverty growth is on the rise.

    California also spends about $2,000 more per pupil than Nevada and perform WORSE.

  9. In the name of full disclosure,
    Patrick_R_Gibbons works for NPRI, is paid to push a no taxes position, and is using only the statistical numbers that allow him to spin the issue.

  10. lvfacts101 wrote: "Throwing money at the public school system is merely throwing good money after bad . . . "

    lvfacts101 Hit the nail on the head . . . I am in full agreement with his entire comment.

  11. Of course, Texas, which has no income tax, has had more job growth in the last two years than pretty much the other 49 states combined. It is interesting that people can point to red states that do not do well but it can be just cherry picking your facts. And some of the people I know in the high tech business world have chosen to build in places like Austin, TX and Albuquerque, NM rather than Silicon Valley just because of the the cost issues there. They still get a lot of business there because of the people there. They have a talent pool, investors and existing tech companies, but over the last few years that is ceasing to be enough for a growing number of companies. Plus, you talk about basic tax policy and are not exploring the extent to which various levels of government in any location are providing incentives for companies to build there. I know that several large builds in the Research Triangle Park area of North Carolina are there because of large tax breaks given to the companies that built. So, it isn't just as simple as low taxes don't work but it is a combination of policies. We need to fix education in this state but anyone who says it is strictly a monetary issue is deluded at best. There seems to be plenty of evidence to show that throwing money at the problem doesn't fix schools. Hopefully the new governor will put together a team that will spend the time to find solutions to the problems that we have with education.

  12. More empty rhetoric that will not result in anyting being done. The whole public education system is rotten to the core. You can not tell me that a so called education system that graduates only 50% of its students, as in Nevada, is nothing but an abject failure. It's not only a Nevada problem either, the most recent highly regarded Program For International Assessment (PISA), which measures learning among 15 year olds in 65 countries, resulted in the US scoring 14th in reading, 17th in science and 25th in mathematics. Well below average. There needs to be a shake up and major changes implemented, a education Czar needs to be appointed in Nevada to go in and clean house. Throwing more money at the problem or bemoaning the lack of money or budgets being cut, etc. is not going to solve the problem. Two thirds of Americans are overweight or obese, with a body mass index (BMI) over 25. It's time we cut the fat personally and in our education programs.

  13. Sebring,

    That is a logically fallacious comment. Who I work for (or don't) doesn't matter. If it did, I could just conclude that half of the panel cited in this report works for government and so of course they'd want to tax everyone to pay for their jobs. That would be a logically fallacious conclusion, however.

    If I'm spinning the numbers, prove it. Show, don't tell! :P

  14. improve LV---some excellent ideas, now that's what I am talking about. I am in favor of getting back to basics----mathematics, english, biology, chemistry, physics, computer science, etc. etc. Stop advancing underacheiving students, if their self esteem has to take a hit, so be it, they will get over it. We are doing ill prepared students no favor by advancing them if they are not qualified to go to the next level. Back in the day, if you didn't meet the standard at a particular level, you were held back, simple as that. That decision was based on the assessment of your teacher and the school administration, i.e., principal. Too much emphasis on teaching to these stupid standardized tests. And, at the risk of stirring up the bees in one of my favorite fellow commenter's bonnet (he appears in rare form today, must be off his meds), open up the teaching profession to those without teacher certification if they can demonstrate they can teach.

  15. HST,

    Run a regression analysis on spending and student achievement. You'll find many that are not statistically significant and every single one will show extremely weak relationships if they even exist. With low-income students the results may actually be negative.

    I'm doing a few myself right now and I will have them posted later.

    As for taxing and spending, Nevada does in fact rank middle of the pack - from the left-of-center Brookings Institution http://www.taxpolicycenter.org/taxfacts/...

    Nevada ranks 24th in state and local tax collection per capita.

    Full disclosure, Brian Greenspun sits on the Brookings board....

  16. We all need to recognize that 'education' IS the answer to prosperity and higher standards of living...however, we also all need to recognize that the cost of 'education' ISN'T the critical driver...like many have, Mr. Wargo, either intentionally or unintentionally, confuses correlation with causation...the unfortunate consequence of this mistake is evident daily...

  17. Hi Folks,

    Getting close to the holidays with all the stressors, I mixed up my lesson today and assigned the kids in my various classes [Auto 1, Auto 3, Advanced Study in Auto]a paper responding to the Sun arr\ticle. Although I have not yet read all 120 papers I skimmed some to get a sense of what the customers were saying. That's right.....the customers. We give short shrift to student thinking on this issue except, in a few instances, the best and the brightest. Quite a few kids are bright enough to understand that their education is, at best, marginal. They know that they have boring and worse teachers in some cases, that subject matter is only remotely connected to the skills that they will need once past the schoolhouse door, they know that they are not being taught to think but to pass test after test after test.

    As one student noted, "Adults won't make a serious changes to education because the current system gives them something to argue about." Pretty accurate insight for a 16 year old average B/C student.