A matter of principle
The Pareto Principle helps keep me conservative, and the 2009 Nevada Legislature reinforced my convictions.
More on Italian Vilfredo Pareto’s 80-20 Principle later. First, let’s talk of conservatism and legislation. The Legislature that ended recently was moderately conservative. Observed were successes in thwarting liberal moves and progress in curbing government.
True, the sales tax on consumers and the modified business tax (MBT) both went up, helping raise $780 million over two years. Not small change, but neither is it beluga caviar. The $6.8 billion general fund budget wasn’t a pile-on from two years ago.
Still, anti-tax conservatives grouse, and some liberals crow. Despite them, a moderately conservative coalition in truth used old-fashioned horse trading to strike a deal.
The tax hikes are intended to “sunset”—or lapse in the absence of further legislative authorization—after the 2009-11 biennium. The 0.35 percent boost in sales tax is part of the flat tax that conservatives prefer to progressive taxation. The MBT declines for small businesses, a GOP position, though it hits larger firms up for more on payrolls exceeding $250,000.
Not bad defense, considering Republicans were in the minority, state revenues are plunging like last year’s stock market, and the GOP governor text-messaged himself into a corner of near irrelevancy.
Gov. Jim Gibbons did manage to brandish his veto pen and hand party colleagues in the legislature the whip hand for horse trading.
At least two GOP Senate votes were needed for overrides. Senate Minority Leader Bill Raggio, R-Reno, used that to get the sunset on tax hikes —and more.
That “more” is the stuff of behind-the-scenes conservative smiles. State employees’ pay got cut through furloughs while, more significantly, lawmakers reduced retirement and other benefits for Nevada public employees who start work beginning in 2010.
The benefits reform was the lynchpin legislation of the session. Raggio gets the credit—or blame, depending on perspective—from nearly everyone in the lobbying ranks, as well as other observers. But Raggio didn’t do it alone. Heavy lifters in his caucus included Sens. Randolph Townsend and Warren Hardy, who respectively represent districts in Washoe and Clark counties. Both have business backgrounds and helped sell the changes by, in effect, verbally waving “unfunded liability” and “Generous Motors” bankruptcy banners.
Key Democrats had to swallow and go along, dragging their rank and file majority membership with them, though some conservative Democrats undoubtedly were silently pleased.
Townsend didn’t call it a deal, but he smiled while agreeing with a suggestion that knowing what majority Democrats wanted most, and how much they wanted it, helped minority members get a good chunk of their agenda, as well.
One estimate from a tax savvy lobbyist put state savings in the out years from the revised public employees’ benefit package at $50 million and up each biennium. In addition, the sun is more likely to set on General Motors than on this new law.
As for the Pareto Principle, also called the “law of the vital few,” it is named for Vilfredo Pareto and suggests 80 percent of effects stem from 20 percent of the causes. It’s true for most input/outcome situations.
Pareto observed 20 percent of folks control about 80 percent of wealth. In business, 20 percent of salespersons bring in 80 percent of sales. You likely wear the favorite 20 percent of clothes in your closet 80 percent of the time.
In four decades watching government, I’ve seen the 20 percent who are actual leaders get 80 percent of the results. On balance, I’m thankful because moderate conservatives would lose more, and more often, if this principle weren’t the case.
Savvy minority leadership counts on occasion.