Working on work
How did ‘job creation’ fare in the legislature?
When the Nevada Legislature began this year, there were news stories about how job creation was the number one goal of its members.
Four months later, there is uncertainty about what was actually accomplished. And part of the problem was that state leaders could not even agree on how to define the term. Republicans believe that only the private sector can create jobs. Democrats say the private sector in hard times will not create jobs.
Assemblymember Richard “Skip” Daly’s reaction when asked how the 2011 Legislature did on job creation was to laugh.
“Not very well,” he said. “Ostensibly, one bill last night [the last night of the legislative session] they passed the toll roads bill, S.B. 506. They tried to paint it as a jobs bill. The other thing was A.B. 183. It was going to lower the debt reserve for school bonds so the excess could be used. Then the court ruling said they couldn’t raid those kinds of funds.”
Daly is an official of Laborers Union Local 169 and represents a Washoe district that stretches from Baring Boulevard in Sparks to Wells Avenue and Plumb Lane in Reno.
“Bills that may have died on job creation are going to get resurrected into another bill,” Nevada Taxpayers Association executive director Carole Vilardo predicted the Thursday before final adjournment, and she was exactly right. After watching those last minute maneuvers, she said, “I’d say they took some steps in the right direction.”
A.B. 183, a Democratic measure, would have allowed schools to use the freed-up portion of school bond reserves for renovation on schools. It wouldn’t have mattered if the court ruling had come out differently. The governor vetoed 183 before the court ruling came down. It wasn’t a fundamental difference of opinion between Republicans and Democrats on raiding the reserve—Republican Gov. Brian Sandoval also wanted the money, but he wanted to apply it to school district operating costs.
After the court ruling went against Sandoval’s use of local funds, the idea was revived, and the bond reserve was lowered, allowing an increase in school construction. This is probably the most substantive job creation proposal. Washoe school officials say it could create almost 800 jobs in the county.
In the dying minutes of the legislative session, the Assembly on a 29-13 vote gave final approval to the toll roads measure, S.B. 506, allowing the state highway department to join with commercial interests to build a toll road around Boulder City, a response to traffic congestion generated by the new bridge across Black Canyon near Hoover Dam. Most of the jobs created will be temporary, which is true of many of the proposals that passed.
A $2 room tax hike was approved to fund repairs to Washoe tourist facilities.
If few jobs resulted from the 2011 legislature, it wasn’t for lack of plans and proposals that were more ambitious than what the lawmakers finally approved.
In January, a builders-funded group called the Building Jobs Coalition proposed a plan it called “Creating 100,000 Nevada Jobs.” Its components called for $675 million in wages and salaries to be spent on infrastructure construction, generating $1.5 billion in economic activity. Another part of the plan foresaw $224 million in wages and salaries for repair and maintenance of existing infrastructure, generating $518 million in economic activity. It paid for these proposals by again raising the taxes adopted temporarily by the 2009 Legislature and by jiggering local government fees and the motor vehicle tax.
The next month legislative Democrats, in an initiative they called “Nevada Jobs First,” proposed legislation that would require that at least 50 percent of a workforce on a state project be Nevadans, that 25 percent of materials used on a project be purchased within the state, and that vehicles used on a project be registered in Nevada. Another measure created an infrastructure capital fund to finance bond issues for public works.
Gov. Sandoval, meanwhile, had “Silver State Works,” to put $10 million toward training veterans, those drawing jobless pay, public assistance recipients and former criminal offenders for jobs.
Sandoval took the position that jobs should be created by the private sector, not by government. A Sandoval spokesperson said in January that he supported “building and fostering a business environment which creates new jobs without adding to the tax burden or spending money Nevada doesn’t have.” The problem with that strategy is that the private sector becomes very cautious with its funds during hard times. In fact, economists believe that the business community is part of the problem in achieving recovery. Last month, economist Richard Koo wrote, “These countries [European nations and the United States] are running large budget deficits not because their politicians have been profligate. They are running large deficits because their economies were collapsing. And their economies were collapsing because the private sectors in these countries have been de-leveraging massively in order to repair their devastated balance sheets following the bursting of their housing bubbles.” De-leveraging is usually done by paying off internal debt instead of investing in economic growth.
John Madole of the Building Jobs Coalition said his group had hoped for more.
“I know they’re going to rehabilitate the bowling stadium, do a little work downtown, and perhaps 70 to 100 million in school construction,” he said.
The schools money is the most important, he believes. By lowering the bonding threshold, “It frees up money that could be used for construction and also for renovation, rehabilitation of aging buildings—repairing boilers, that kind of thing. There are even some health issues where things like sinks, bathrooms, are not up to code.”
On June 2, the U.S. Department of Energy provided a $45.6 million loan guarantee for a 20-megawatt photovoltaic farm in Clark County, to be built by Fotowatio Renewable Ventures (FRV), a rising renewables firm.
“Today’s announcement is yet another sign that Nevada is a major player in the growing solar industry,” said Energy Secretary Steven Chu. “Investments like this one, along with the many other clean energy projects underway in the state, will help us to create jobs while positioning the U.S. to lead in the global energy race.”
That single project may have provided more jobs than the entire 2011 Nevada legislative session did. It also demonstrated something that U.S. Sen. Harry Reid and other players have wanted to prove—that the state does not have to accept nuclear waste storage in order to get goodies from the feds.
“Thanks to public-private partnerships like the loan guarantee program, scores of clean energy companies such as Fotowatio are bringing projects to Nevada to put people back to work by turning our state’s abundant clean energy resources into jobs and economic growth,” Reid said.
On May 24, the Bureau of Labor Statistics reported some paradoxical statistics: “Nevada experienced the largest over-the-month unemployment rate decrease in April (-0.7 percentage point)” but “Nevada continued to register the highest unemployment rate among the states, 12.5 percent in April.”
On the basis of that report, a website called Career Builder called Nevada the worst place in the nation to look for a job.