Las Vegas Sun

December 12, 2017

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Jon Ralston:

Hope and change and … what’s missing?

Somewhere between Gov. Sunny’s radiating optimism and the Nevada Policy Research Institute’s scathing indictment lies the reality of the state’s new economic development plan, which is replete with clichés and promises yet leavened with kernels of wisdom that could grow into something substantive.

Alas, the plan, released last week, is most noteworthy for what it does not contain — a plan to invest in higher and lower education — than for anything it does. This is an essential omission, which overshadows an essential admission from Gov. Brian Sandoval — remember this well — that the state’s tax base needs to be expanded.

“Our economic model has historically relied heavily on consumption-based industries,” the governor writes in the 57-page plan. “As a result, the recent Great Recession hit us harder than any other state.”

Exactly. As many had foretold for years.

But before Gov. Sunny is allowed entrance to our Cassandra Club, let me be clear: This is a document of unrelenting optimism, with more references to stakeholders (can we put a stake through that word, please?) than can be easily digested without mistaking it for a printed emetic.

(You can read it here.)

“Moving Nevada Forward” is a blueprint for diversifying the economy by creating Regional Development Authorities that would focus on the endemic characteristics of areas of the state, targeting seven industries and providing guidance and money to businesses that fit certain criteria. Or, as the conservative Nevada Policy Research Institute, deploying harsher rhetoric than it ever unloaded on any Democrat by labeling the governor a collectivist, called it: “a roadmap for crony capitalism and would lead to less productivity and less growth” and labeled the Republican governor a collectivist.

NPRI is worried the approach will result in the state picking winners and losers in specific industries, creating the possibility of favoritism and even corruption. I am more concerned that the state will choose only losers, set up to fail because Nevada has not invested in the intellectual infrastructure really needed to diversify the economy beyond the current sectors.

It may be fine to target tourism, clean energy, health care, mining, information technology, logistics and aerospace — expand the old and bring in the new. Makes some sense, NPRI’s concerns notwithstanding, although perhaps the list could be broader.

But if you set the bar low, you will continually hit your head on a ceiling that could be so easily elevated. You can’t have the discussion of diversifying the economy without talking about how to attract businesses and encourage enterprises to expand by having a world-class (or even regional class) university system and a lower education system that residents can be proud of and not try to avoid.

I fear that beyond the governor’s enviable and sincere optimism and the unquestionable competence and energy of his economic development point man, Steve Hill, that Nevada is once again not reaching for the stars but remains content to remain in our own, limiting atmosphere. It reminds me of lawmakers talking about someday getting to the national average — national average! — in education funding. Yes, let’s shoot for average here, too.

The answer is right there in the document, too, under an admirably acknowledged list of liabilities, which include: “Existing workforce skills not in alignment with job prospects,” an “underperforming educational system” and “State image does not reflect breadth of opportunities.”

These are not unrelated. The workforce demographics, the poor K-16 system, the state’s abysmal reputation are all manifestations of the silo-like way these conversations have always occurred — and appear to be again. It is a fool’s errand to talk about changing the fundamental nature of Nevada from a gaming and mining state to one that is rich in many, variegated businesses without talking about making the education system a magnet to pull in new people and new enterprises.

I’m sure Nevada could become a honeycomb of call centers, boiler rooms and warehouses and that would be diversifying the economy. But how about aiming a little higher, especially since gaming is not investing here and mining sends much of its money out of here?

Are we going to bring in all of these new businesses, lavish money on them and then ask them to pay nothing for the privilege? Businesses pay a pittance into the state treasury as it is, and if the governor knows the tax base needs to be broadened, why isn’t that in this plan?

Bribe them but don’t charge them? That sounds like Moving Nevada Backward.

There’s still plenty of time. And to its credit, the plan insists on accountability with various metrics set to measure achievement. Sandoval has said he wants 50,000 jobs by 2014, a seemingly arbitrary number plucked from an arbitrary 1.5 percent growth rate and with no requirement as to the quality of the jobs created.

But I would still rather have Gov. Sunny’s outlook than NPRI’s. Just give me a reason.

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