Assembly Republicans on Thursday laid out their ideas to save money, calling for major changes to the Public Employee Retirement System and the state’s prevailing-wage laws.
The plans drew immediate protests form Assembly Democrats, who said the ideas attack workers without doing anything to increase education funding or create jobs.
The proposed changes to PERS were most dramatic, calling for all new state hires and others to be put on a hybrid plan that has them partly covered by the existing defined benefit plan and partly in a system that looks a lot more like a 401K program. Assemblyman Randy Kirner, R-Reno, said the switch would allow the state to reduce the overall contribution by both workers and the state from 25.75 percent to about 18 percent of payroll. The state would continue to put 6 percent in the defined benefit plan for those workers, but employees would pay nothing. The state would put another 6 percent in the defined contribution plan matched by 6 percent from the workers.
Kirner said that would allow workers who leave public service to take a substantial portion of their retirement benefits with them in the form of a 401K. Currently, he said, they can’t take anything except the amount they put in to PERS, leaving behind everything their government employer contributed.
That is a valuable benefit in the days when workers are much more mobile, moving from job to job during their career, he said.
Assemblyman Cresent Hardy, R-Mesquite, said his piece of the puzzle is the prevailing-wage law, which he said is costing governments up to 25 percent on public projects.
The law, which mandates higher wages for workers on publicly funded projects, “is an unnecessary burden on Nevada’s recovering economy,” he said.
The prevailing-wage rates, Hardy said, apply to all projects over $100,000 and are so skewed that “some of the rates are higher than union rates.”
Hardy, who is in the construction business, said he believes raising the threshold to $1.5 million and reforming the system to let schools and higher education out of the requirement would spur construction projects and, in effect, create jobs.
Assemblywoman Melissa Woodbury, R-Las Vegas, a schoolteacher, said a sizable amount of money could also be saved by eliminating high school proficiency testing, which she said does little.
Assembly Majority Leader William Horne, D-Las Vegas, criticized the plan, pointing indirectly to the Senate GOP plan laid out two days ago that calls for passage of the ballot question removing constitutional tax limits on mining and development of an alternative to the teachers’ union business tax.
“It seems the only people in this building that think we don’t have to do anything today for education in this state sit on the Republican side of the Assembly aisle,” he said.
Assembly Minority Leader Pat Hickey of Reno said during his news conference that he philosophically opposes putting such issues on the ballot.
“We have said all along that we don’t think tax policy and budgeting should be decided by initiative,” he said.
He said he believes Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, will be open to at least discussing his caucus’s proposals.
Senate Minority Leader Michael Roberson, R-Las Vegas, said despite opposition from the Assembly members of his party, he will move forward with his plan and hopes mining and other industries as well as Democrats in both houses and Assembly Republicans would participate in developing an alternative to what he described as the “ruinous” teachers union business tax.