a service of NPRI

June 7, 2005 
Vol. 1, No. 16

Editor's Note:

This edition of BusinessNevada is brief and early. That's because staff this week is attending an East Coast conference on taxpayer protection strategies.

Hopefully, you'll see the benefit soon.

---Steven Miller


Nevada Taxpayers Association



Future Shock

By Michael Barone
U.S. News &
World Report

For much of the 20th century, Americans sought security in the form of guarantees from large organizations.

The federal government would provide Social Security benefits for workers and their dependents. Large corporations would provide defined-benefit pension plans promising specific payments to retired employees.

The assumption was that experts at the top of these big organizations could use scientifically obtained knowledge to take better care of us than we could take care of ourselves.

Now there's reason to challenge that assumption. The experts, it turns out, are fallible. The Social Security system faces rising gaps between revenues and promised benefits starting in 2017 and an exhaustion of trust fund assets in 2041. Meanwhile, large corporations - the latest is United Airlines - have defaulted on their defined-benefit pension plans and passed them off to the government sponsored Pension Benefit Guaranty Corp., which does not pay all of the promised amounts.

The Social Security system's problems are, in large part, the product of increases pushed through Congress by House Ways and Means Chairman Wilbur Mills way back in 1972 and signed by President Richard Nixon, who was running for re-election.  [continued]

WHY BusinessNevada

How schools cheat

Whether the topic is violence, test scores, or dropout rates, school officials have found many ways to hide the scope of school failures, to deceive taxpayers about what our ever-increasing education budgets are buying, and keep kids locked in failing institutions.

By Lisa Snell
Reason magazine

On March 17, 2005, 15-year-old Delusa Allen was shot in the head while leaving Locke High School in Los Angeles, sending her into intensive care and eventually killing her. Four months before that several kids were injured in a riot at the same school, and last year the district had to settle a lawsuit by a student who required eye surgery after he was beaten there. In 2000, 17-year-old Deangelo Anderson was shot just across the street from Locke; he lay dead on the sidewalk for hours before the coroner came to collect his body.

Violent crime is common at Locke. According to the Los Angeles Police Department, in the 2003-–04 school year its students suffered three sex offenses, 17 robberies, 25 batteries, and 11 assaults with a deadly weapon. And that’s actually an improvement over some past years: In 2000–01 the school had 13 sex offenses, 43 robberies, 57 batteries, and 19 assaults with a deadly weapon.

Sounds unsafe, doesn’t it? Not in the skewed world of official education statistics. Under the federal No Child Left Behind Act, states are supposed to designate hazardous schools as “persistently dangerous” and allow their students to transfer to safer institutions. But despite Locke’s grim record, the state didn’t think it qualified for the label.


OSHA access to job site often touchy subject

By Alana Roberts

When Nevada Occupational Safety & Health Administration officials come knocking, employers should know their rights and responsibilities, a lawyer told a group of contractors and other employers during a recent OSHA compliance seminar.

"OSHA doesn't have any right to just walk onto your job site any more than a cop does to walk into your house," Charles Keller, a Phoenix-based lawyer for Snell & Wilmer, said.


AFL-CIO handed another defeat, workers win again

Court Upholds Union Transparency Rules

WASHINGTON – The US Department of Labor won a decisive victory for American workers in the war on union corruption last week as a federal court upheld the Department’s tough new rules requiring the nation’s largest unions to file detailed financial disclosure reports. The decision was unanimous.

Interview with SEIU Chief Andy Stern
Los Angeles Times

Fifty years after it was formed by a merger of two powerful labor factions, the AFL-CIO is on the brink of a historic split. SEIU President Andrew Stern, the man who set the maelstrom in motion, sits for a candid interview.

While the AFL-CIO and other major labor unions were enthusiastic supporters of the Sarbanes-Oxley act requiring more disclosure of finances by public corporations, the same unions have vehemently fought efforts by the Bush Administration to make more information on union finances available to their own members and the public.

Increased transparency is seen is as an essential ingredient in deterring corruption by union officials. Indictments and convictions of union officials in numerous financial corruption schemes is an ongoing problem that has cost union members millions of dollars in the last decade.

Union officials were unsuccessful in claiming Secretary Elaine Chao exceeded her statutory authority under the 1959 Labor Management Reporting and Disclosure Act when the Department updated and modernized the information large unions must file annually. The new rules provide members and the public with more details concerning union income, expenditures, and membership statistics. That information is seen as key to allowing union members to make informed decisions concerning membership and leadership.

In a minor setback, the court invalidated disclosure rules concerning trusts in which unions have an interest. The case is AFL-CIO v Chao.

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