Risking our future

Public service is a high calling, and we should be grateful to our fellow citizens who toil in state and local governments to ensure a high quality of service for us all. Certainly, we want to compensate them fairly for their dedication and hard work on our behalf.

It is unlikely, however, that any taxpayer believes public servants should receive more compensation than private-sector employees for similar work. Yet this is the case throughout our governments at every level in Nevada -- more so at the local and county levels in our two major metropolitan areas. While the salaries paid to state government employees are fair, they also receive extraordinarily generous retirement and health benefits. Unless we make radical revisions to the total compensation packages enjoyed by public employees, there is little hope that essential services and programs can be provided at current levels -- let alone where we should be.

Gov. Jim Gibbons formed the Nevada Spending and Government Efficiency Commission last year to study the executive branch of state government and to make recommendations to him -- and ultimately the Legislature -- on how to deliver high-quality services to our citizens for the least amount of money. He appointed 14 senior business leaders from throughout the state to this bipartisan commission: seven Democrats and seven Republicans, 10 from the south and four from the north. He asked the legislative leaders, both Republicans and Democrats, for suggestions on the commission makeup, choosing six members from their suggested nominees.

This is the strongest, most knowledgeable, most diverse group of business leaders ever brought together as a state commission in Nevada and perhaps the country. Collectively, they have hundreds of years of experience in managing complex organizations that must be efficient to survive.

Gibbons did not establish the SAGE Commission to solve the short-term revenue crisis but rather to help guide changes needed to ensure the health of state government in the future as our population grows to nearly 5 million over the next decade.

The SAGE Commission has made 24 recommendations to the governor that, if fully implemented, could bring as much as $2 billion in savings to taxpayers over the next five years. It is noteworthy that 22 of the 24 recommendations were forwarded to the governor with the unanimous support of the bipartisan commission.

By far the most consequential of the recommendations involve the way we pay state employees. As in most government enterprises, the majority of the cost of state government is in compensation to employees. As I noted earlier, the issue with state employees is not their salaries. From the testimony and input of nearly 30 organizations and individuals, the SAGE Commission determined that, by and large, we pay state employees a fair salary for the work they perform when gauged against our private sector. That does not mean that every job is equitable to the private sector or that every job is paid at the correct salary. It does mean that, overall, taxpayers pay state employees a fair salary for the services we receive.

What is out of whack are the benefits we provide to state employees, including retirement contributions and health care for current and retired employees. The commission was shocked to see how the Legislature has allowed these benefits to spin out of control over many years. The result is that taxpayers are now paying about $200 million a year more in benefits to our state employees than those workers could expect in the private sector. Let me reiterate that: In the next five years we will pay an extra $1 billion in overly generous benefits. As the state grows and as we add employees, the cost to taxpayers will continue to skyrocket unless the Legislature acts now to correct these inequities.

Nevada is not the only state facing the fiscal problems associated with runaway employee benefits. Many other states -- and many of our large, legacy private employers -- are addressing this issue now. It is imperative that the Nevada Legislature act now, in this session, to adjust benefits for our state employees to levels that are similar to our private sector. A failure to do so threatens the state's ability to perform its essential functions.

Bruce R. James, former CEO of the Government Printing Office, is chairman of the Nevada Spending and Government Efficiency Commission. See www.sagenevada.org for detailed information and the commission's recommendations.