More NFA testimony to Joint Subcommittee on General Government

Testimony of Alok Pandey (state president, NFA); Shari Lyman (president of CSN chapter of NFA); Candace Kant (past president, NFA)

1. Alok Pandey

Mr. Chairman and members of the committee:

I am Alok Pandey, professor at the College of Southern and a state employee for the past 15 years. I am President of the state board of Nevada Faculty Alliance – an organization that represents faculty and staff members of all eight higher education institutions of Nevada.

First, I want to comment on new hires that come to Nevada with young family, and makes very small salary - please see community college salary schedule for actual salary of new hires and you will see what I mean by small salary, where spouses don’t have a job yet. Cutting subsidiary for such a family will cause these families, as my colleague just mentioned approximately $3000 extra and, will severely affect them. I can say this because I was the only bread winner for my family of four until 2001.

NSHE faculty and staff have always been there to share the burden – financial or otherwise. For example, we gave up our six month merit when this budget cut crisis began and the Governor called to cut our spending first time. Next, we are asked to give up 6% salary along with severe cuts in the health care benefits for current employees & their families and no benefits when we retire – a sincere retirement gift from the government.

Most of us have given or plan to give majority of our adult life in teaching, researching and serving the young adults of Nevada. When we start recruitment, good benefit goes a long ways and most of us took the job in anticipation that the promised health benefits will be there when we need it the most – after retirement. This executive budget simply eliminates the benefits leading us with following consequences:

1. Retire within next four months to get something – this will cause serious problem as we will lose our most experienced faculty and staff and that too all at once.
2. Start looking for jobs elsewhere as soon as possible and that is not a good feeling when we started this job with a life time commitment.
3. We Will not be able to hire able professors, researchers and such professionals – with such health care benefits.

Are any of the above three choices good for Nevada – I hope not. So please help by fixing this problem. Thank you.

2. Shari Lyman, Ph.D.

I am Shari Lyman, Ph.D., speaking on behalf of CSN Faculty as CSN Nevada Faculty Alliance Chapter President. I have been a resident of Nevada for over 40 years and a state worker in various capacities for over 19 years.

Also, I am a Professor of Economics and Women’s Studies at CSN, CSN Faculty Senator, and Ute V. Perkins Elementary School PTA President. As a result, education is very important to me and my world and I know it is important to you and your world. I appreciate that you are concerned about the proposed executive budget and the harm it will do.

The proposed executive budget promises no new taxes; however, the proposed executive budget is full of myths, semantics, and false information because it includes several new taxes on a targeted group of individuals, namely State Workers, active and retired.

I find it tragic that the proposed executive budget focuses on Nevada Education and all Nevada State Workers, active and retired, to bail out the State of Nevada through targeted, regressive taxes in the form of medical benefit decreases, medical cost increases, retirement benefit decreases, retirement cost increases, (in the case of higher education, we have Investment accounts, not retirement accounts - and we know how they are affected by the economy today), salary decreases, merit pay deferrals, COLA deferrals, and Nevada State Department and Institutional Budget decreases for Nevada State Workers.

Education, Kindergarten-Graduate, is unique in its structure because education must be accessible, available, and feasible to students regardless of macroeconomic conditions in the local economy, state economy, and national economy. Educators must provide 100% of a quality education to students, regardless of funding, time, and staffing. To look to education for a stable source of tax revenue is ridiculously tragic for the State’s present and future no matter how you label the tax in an effort to sell it to the public.

However, semantics, myths, and false information aside, the proposed executive budget places the burden of several new taxes on State Workers, particularly those in Education. State Workers will be taxed in multiple ways unlike any other industry, business, or household in the State of Nevada.

The proposed targeted, regressive taxes imposed upon State Worker medical benefits, State Worker retirement benefits, State Worker salaries, and State Department budgets will be significantly detrimental to the State of Nevada:

First, it devalues the loyal, dedicated service the State has received in the past from our retired state employees and demoralizes our veterans of State work.

Second, it diminishes active workers in their loyal, dedicated service the State receives from diverse, dedicated, knowledgeable, academic professionals of the academy. Recruiting and retaining academic professionals is difficult under the best of circumstances without driving them away.

Third, the loyal, dedicated service the State could receive if we were able to recruit diverse, dedicated, knowledgeable, academic professionals of the academy.

However, due to the State’s chronic and persistent shortsightedness resulting in inadequate funding of Nevada Education at every point of the macroeconomic business cycle, education at all levels has been underfunded in good economic times and in bad economic times.

By April 17, 2009, the Nevada State Legislature’s taxation committees will decide which taxes they can increase to cover the Nevada State budget shortfall. Unfortunately, the taxes on State Workers are not considered part of the taxation committee decisions due to semantics, myths, and false information. However, no matter what you call the taxes on Nevada State Workers, they are targeted, regressive taxes that will harm Nevada’s education, Nevada’s economic growth, and Nevada’s future social-political-economic system.

Nobody wants to pay higher taxes, particularly when prices are increasing, unemployment is increasing, and the future appears to be unstable, unsure, and doubtful. However, it is unconscionable to place the burden on one single group of individuals to shoulder the entire budget shortfall for the entire state. State Workers do not want to hurt businesses or households, but the excessive, extortionate plan to have State Workers shoulder the entire burden cannot be allowed under any circumstances at any time without extreme detriment to our social-political-economic system.

Most industries and households are struggling, some are not. The entire state should oppose targeted, regressive taxes on one group alone. State Workers- retired, active, and potential- greatly oppose being singled out for major tax increases that will hurt Nevada families, Nevada communities, and the State of Nevada’s future.

Currently, many Nevada Educators are seeking and/or considering offers from other institutions, other industries, other countries. Other Nevada Educators are securing additional employment to help pay their bills, keep their homes, and make sure they have a future for their children. Many Nevada Educators have experienced significant decreases in their investment accounts resulting in concerns about their future and the future of their families. Most Nevada Educators are concerned that the quality of education and life in Nevada will be degraded to levels not acceptable by any society even in less developed countries.

For the most part, no matter what Nevada Educators do, they are ridiculed by some in the media and by some policymakers who do not understand the unique nature of education and public service. This is the same group of uninformed, uneducated media and policymakers who see Nevada Educators and other State Workers as a cash cow and solution to budgetary crises in good economic times and in bad economic times. This is the same media and policymakers who are not educated about education and a social-political-economic system’s future.

3. Candace Kant

My name is Candace Kant. After thirty two years as a member of the faculty at the College of Southern Nevada, I retired this past August. I joined the faculty in 1976, and at that time, and for the past 33 years, the state of Nevada, my employer, established the expectation that there would be a state subsidy for my health care insurance premiums at retirement. Like most other retired faculty members, I do not receive a state pension – most faculty members are not in PERS but instead pay into a 403B which is subject to the fluctuation of the markets. We have all seen what has happened to them in the past six months. Like other state workers, I am not eligible for social security. And, since I was hired before 1984 the state has not purchased Medicare coverage for me. The only benefit that I receive from the state after 32 years of service is the subsidy of the health care insurance premiums.

One would think from what one sees in the media that retired state workers have access to the finest health insurance available. This is not the case. We have a very modest ‘pay as you go’ system. Benefits and costs are distributed among participants. To make the system work in the face of rising health care costs benefits are cut and costs are raised. Costs of the premiums are shared between employees and the state, as is the case in many states. The plan by no means covers all medically necessary costs. Comparison of the present benefits and costs of the Public Employees Benefit Plan (PEBP) shows coverage to rank in the middle or below other comparable plans. The percentage of premiums paid by our employer ranks right in the middle or at the bottom of comparable systems in every category. The American Association of University Professors, which conducts annual studies of compensation among higher education faculty, finds that at 20% Nevada faculty have one of the lowest percentages of benefits as a portion of salary. The national average is 28%.

Yet even this modest plan is being decimated before our eyes under the guise of reform. The SAGE commission understood that they did not have the data to make a recommendation, so they asked for a study, with the idea of making the state health insurance subsidy commensurate with that of other comparable employers in the state.

The Executive Budget, however, appears to have picked unsubstantiated numbers out of the air to determine the level of state subsidy for state worker’s health insurance. Calls to other large Nevada employees show that most of them have better plans than do state workers, and that employees in the private sector pay less than 25% of the costs while getting better coverage.

The Executive Budget, if passed, would raise premiums for active state workers to a level that creates a tremendous burden on them, especially those who have families and children. The Executive Budget would remove all state subsidies from retirees who are eligible for Medicare, and for those who aren’t, would reduce the state subsidy by 50% increasing premiums more than ten times over what they are presently. These higher premiums will mean that workers, their families, and retirees, might have health insurance, but not be able to use it! When premium rates are that high, the amount of money in the worker or retiree’s monthly budget is decreased. Out of pocket costs for deductibles (which tend to get higher and higher) would make it difficult for state workers and retirees to pay for the kind of preventative health care and tests that can diagnose a condition early. Consequently, conditions would go undiagnosed until such a time when they are advanced and treatment is expensive.

Many of our higher education faculty, like me, were hired prior to 1984 consequently the state has paid no money into Medicare for them. They cannot get Medicare unless they purchase it. It is difficult for retirees to obtain other coverage due to pre existing conditions, or if they are able to get other coverage it is also at tremendous cost. So we are stuck!

The character of a society is measured by how it treats those most vulnerable: children, the sick and the elderly. Higher education faculty and retirees like me certainly recognize that the state faces severe budget challenges. We do not ask to be exempt from the belt tightening that is needed to resolve these issues. But we do fear the consequences of the draconian cuts to the Public Employees Benefits Program.