Interview: Nev. Treas. Dan Schwartz on Bid for Governor

May 29, 2018

Nevada’s Republican State Treasurer Dan Schwartz describes himself as a practical conservative. Over the past four years he has been an outspoken critic of Governor Brian Sandoval, the $750 million room tax for the Raider’s stadium in Las Vegas and the adoption of the Commerce Tax. Now as a candidate for governor, Schwartz says he wants to completely overhaul of the state’s public education system starting with funding for education savings accounts.

He spoke with KUNR’s Paul Boger to talk about his agenda.

What do you see as the most pressing issue in Nevada right now?

Well, I think there’s two or three of them. One of them, which we try to make as a single issue, is education. You know, Governor Sandoval passed this tax hike, $1.2 billion. We spend $2 billion a year, and what do we have to show for it? We are last in every major national report on education. It’s shameful and it needs to be corrected. What I’ve said is that I will sign no bill unless I have an education reform bill including parental choice on my desk.

I think also the bought and paid for issue. We have a site called Laxalt for sale, and the same thing for Sisolak. It’s just appalling the amount of money that is taken from special interests and insiders and lobbyists. I haven’t taken any, I don’t intend to take any and this needs to be reformed.

The diversification of our economy is a big, big issue. We subsidize the gaming and entertainment industry. They think they pay a lot, they don’t. They pay less than 20 percent of the tax revenue. It’s a good amount, but… This whole stadium is a subsidy for the entertainment industry. This state won’t make it into the next century unless we change that. I love people coming to Nevada, but the people who live here – including me and you – we need an economy that’s high paying jobs and 21st century economy [sic]. Lot’s of other issues, but those are the two or three big ones. Let’s break that down a little bit and talk about education.

If you got a bill right now that could fix education, what would it look like?

Well, what I want is a total overhaul of the education system. What I want is all 63 legislators to form a committee of the whole and really begin to look at it. The administrative organization needs to be looked at. I think we need to continue the breakup of the Clark County School District. We need to redirect in hotel revenue taxes from the stadium to education or mental health or some combination thereof. I want to fund universal parental choice. I want to develop program to involve parents in their child’s education. I want create career pathways for kids. We’re not going to tell a kid, a child in first or second grade, that he has to be a Ph.D. or a plumber, but I think to start making school relevant and interesting we need to create these career paths. I think we need to ensure English literacy. I think this is a number one, or certainly one of the top goals, of the education system.

We need to focus on teachers. That probably means a pay raise for the really good teachers and some additional instruction for those who aren’t. We need to reduce administrative layers in the middle, somewhere between the state superintendent and the high school principal. We need to better understand the role that poverty plays in a child’s ability to learn. If you spend the night sleeping in the car because you don’t have a house or enough to eat, that impacts your ability to learn in school. I want preschool. Our job is to educate and every parent I’ve talked to who’s sent his or her child to pre-k and Headstart has said it really made a difference for my child. So, there are a lot of things to do and we need to get on it.

You mentioned E.S.A.’s (Education Savings Accounts), you’re a proponent of it, but if you become governor you’re going to have to work with a heavily Democratic legislature. How do you think you get that passed through a body that, quite frankly, has been very opposed to it?

Paul, you’re point is very well taken. Just on my own recognizance, again I haven’t been elected – I have a couple tough elections ahead of me – I talked to a very senior Democratic legislator. When I talked to him, he was very opposed to it. He said it was the end of our conversation. He then gave a press interview where he left the door open. He said ‘I need to be convinced of it.’ I think this gentleman is an open and fair-minded guy. I think this is crucial. We can talk about E.S.A.'s. We held hearings on it. The legislature asked the state treasurer, me, to come up with the regulations. We had three separate hearings. This is s a middle-class issue. It’s for single parents. It’stwo-incomee parents who spend their time working and it’s for military families. It’s for special needs families. It’s an important tool in this state’s ability to educate our kids. It doesn’t really take away money from the public schools because we have per pupil funding mechanism. It really opens the door to a whole set of options for parents who want their kids to have a good education. I’m adamant. I don’t think Governor Sandoval ever really cared, but I care and I care a lot. So, maybe there’s a rumble in the jungle but I don’t think so. I want higher teacher salaries. Democrats are very much for high teacher salary. You know, politics is about compromise and I think they can be persuaded that this is a worthwhile endeavor. Let’s have at it.

There’s been discussion for the last 50 year, but it’s come up again this election cycle, to look at the Nevada Plan – the state’s education funding formula.

You know, I don’t have an opinion on that right now. It’s just not working and that’s why I said I want the whole legislature involved with this. The people of this state need to know that their elected representatives care about this issue and they’re willing to devote their entire focus, their entire efforts to fixing it.

Let’s switch gears and talk about healthcare. There has been this movement to repeal key aspects of the Affordable Care Act over the last several years that have ramped up over the last 18 months. As Governor, how would you work to protect those individuals who are currently covered under Medicaid expansion?

For starters, I’m not going to kick Uncle Harry out of his wheelchair. I’m not going to repeal Medicaid and we’ll continue to take care of those in our community who need healthcare. I think the focus really needs to be on costs in addition to the checks we write. What I want to do is I want to separate what I call cuts and scrapes insurance from catastrophic insurance. Cuts and scrapes insurance , and this goes for the Medicaid recipients too, can actually be provided inexpensively whereas catastrophic is a different matter. Those generally require hospitalization, they’re cancer, they’re cardio, etc., and really begin to look at what the cost elements are. I think Congress just can’t seem to get their arms around it, but I think we in the state can develop a healthcare insurance plan that effectively focuses on cost rather than how much we are going to pay out and really begin to separate cuts and scrapes – you have an you have an headache, earache, whatever – from the much larger medical costs.

I’ve been told Assemblyman Sprinkle will bring forward a Medicaid for all bill next session. Would you support something like that?

I’d have to look at it. When you say Medicaid for all, the truth of the matter is – and I haven’t seen the latest statistics – but over the last two or three years, something like 85 percent of Americans are covered by their employer. It’s a huge issue, but it’s not a huge as some might believe. I think we’re talking about 15 percent. This is the Democratic answer. It’s wonderful but who is going to pay for it? There’s also this debate over gun refort. 

How do you feel about Nevada’s gun laws?

I respect the 2nd Amendment, but I oppose assault rifles for criminals or pill-poppers -- you know, the mentally incompetent -- and I’d love to see a bill to try and move that down the pike. But I’m not going to touch guns. I’m not going to take anyone’s guns away. As I said, except assault rifles – which no one really needs. Beyond that as I’ve said it’s a constitutional amendment, it’s a constitutional right. I have other things I want to do, and as you know, and as our number show, the people in this state barely pay attention to what’s going anyway. So why not spend what limited oxygen I have on education. Let’s spend it on putting an end the corruption in Carson City. Let’s use it to reform healthcare. Let’s use it to diversify the economy. If I can get those things done, I’ll be a happy governor.

But would you as governor work to enforce the state’s background check law?

Yeah, if it’s a law in the state, I will work to enforce it. It’s that simple. The governor, constitutionally, cannot pick and choose what laws he wants to enforce. So, if it’s the law, I will enforce it. The Commerce Tax has become a major issue in this particular election.

What do you think about the Commerce Tax?

I want to repeal it. Philosophically, it’s a bad tax. What’s really bad about it is tht we as Nevadans rejected it four-to-one, and Governor Sandoval just ignores that and get’s it passed in the legislature. It’s the same thing as Question 1 on guns. Adam Laxalt, who is an opponent, decides that he doesn’t like it so he refuses to enforce it, coming up with some alibi. It is the task of the governor to pick and choose what he likes and doesn’t like. If the people, obviously, there’s other issues, but if the people have legitimately voted on something then it should be acknowledged and observed. I make an observation, I’m not saying I’m not going to do anything, but our gaming industry contributes less than 20 percent of the revenues for this state and they are taxed by a factor of 50 percent at the lowest rate in the country. Above that next cover bit, if you will, it jumps up to 25 percent. Tax abatements. The governor’s office has been giving stuff out like it’s candy. We cannot finance our schools, our hospitals, our roads if we keep abating taxes. What I can say is Nevada is a great place to do business. We have not corporate of personal income tax. For the price of a garage in San Francisco you can by a house in Nevada. Our regulators confirm decisions in weeks, not months or years. So, let’s build the infrastructure. Let’s go reach out and encourage some industries to move here. So there are ways to finance it. Legitimate ways, and were not doing it.

You have been an outspoken critic, and in this interview already, you’ve mentioned the room down in Vegas to pay for the Raider’s stadium. Talk to me a little bit about that and why you think it’s a boondoggle, if you will?

Yeah, and I appreciate that. I’m the only businessman, the only one with a financial background that’s running for governor. I think the state’s issues now are most certainly economic development. They’re about financial management, and this state’s financial management is a disaster.

There were three special sessions. The first one was the Tesla plant. The jury is still out on that. I think it’s going well. Reno is going through a real revival, but Tesla continues to report hundreds of millions of dollars in losses. We need to keep an eye on that. Faraday Future was a bust. Again, I was the only person that opposed that and after 18 months it finally imploded. Then there was the stadium. This stadium, to me, is the con of the decade. This is a $2 billion+ project that’s floating on a sea of debt. They’ve taken $750 of public money, and that’s the only real, sole support of this stadium. Sheldon Adelson’s Sands was going to contribute $650 in equity. He pulled away when he took a look at it. Now we have a Bank of America package there. No one has seen it because Steve Hill and Steve Sisolak won’t show it to anybody, but what are the provisions for repayment? That money’s got to be repaid, it’s a construction loan. And then the Raiders are a joke. He’s promised $500 million. He’s got a $200 million loan from the NFL and the rest he’s selling personal seat licenses and naming rights. Where’s that money gong to go? Is it going into Mark Davis’ pocket? Then the stadium isn’t going to come in at $1.8 or $1.9 billion. It’s easily $2.2 or $2.3 billion project. So what’s going to happen – and I’m predicting this – a year from now the stadium authority is going to run out of money and their not going to have any idea where to get it from. Let’s go beyond that. Sisolak and Laxalt, Laxalt was making phone calls in support of this, if they get elected they can deal with it and it ain’t going to be pretty.

Let’s look at the tax abatements. GOED, which is the Governor’s Office of Economic Development, hands out tax abatements, which are tax breaks, like it’s Christmas candy. Apple Computer – which just announced a $100 billion stock buyback -- was given six percent of the sales tax from the state. That was very nice of the governor to do that, and then the remainder (I don’t know what the sales tax is in Reno – 2.25 or 2.5 percent) the rainbow flag of Reno gave them the rest. So, here we have this enormous company, which is doing business – and I think it’s great that apple is here – paying no tax. They don’t pay corporate income tax. They don’t pay personal income tax. They have 100 employees and no sales tax. Why are we doing that? Why do we have a trade office in Mumbai and Beijing and not one in San Francisco and LA? Why aren’t we encouraging UAV – unmanned aerial vehicles? Why aren’t we encouraging solar? Why aren’t we encouraging technology? It’s because all of the legislators are paid off by the big casinos in Las Vegas to subsidize them. That just needs to stop. If it doesn’t stop this is going to be a backwater in 100 years or 50 years or 20 years. It gets the blood flowing and the adrenaline pumping.