UNLV study changes, but main conclusion remains intact

It’s still all good — it’s just not as good as we originally said.

That’s essentially the message of an “updated” analysis of The Education Initiative by UNLV’s Center for Business and Economic Research, a research paper that generated controversy as soon as it rolled off the printer last month.

And while its central conclusion is still intact — the 2 percent margin tax would generate a net increase in jobs and economic activity for the state if Nevada voters approve Question 3 this fall — the newer version (released Tuesday) reads like the authors downplayed their original conclusions in the face of mounting pressure.

Consider the original: “Consistent with academic research, our analysis for the Nevada economy using the REMI model finds that the increased government spending that is supported through the margin tax created by the Education Initiative would have a net beneficial effect on Nevada’s economic activity. The benefits of the additional spending supported by the margin tax would more than offset the negative effects of the increased business taxation.”

And the “updated” version: “Our analysis for the Nevada economy using the REMI model finds that the increased government spending that is supported through the margin tax created by the Education Initiative would have a small net positive effect on Nevada’s economic activity. The benefits of the additional spending supported by the margin tax would slightly more than offset the negative effects of the increased business taxation.”

The original: 13,000 jobs created in 2016 and 10,400 jobs created in 2017.

The updated version: 4,000 to 11,500 jobs created in 2016, and 1,700 to 1,900 in 2017. (Oh, and “we consider the smaller figures more realistic,” the authors said.)

Original: An increase in Nevada’s gross domestic product will range between $630 million and $1.02 billion in 2016, and between $480 million and $790 million in 2017.

Updated: State GDP will rise by $362 million in 2016 and $163 million in 2017 (assuming the state raises and spends nearly $800 million on education).

And, the authors add, “it depends how the additional funding affects education spending. If all the additional revenue is used to hire new teachers [as opposed to giving raises to existing teachers] total employment in the state of Nevada will be boosted by roughly 11,500 jobs in 2016 and 9,100 jobs in 2017. The net gains include job losses in most, but not all, private-sector industries.”

Underlying assumptions can radically change results, and the nature of the margin tax makes predicting precise impacts almost impossible. But it’s clear that UNLV researchers have been under incredible pressure to back off their original, and bolder, conclusions.

It began when UNLV Acting President Don Snyder distanced the university from the research and asked the Brookings Institution to perform a peer review. And it’s continued since, as Nevada’s business community roars in obvious disapproval of any research that tends to support a tax they’ve come to hate.

Dan Hart, who’s heading up the campaign for The Education Initiative and who commissioned the center to write the report in the first place, dismissed the impacts of the update. “It’s going to improve our economy and we’re going to have more jobs after it’s passed,” he said. That accurately characterizes both the original UNLV study and the updated version. And that’s undoubtedly the message you’ll see on a TV screen soon.

Opponents in the Coalition to Defeat the Margin Tax will surely latch on to the revisions to claim the research is flawed (as if they haven’t been guilty of exaggerating the results of their own number-crunching). But the level of panic that has resulted from this study points out something else: the business community is very concerned about The Education Initiative passing, which would for the first time put a levy on business revenue in this state.

And now, thanks to UNLV, we have good reason to suspect that the world will not end as predicted if The Education Initiative passes.

Steve Sebelius is a Las Vegas Review-Journal political columnist, who blogs at SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at 702-387-5276 or ssebelius@reviewjournal.com.