A year of critical decisions about training
July 26, 2010
As the chief executive officer of Nevadaworks, I am often privileged to participate in various meetings with other community leaders where we receive input on items of concern and interest that affect our educational and workforce structures. Last month, this input came from our three most recent former governors. Having the opportunity to interact with these men and get their observations on the current challenges facing Nevada was eye-opening, to say the least.
Northern Nevada has been the beneficiary for decades of industry diversification efforts that have broadened the skill sets of our workforce while bringing new areas of employment to our citizens. The track record of integrating new business models and new industries into our economy has been very positive. Our hard working, well-trained employees have satisfied the diverse needs of current and potential employers. Now suddenly, all of that is at risk.
It is now old history that Nevada has been one of the hardest-hit states during the national economic downturn. In May, our state surpassed Michigan, the previous four-year leader, as the No. 1 state in unemployment. Why? Well, one reason was that our diversification was not as thorough as we had hoped. Twice the national average of individuals in our area were employed in construction, which seems to have evaporated in our region. Another reason was our still-significant tourism-based economy was impacted by the national economic downturn which, tied in with a sudden draw back in retail spending, meant the domino effect had begun.
With state tax revenues severely affected, cuts to state-funded departments such as K-12 and higher education were inevitable. This past year has given us the worst reduction in education financial support perhaps in our entire state history.
Unlike neighboring states, Nevada does not have a strong record of funding very many workforce training programs. When our economy was booming, the general thinking seemed to be that businesses would move here because of our low taxes and would train their employees on their own or use funds such as those available from Nevadaworks.
With the economic downturn a national event, many states started offering or increasing business training incentives if companies relocated and hired from that state’s labor pool. Nevada does not offer many such incentives. Other states adjusted their educational programs to meet specific needs of 21st century business models. Nevada cut education programs. Many states made their training dollars more flexible with an eye to meeting the needs of developing new industries. Nevada kept relying on outdated inflexible federal training program dollars.
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And that is not the bad news.
The bad news is that it now appears everything is going to get worse. During the next biennium, state revenues are projected to be more than $3 billion dollars below anticipated needs. As with our own personal budgets, this means either more cuts or more revenue. More revenue for our state means additional or higher taxes. Most taxpayers do not want higher taxes and as a society, we don’t want cuts in very important programs such as K-12 and higher education. So what should we do?
The three former governors were in total agreement that this is the time for all business interests to get actively involved in the political process. Nevadaworks has forged a strong working relationship with our counterparts in Las Vegas which is a dramatic change from the recent past where the historic north-south divide seemed to dominate our actions. Now is the time for other organizations to do the same because this is one state, and our crisis demands unity, not division.
With the certainty of a new governor, term limits dictating a substantial change in the next legislature, and a plethora of candidates for these positions, businesses must take the lead in demanding that the same old solutions to the workforce and education challenges be changed. Twentieth century solutions of raising taxes on a select few industries and/or substantially cutting K-12 and higher education are now a death knell for this state.
This cannot be an election year as usual. Everyone must be involved. Businesses must understand where problems exist and offer realistic solutions to those desiring our votes. Don’t ask for promises to not raise taxes. Instead, ask for realistic reforms. Let’s change specific Nevada Revised Statutes that limit or restrict local governments from implementing cost savings. Let’s demand a broader-based sales tax that eliminates many of the tax exemptions so the pain of taxation is more equally shared. Let’s seek promises that cuts in necessary education funding will not be draconian.
Education is now lifelong and our workforce needs training if it is to be competitive. Nevadaworks is focusing on funding training aspects that businesses say is needed. However, these funds will be wasted if our state does not add training programs to its education funding.
Competition among states for new business is at a fever pitch now and this is not the time to continue ignoring additional training needs. Left unchanged, our state loses credibility with new businesses looking at Nevada.
This cannot be an election year as usual. Attend forums. Ask tough questions and do not accept sound-bite answers. Support change at all levels of government. Demand reforms. If your business is not a member of an industry association, seek one out and join it so as to have more input in correcting these serious problems.
Public education and workforce training are very important to our future. Living through this nightmare of massive unemployment and loss of revenues is a wakeup call. Our response between now and November 2nd will set the course of our state far into the future.
“If not now, when? If not us, who?”
Tom Fitzgerald is chief executive officer of Nevadaworks.