Political Goodies No One Can Afford

Nevada's Millennium Scholarship

When I was campaigning for State Treasurer, one issue we had to face was the Millennium Scholarship. The Millennium Scholarship is functionally broken. There is no money for it, and the money allocated to operate it has run out.

My opponent in the primary, Drew Johnson, predictably pandered. Drew doesn’t understand money or finance, but he understands talking points and how to tell people what they want to hear. Even today, he is willing to raid the Unclaimed Property accounts to fund the scholarship and has added a raid on Unclaimed Property to fund a brand new scholarship for disabled kids. Meanwhile, he says he will return Unclaimed Property to its rightful owners. That’s a sleazy politician for you.

Both viable Democrats talked about the Millennium Scholarship, but only Joe Dalia had a plan. His was basically the same as Drew’s. Raid Unclaimed Property.The Democratic nominee Tya Mathis Coleman has no published plan. The scholarship is broke, and anyone who was inside the Treasurer’s office knows it.

I am sure I lost votes because I was honest. Departing treasurer Zach Conine was finally honest in his last year.

I answered the question about the scholarship publicly here. Edited for brevity, but you can see the entire answer at the link.

The honest answer here is that the Millennium Scholarship, as currently designed, is for all practical purposes insolvent. Run the numbers honestly. To put the Millennium Scholarship on a permanent, self-sustaining footing using a standard endowment model, Nevada would need approximately $1.9 billion invested at an assumed 5% nominal return and 2% inflation; a real return of roughly 3%.

At Nevada News and Views, they wrote an article about the scholarship. They connect the dots and uncover the community that is underserved by the state. The poor. The poor have no chance, and their college scholarship funding is capped. Not only that, the Millennium Scholarship, besides being financially broke, is being given to almost anyone. It’s not the “best and brightest”. By the way, it won’t matter to a lot of the best and brightest. They will go to schools outside Nevada. The trick for Nevada policymakers is how to get them to come back.

There is a perverse economic incentive built into the administration of the scholarship because it gets some funding from the state seizing stale Unclaimed Property. I believe that artificial intelligence can match up private unclaimed property with the people it should rightfully be owned by. I also am a staunch proponent of private property rights, so raiding Unclaimed Property seems totalitarian to me.

NN&V also wrote about the tribal waiver, which is a different problem in the same vein. It’s a taxpayer-funded giveaway disguised as doing “good”.

Nevada needs to re-examine every program that is funded by taxpayers and given to students for college. A lot of them should be relegated to the junkyard. Nevada is not a huge state with a large tax base. Government has grown to the point where Nevada is between a rock and a hard place.

Choices have to be made. All the voices that are against growth in the state scream bloody murder when a tax increase has to happen to pay for some government program. Data centers are a perfect example of that.

Wealthy people moved from other states to Nevada to avoid high taxes in other states. Nothing will stop them from moving again if Nevada’s choice is to raise taxes. Nevada needs to figure out ways to cut taxes. Ending programs is necessary, but not politically palatable.

Nevada needs to re-examine every program that is funded by taxpayers and given to students for college. A lot of them should be relegated to the junkyard.

There are solid reasons for this.

1. Statistically, graduating from college will give people a path to a better life, but in a world that is changing pretty rapidly, it makes a difference in what your undergraduate major is. Women’s Studies, PoliSci, and Sociology are a waste of time, and most graduates are destined for a life of government/NGO grift, unlike STEM or Business students. Getting a great, solid traditional education, meaning a 1930s-era liberal arts education, is also a good idea with the type of world we will have over the next 30 years. There is always grad school if you want to specialize. Maybe only fund students who do a difficult major.

2. Trade Schools are also a great alternative for a lot of people. Going there combined with classes on economics, accounting, marketing, and finance can help them build businesses.

3. The nature of college itself is changing rapidly. Just like homeschooling is bringing innovation to K-12 education, advancements in AI, merit-based credentialing, and other developments are bringing competition and pressure to a traditional college path.

These are not fun conversations for politicians to have. Business people have them all the time and act on them. Special interests and government giveaways that seem like “free money” even when couched in nice-to-hear political terminology aren’t free.

Unfortunately, I don’t think voters want to hear the truth. But when their taxes go up, they will learn the truth. Maybe.