It’s time for the Las Vegas Chamber of Commerce to take the lead

If ever there was a time for the business community to step up to the public policy plate, it’s now.

Companies of all sizes have watched Nevada’s economy wither as much of the prosperity that was built over the past two decades was reclaimed by the desert.

We’ve heard over and over that a big piece of the solution is economic diversification. But how exactly do you do that if you’re the owner of a small business? Entrepreneurs can design killer apps in their garages, but no one has designed an app that can overcome financial hard times.

It’s going to take the mobilization of a large influential group to come up with a solution to such an enormous problem.

The Las Vegas Chamber of Commerce could be that group if it knows when to lead and when to compromise. Several back stories have begun to converge, and if they mesh just right, we all could be back on the road to prosperity.

When longtime Las Vegas Chamber of Commerce President and CEO Kara Kelley announced she would step down nearly two years ago, chamber leaders put together a thoughtful plan to recruit a successor.

Kelley gave plenty of lead time; her announcement in September 2009 included a departure date of April 2010.

The chamber’s search led to the East Coast where Matt Crosson had spent 16 years leading the Long Island Association.

You might think a longtime Long Islander would be a mismatch for the desert, but Crosson quickly adapted to his new home. He engaged small businesses and megacorporations. He made overtures to the education community. He launched an initiative with a catchy, Vegasy name—“Viva Las Business”—to put resources in local executives’ hands and encourage business-to-business commerce with local suppliers.

Crosson was just starting to hit his stride when tragedy struck.

He fell ill and required open-heart surgery. After being hospitalized, he suffered a stroke. He died Dec. 23 at age 61.

It was an enormous shock to the business community that had found hope in Crosson’s optimism about a turnaround in the local economy. The 6,000-member chamber—one of the largest in the country and arguably the most influential business organization in the state—was once again without a CEO.

ore than a decade before Crosson thought about moving to Las Vegas, Kristin McMillan, an attorney with expertise in utilities and regulated industries, participated in Leadership Las Vegas, a 10-month program designed to strengthen the skills of up-and-coming young executives. She graduated in 1997 and got involved in chamber committees and boards.

McMillan’s career path led her to become managing shareholder of the Hale Lane law firm and then a comanagement position with the Las Vegas office of Greenberg Traurig LLP.

Her expertise in utilities law led her to Southern Nevada’s dominant telephone company, now CenturyLink, where she became general manager in 2006. In addition to being CenturyLink’s top local executive, she was vice president of external relations for the company’s 10-state Western region, overseeing teams in regulatory, legislative and local government affairs and public policy initiatives and advocacy.

McMillan took leadership roles on various chamber boards and in 2010, she was elected to lead its board of trustees. She was on the team that recruited and hired Crosson.

Las Vegas lawyer Mike Bonner succeeded McMillan as chamber chairman the month Crosson died, and he was thrust into the same position as she had been, a chairman without a CEO. Bonner filled that role temporarily, and when the successor search began, somebody asked the obvious question: Why not Kristin McMillan?

“I’ve been very happy at CenturyLink,” McMillan said recently from the office she was about to vacate. “This is a terrific company and when I stepped into this job five years ago, I stepped into a wonderful position and I’ve had a great time.”

Bonner approached McMillan about the CEO post and from there, talks evolved.

“There seemed to be a good fit between my background and what the chamber seemed to need at this point in time,” McMillan said. “I understand the chamber and its needs. I know many of the staff members and have worked with various groups. I could hit the ground running.”

In early April, the chamber announced McMillan’s appointment as its new CEO.

With about a month left in this year’s legislative session, Nevada is at a crossroads. The political poker game in Carson City is nearing its end and several players are still at the table, including the Las Vegas Chamber of Commerce.

With new leadership, now is the time to ask important questions about how lawmakers are going to address the state’s problems and what role the business community should have in solving them: What moves should the Legislature make to improve Nevada’s economy and get the state back on its feet? How can the chamber and its alliance of stakeholders—small businesses and major companies—be a part of the solution? Perhaps most important, does what chamber members think really matter?

Every organization at the table in Carson City plays the game of give and take. For years, the chamber has been the voice against implementing various businesses taxes. Not unlike the Nevada Development Authority, an organization with which it often collaborates, it sold the argument that Las Vegas is a great place to do business because taxes are low and stable. This year, though, a number of studies, think tanks and interest groups have found that the state’s education system has a greater role in Nevadans’ quality of life than many previously thought. Nearly every report recommends the state strengthen its education system to build toward economic diversification.

That hasn’t been lost on the chamber, which has built stronger bridges with the education community in the past year. Crosson embraced new UNLV President Neal Smatresk; now, Smatresk is a member of the chamber’s board of trustees. McMillan said maintaining a close relationship with UNLV and with Clark County School District Superintendent Dwight Jones is a priority.

“Clearly, education is important to the future of Southern Nevada,” McMillan said. “We all know that. Nobody wants to see teachers take pay cuts. These are very difficult and complicated issues. Our government affairs committee is taking a close look at the impacts of the governor’s budget.”

Nevada’s education system lands at the bottom of numerous lists ranking education quality. Further cuts are outlined in Gov. Brian Sandoval’s budget proposal to close a multimillion-dollar funding gap. Would lawmakers allow the state’s system to fall into a bigger hole? What would that say about the state’s commitment to education and economic diversification? Would the chamber be willing to support a tax increase as an investment in the state’s economic future? The answer to that last question appears to be “maybe.”

Really?

In a recent note to chamber members from Hugh Anderson, chairman of its government affairs committee, the chamber acknowledged that it would support a tax increase if—and only if—lawmakers also approve meaningful reform in five key areas, two of which involve education.

“The chamber’s willingness to support additional tax revenue is absolutely dependent on the passage this year of significant and meaningful reforms that will fix systemic problems that are plaguing our state,” Anderson said. “Simply adding revenue will not provide the results Nevada needs. Additional revenue without reform is something we will not support.”

The chamber’s position includes transforming the K-12 system to rewards-based compensation, expanding charter schools and, possibly, enabling a voucher system. For higher education, the chamber recommends changing policy to allow institutions to keep tuition dollars on campus.

“Education governance in Nevada is confusing at best,” a chamber position paper says. “All governors aspire to make improved education part of their legacy, however the reality is that our governors have only had authority over education through the budgeting process. They have no authority to change how education is delivered. That authority rests with myriad boards and committees, too complicated to even attempt to explain. Oversight of education must be streamlined and governor-led.

“Our children need and deserve great teachers—and we have great teachers now. Those teachers should be compensated for their performance. But when we grant tenure to teachers after just a year or two and virtually no teachers have, in recent years, been removed for poor performance, we also must admit that some teachers may not be in the right profession.

“We need to eliminate tenure for K-12 teachers and ensure high quality teachers by requiring student improvement be a significant portion of teacher evaluations. When we find underperforming teachers, we need to give them access to best practice teacher training.

“Only after solid efforts to help them improve performance should substandard teachers be removed from the classroom. But a system that protects poor teachers at the expense of our children cannot continue.”

Chamber policy leaders also say colleges and universities need to be more entrepreneurial, work with the business community, place students where their skills and interests best fit and be aligned with economic development plans.

The chamber also is tying its support for additional tax revenue to reforming the collective bargaining process and adjusting local government pay, fixing the public employees’ retirement system and discontinuing state retiree health insurance subsidies for new employees.

The chamber has been beating the drum of reform of PERS and PEBS—the Public Employees’ Retirement System and the Public Employees’ Benefits System—for years. The 2009 legislative session ended with a small modified business tax increase for nonfinancial institutions with payrolls of more than $250,000 minus health insurance benefits. The effect was that large companies paid more and small businesses got tax breaks. Legislative leaders say 74 percent of Nevada businesses got that break.

The collective bargaining reform plan is similar to proposals that Republican governors have pressed for nationwide. The eyes of the nation were on Wisconsin this year when the debate reached the state house in Madison and lawmakers left town to avoid voting on a reform proposal championed by newly-elected Republican Gov. Scott Walker.

Locally, firefighters and their unions were in the hot seat when sick-leave abuses were uncovered and rightfully questioned. The chamber makes the case that because of collective bargaining, public employees are paid far more than the national average, which exacerbates retirement system obligations.

“High salaries have also resulted in Nevada having the least public employees per person in the country, meaning there are fewer employees providing services to the people of Nevada,” the chamber’s reform position paper says.

The chamber seeks several changes state law regarding collective bargaining agreements. Its five-legged reform plan is thorough and well stated. But with Democratic majorities in the Senate and Assembly, there’s little chance for it to win approval. And that’s where the question about the chamber’s relevancy comes into play. The jury is still out on whether the chamber and its positions matter. But for the good of the state and local economy, they must.

Crosson saw the opportunities in his short tenure as chamber CEO. McMillan and many chamber leaders share that vision and want to pursue it.

What follows are other proposed reforms the chamber should genuinely consider:

• Continue the focus on education. Bringing Smatresk to chamber leadership was a great move. Local leaders can learn from Northern Nevada how the cohesiveness between UNR and the business community there has helped them both. There’s a good core of support for UNLV in Las Vegas, but not to the UNR level. Local business has to get behind UNLV, and it will make both entities more relevant.

• Be willing to compromise. Tying support of tax revenue to a vast reform package that has little chance of passage doesn’t serve the business community, much of which agrees that fixing the education system should be the priority in turning the economy around. Chamber lobbyists need to recognize that the goal should be winning small reform battles instead of the whole war.

• Support, but don’t try to take the lead on economic diversification. A big change expected from the Legislature this year involves the transformation of the Nevada Economic Development Commission into a more public-private partnership. Economic diversification is an important issue, but it’s not the chamber’s key responsibility. But the chamber should respond to inquiries about the pros and cons of relocating to Southern Nevada, and that means being honest about education and how it can be improved.

• Engage the gaming industry. One would think that in a city like Las Vegas, casino companies would dominate the chamber of commerce. Most major gaming companies except Station Casinos are members, but gamers don’t dominate public policy discussions. McMillan said one of her goals is to focus on where the gaming industry and the thousands of other members have common ground. “I think we have a very good relationship with our gaming members,” she said. “Our role is to find ways to successfully serve the entire business community.” But there’s no doubt that the gaming industry carries a lot of weight with lawmakers. The chamber can capitalize on that if it can align its public policy decisions with the state’s leading industry.

• Continue great chamber programs. Leadership Las Vegas is one of the best programs it has developed. It’s the program that brought McMillan in and it has developed hundreds of savvy businessmen and women. Other organizations have tried to replicate the program. “Who doesn’t like Leadership Las Vegas?” McMillan says. Indeed.

• Build bonds with other chambers. There’s no doubt that the Las Vegas chamber is king of the hill. It’s the by far largest chamber in the valley. But there are other business voices in Las Vegas to be heard. The Las Vegas chamber has reached out to others—the Latin chamber, the Urban chamber, the Asian chamber—and encouraged some joint meetings. The two other major municipal chambers, in Henderson and North Las Vegas, have or are getting new leadership. Now is a perfect time for there to be greater cohesiveness among various voices of business in the valley.

• Let the new leadership take charge. McMillan has enormous shoes to fill and she knows it. But she has taken on big jobs before, overseeing a major communications industry merger and riding herd over regional offices in 10 states. She’s smart and charismatic. That skill set is necessary to build compromises that need to occur if we’re going to get our economy on track.

Right now the chamber has the opportunity to truly matter in this important city’s business community. Right now, we really, really need it.

Carpe diem, Kristin McMillan. The time has come—again—to seize the day.