How Bad Is Nevada’s Tax Shortfall?

Worst in the nation, Jon Ralston flashed his audience today, citing the Wall Street Journal:

If you don’t believe what I and others have been saying about Nevada having the largest proportional budget hole, The Wall Street Journal says it’s true – just click on the map

The Journal’s article and chart actually rank Nevada’s tax shortfall as relatively mild, compared to many other states… at 6.5-percent, 16 states have a worse revenue shortfall than we do.

The data does rank Nevada’s legislature as one of the most irresponsible in America. When Nevada’s revenue started tanking, our legislature increased spending by draining all our savings and giving employees an average 6% raise last July. And our legislature plans on increasing spending again in three months – alot.

As a result, Nevada leads the nation in what the Wall Street Journal calls “Projected 2010 Gap as Percentage of FY2009 General Fund” and what Ralston more cleverly calls the “largest proportional budget hole”.

If our Legislature had acted responsibly, and trimmed spending when revenue flattened out instead of increasing spending, we would have an average problem on our hands. This is especially clear in retrospect, but should give the Legislature pause before raising taxes.

Remember, a “budget” is merely a plan to spend… or in Nevada’s recent years, a plan to overspend.

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