As Nevada’s politicians gear up for a special session to reduce its plans for government spending down to the level of its tax revenue, the Las Vegas Sun this morning profiled politicians who want to raise taxes. Assemblywoman Peggy Pierce told the reporter:

We have the smallest government in the country and it’s not even close.

This is a whopper of a lie. Nevada has an average sized state-and-local government, although because it shifts a large portion of its government funding onto visitors, Nevada residents pay less than other states’ residents. But Nevada’s government spending, in study after study, is average.

Assemblywoman Pierce has been lying about stingy government in Nevada since she was elected. That’s not news. The more striking aspect of this story is the question it poses about the media’s responsibility to give Assemblywoman Pierce a platform to lie without any fact-checking.

Should the Las Vegas Sun’s reporter David McGrath Schwartz have corrected Pierce’s prevarication?

No doubt the Confused Wing of Nevada’s political and press corps will again complain that we need to raise taxes in Nevada, rather than do what all the other states are doing (which is reducing spending in line with revenue).

• Proud socialists PLAN in Reno
• even prouder socialists Center for Budget and Policy Priorities in Washington
• Two democrat Nevada Assemblymen

as saying the Nevada has the largest budget deficit of any US state.

Paragraph three does, correctly, yet briefly, note that the gap is calculated by comparing revenue forecasts with what government thinks it needs.

In Nevada’s case, the legislature is planning to increase spending to a level 20% higher than our current revenue.

Meanwhile, our revenue is going to be around 10% less than current levels. 20% more plus 10% less equals a 30% budget gap, America’s largest.

Nevada has the largest budget gap because Nevada has the most unrestrained, irresponsible legislature of any state.

Here’s a reality-based look at Nevada’s actual revenue shortfall – sixteen states have it worse than us.

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.

…despite the fact both population growth and school enrollments have leveled off — even the “maintain services at current levels” spending Carson City Democrats apparently consider “as low as they’ll go” represents 17 percent more spending than the budget enacted by the Legislature two years ago — 26 percent more than actual spending of about $6.3 billion.

For months, the bureaucrats and Democratic legislators have been making a show of tearing their hair, weeping and moaning about “cuts,” lambasting Gov. Gibbons for submitting a budget that will supposedly leave schools and hospitals no choice but to close their doors, leave children and old people to starve in the streets, etc.

What cuts? Where are the cuts? Most Nevada taxpayers are figuring out how to tighten their belts and live on less. But a 17 percent spending increase — a revenue increase of 37 percent over what’s now flowing in to state coffers, new or increased taxes to generate an extra $2.16 billion, to a new record income level of $7.96 billion — is the minimum lawmakers will consider?

Yes, state government’s general fund actually spent $6.3 billion from the GF over the last two years, but the revenues were only $5.8 billion. Incidentally, that is just about the same amount of revenue we received in the prior biennium. For the coming biennium, the latest estimates (which are unofficial guesstimates from the Legislature, who has a long history of manipulating guesstimates for political purposes) say we will collect $5.1 billion, plus about $250 million from the new room tax, and about $400 million from the federal stimulus money.

So the actual revenue decline (assuming the federal stimulus and room tax) with no further tax increases is less than 1%. Those are the facts, pure and simple. Our population is barely growing now and the CPI is also very low.

To say a 37% increase in revenue is imposing harsh cuts is only possible in the delusional world of government spending. The problem centers on the fact that the government (particularly the state legislature) increases spending on autopilot by granting raises and expanding benefits every year, and any reduction in those automatic increases is falsely described as a draconian cut. The majority of the political media – Ralston and Sebelius – make no bones that they passionately desire more government, so they repeat the false descriptions from legislative leaders, and portions of their audience too lazy to check the math buy into and repeat it.

So now legislative leaders say it’s a cut if further increases are not implemented. There are a lot of private businesses that would be real happy to have only a 1% reduction in revenues and the spending adjustments needed to balance the books would be much easier than what they are facing now.

Oh, did we mention 20% of the employees at the Las Vegas Chamber of Commerce just LOST THEIR JOBS!

The Las Vegas Review Journal reports the story…

The Census Bureau says the Metro area hit 1.866-million last June 30, vs. local government estimates (passed up to the State Demographer before becoming “official”) that had us at just under 2-million. The difference is more than six percent, equal to three years of our current pace of 2% annual growth.

Cities and Counties in Nevada are incented to exaggerate growth because each jurisdiction’s population is a primary factor in determining how much of the state’s “Consolidated Tax Distribution” they get.

CTX, as it is known in government finance circles, is a complex formula that divvies up a group of state taxes including the car registration tax, liquor taxes, and cigarette taxes.

If Henderson, for example, has more people than North Las Vegas, then Henderson gets a bigger piece of the pie and North Las Vegas gets a smaller piece of the pie. As a result, all local governments exaggerate. Every ten years, they have to drop down to the official census count.

The unfortunate side effect of exaggerating growth is that anti-family lawmakers point to the exaggerated population counts and claim they need to raise taxes on existing Nevada families in order to provide government services to pretend people.