How State and Local Government Spends Your Money
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Veteran journalist Ed Vogel wraps up the 2011 Nevada Legislative Session.
Vogel notes “Nevada delivered a balanced budget while taxes stayed the same” but can’t fail to note that both candidates for Nevada Governor last year promised that they would not renew taxes scheduled to automatically expire. The promise – which appears to have been what most Nevadans wanted, if the polls that drove the major candidates’ campaigns were right – was not kept.
The Tax Foundation’s new analysis of the 2010 US Census shows that little has changed – Nevada remains one of the states most successful in shifting its tax burden off of residents and onto non-residents. The new data shows us ranked 49th in the amount of personal income consumed by state and local taxation, but 37th in the amount of total state and local government spending as a percentage of personal income.
Driven by the highest local government (cities, counties) pay in the United States and moderated by less lucrative state-level worker pay, Nevada overall ranks sixth-highest government worker pay in a new study by the Las Vegas Chamber of Commerce.
An Associated Press Wire Story that ran in today’s Review Journal and Reno Gazette Journal (read it here) is an example of embarrassingly bad journalism. It states, over and over again, that Nevada has the worst budget deficit in the United States, quoting:
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.
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.
We recently had occasion to check out the new Open Government website from Governor Gibbons. I could spend hours here!
Nevada News Bureau