Posted by Webmaster on April 7, 2009 under News, State Government
Great Review Journal editorial today:
…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!
Posted by Webmaster on December 29, 2008 under Economy, State Government
Nevada’s State Archivist Guy Rocha made the front page of the newspaper with news of his retirement. He offered, in addition to his usual ability to fascinate with his command of Nevada history, some political views. For example:
“I find it disturbing this state that has essentially been my life is, in my opinion, on the brink of disaster. You can’t cut 34 percent or more without devastating state government”… Rocha fears legislators in the coming session will cut state spending so severely that it might take decades for his and other agencies to recover.
This is a little melodramatic. The latest estimates of Nevada’s tax revenue for the next two years is that state tax revenues will be about this same for the two years starting July 1, 2007 as it was for the two years starting July 1, 2005, and that it will be about the same for the two years starting July 1, 2009. Our flat revenue is much higher than revenue was for the two years starting July 1, 2003, and that number was swollen with the largest tax hikes in many decades passed by the 2003 Legislature. Later, Rocha notes he was a history major.
Rocha parts with this:
Rocha also criticized the state’s tax structure, saying it relies too much on tourist-generated revenues and leads to wild swings in the state’s financial health.
“We need a 21st-century Nevada, and it can’t rely on tourism to keep driving the engine,” Rocha said. “Tourism will no longer be able to sustain state government unless people are satisfied with a government so small it can’t do very much at all.”
All the available evidence indicates that our ability to export taxes to visitors has led to greater tax structure stability for Nevada, rather than wild swings. The current economic downturn (the private sector is down and losing jobs while the public sector is flat and not losing jobs) started with the “locals” economy of residential construction, and for many months tourism continued to do well, and the 2001 downturn was much less severe in Nevada than most states due to how quickly tourism rebounded.
Posted by Webmaster on December 10, 2008 under News, State Government, Tax Structure
Prior to the 1980′s, the Nevada Legislature approached spending with a measured, responsible eye. Over a couple of years back then, it converted to push hard for more and more spending every session. This attitude was not a function of Nevada’s growth rate, which has run at a constant rate since the 1960s.
During the late 80s and early 90s, the Legislature’s zeal to spend led to an embarrassing series of “budget cuts” caused by the Legislature’s aggressive forecasts of revenue. They planned unrealistic increases in revenue, then planned to spend it, then found themselves having to “cut the budget” back down to fit the actual increases in revenue.
This led to the creation of the “Economic Forum” in 1993 – an independent group that is supposed to forecast revenue without the political addictions to spending that tormented legislative leadership.
Here is the economic forum’s website.
At the close of the 2007 Legislature, the forum was forecasting state tax revenue to be $6.8-billion for the two years starting July 1, 2007. Last week, they estimated state tax revenue will be $5.7-billion for the next biennium, a reduction of $1.1-billion or 16%.
Remember, these dollar figures and percentages are measured over two year periods.
The Economic Forum will make their final forecast for the next biennium at the beginning of May 2009; this will be the “final answer” to which legislators will adjust their spending budget for the next biennium.
Posted by Webmaster on December 9, 2008 under News, State Government
The Nevada Legislature reduced their plans to increase spending by $73-million dollars, but squeezed savings accounts and borrowed money in order to increase spending by another $267-million dollars during a special session Monday.
Here’s coverage from the Review Journal.
Posted by Webmaster on November 11, 2008 under Spending, State Government
Here is the 2007 Nevada Budget In Brief. This document is produced by the state budget office and details the spending plan that was proposed by Governor Gibbons to the 2007 Legislature. It is an excellent overview of how Nevada’s state government spends tax dollars.
