(Ron Knecht & Geoffrey Lawrence) – A recent article by Assemblyman Randy Kirner claimed that the record spending and largest-ever tax increase adopted this year by Nevada legislators and Gov. Brian Sandoval showed “great restraint and balance” and “responsible management” and will “secure a better future for our community and our children.”
That’s all false, and the numbers he used for support are totally misleading.
His key claim is that recent state spending ranged from $607.20 per Nevadan (in 2013) to $771.20 (in 2009), adjusted for inflation (apparently using 1992 dollars). From official records compiled by previous state controllers and their professional staff, adjusted for inflation, the correct numbers are $2,057.11 and $2,359.48.
Kirner’s numbers are about one-third of actual amounts because he cherry-picks an unrepresentative part of a part of total state spending. He uses only general fund amounts supported by state tax revenues. He ignores non-general-fund spending and amounts sourced from federal and other funds but routed through state government – quite disingenuous because he has helped move spending from general to other funds.
There are two reasons his approach errs. First, Nevadans pay taxes and fees to provide those federal and other funds, and the legislature and governor are responsible for approving that spending, too. In fact, federal monies spent by our state place an extra burden on us because Nevada gets a return on federal taxes that is much lower than most other states get.
Second, substantial empirical research shows that the numbers that determine the impact of government on economic growth and the public interest are total government spending amounts, not only those from particular accounts or sources. Research cited in our Controller’s Monthly Report #1 (at Controller.NV.gov) shows that total public-sector spending, including state and local levels, has been too big a fraction of our economy for over 55 years.
This continued metastasis of government has slowed economic growth significantly over the last half-century, directly damaging the public interest and producing an ever grimmer (not better) future for our communities and children. And Nevada politicians and special interests have played a substantial role in this uncaring destruction, especially those who supported this year’s taxing and spending blowout.
What are the true facts? First, state spending’s already excessive burden on our lives and wellbeing has increased 10 percent faster in the last decade than the incomes of Nevada families and businesses. (Due to changes in reporting categories, there is no pre-2004 total spending data comparable to figures since then; otherwise, we would use it. Hence, meaningful comparisons to earlier years such as 1992 are not possible.)
Contrary to many false claims about K12 education and health and human services spending, their funding has increased the most: 23 percent and 37 percent, respectively.
Another misleading Kirner claim is that the number of state employees shows that Nevada government is small. In fact, Nevada’s total state and local tax burden – that’s what matters, not headcounts – has risen to the midpoint: 25thor 26th in the U.S., depending on how measured. Because local governments are subsidiaries of the state and governed by it, legislators and governors bear significant responsibility for local spending too – especially the excesses caused by state laws allowing public-employee unions to drive local spending ever higher.
Kirner makes a big deal about the extent of his participation in the legislative process, as if hearing every detail of the budget means that politicians make the right decisions. Legislators can’t really know the value of each spending proposal when they hear almost exclusively from proponents, most of them paid for by our tax dollars to advocate for their interest, not for voters, taxpayers and the public interest. They certainly can’t determine its net social value unless they get equally extensive testimony in the same hearings on the damage done by the taxes needed to fund each item – and they never do that.
Above all, they can’t make the right decisions if they substitute laboring over program details for focusing on the premier fact that government is already so big – even while still growing – that it has slowed economic growth to a long-term crawl and thus damaged our communities and children’s futures. If they really cared, they’d address and fix that first.
Ron Knecht is Nevada State Controller.