Correcting the Tax-and-Spend State Budget Myths

(Ron Knecht) – A recent Nevada Appeal story quoted a school superintendent saying about adjustments his district made after the 2001 economic downturn, “I thought we would work our way back out of that in a year or two. But it never happened. It just got worse.”

Such claims are invariably light on numbers and facts but long on rhetoric, because their point is not to educate but to influence the political processes to take more money from taxpayers and give it to provider bureaucracies such as teacher unions.

They always discuss “budget cuts,” not real spending cuts, a practice that lets tax-eaters devise any “budget” reference point convenient to mislead folks about the facts. Contrary to the rhetoric, there have been no year-over-year cuts in actual state spending on K-12 education.

State K-12 spending grew 143 percent over the past decade while Nevada’s economy grew only 106 percent. So, K-12 spending grew not just in nominal terms, nor just with population and inflation, but even much faster than the rapid growth of Nevada’s economy over the years. Spending grew fast, but our schools’ performance, measured by student achievement, declined.

With the Great Recession, tax-eaters, seeking to guilt-trip legislators into giving them always more regardless of how businesses and private-sector families are faring, have turned up the rhetoric.

However, employment numbers give a true picture of private- and public-sector fortunes and an example of what statists don’t know. Over the last 30 months, Nevada private-sector employment has fallen 12.5 percent — a loss of 143,300 jobs. Public-sector employment, however, remains where it was 30 months ago. The public sector, via tax increases and federal borrowing, has fared better by further burdening those businesses and families.

A huge body of evidence says that the bleak prospects for economic recovery and growth are due to the cumulative effects of continuing public-sector overreach in taxes, spending, regulation, other intervention, entitlements and litigation. So, the statist narrative is false in claiming that the public sector has not been adequately funded.

And claims that a no-new-or-increased-taxes position is unreasonable are based on lies, ignorance and greed. What is happening now is that the unreasonable state spending increases of recent years are, of necessity, being reversed.

Now, at long last, some Nevada public sectors face real cuts. As an elected regent who must help implement some cuts, it’s my duty to give people an accurate account to counter the myths folks have been fed.

(Mr. Knecht, of Carson City, is an economist and member of the Nevada System of Higher Education Board of Regents)