(Jim Clark) – Nevada just made another list of “worst’s.”
We are one of 10 states courting fiscal disaster according to the Pew Center on the States. We are right up there with California, Arizona, Rhode Island, Michigan, Oregon, Florida, New Jersey, Illinois and Wisconsin all of which face severe budgetary problems.
Actually, California “is in a league of its own” according to Pew, being on the “brink of insolvency”. The other nine states have not had to resort to issuing IOU’s to meet their obligations as yet.
These 10 states account for more than a third of the US population and economic output so we’re talking about some heavyweights here.
Nevada even made the national news with Las Vegas Sun political pundit Jon Ralston appearing on Jim Lehrer’s PBS News Hour, explaining that Silver State legislators have always believed Nevada’s economy is “recession proof” because people will always gamble. Maybe so but it seems like a lot of financially pressed Californios are staying home and going to Indian casinos.
Ralston told his interviewer that for the current biennium Nevada’s projected revenues were half of what its $6 billion in continuing obligations are so legislators cut spending by $1 billion, raised taxes by $1 billion and used $1 billion of federal stimulus money to balance its books. The stimulus is a one time source of revenues and the tax increase sunsets in two years, Ralston said.
Pew lays Nevada’s woes to “exploding unemployment and foreclosure rates, expanding budget shortfalls coupled with legal and political risks of prolonged fiscal problems.” The “legal risks” were defined by Pew Managing Director Susan Urahn to be the constitutional requirement of a 2/3 legislative majority required to raise taxes.
Sounds to me to be something of a political statement since many of the other states on the list have more lenient constitutions but still ended up on the same red ink roster as Nevada.
“Nevada has had five commissions”, Urahn said; “Every one of them has recommended broadening the tax base. They never did it.”
Echoing Urahn, Liberal Democrat Assemblywoman Shiela Leslie (D – Reno) said: “That’s the one hope I have that the prolonged recession will lead us to the most difficult political solution, but the very necessary one, which is to broaden the tax base.”
“Broaden the tax base” means “find new targets to tax.”
Conversely a spokesman for Gov. Gibbons’ (R – NV) said: “The governor believes it should be difficult to raise taxes on people. If the Pew Center has a problem with that the governor believes that is the Pew Center’s problem.” While I admire Gov. Gibbons’ sentiments he doesn’t give me any confidence that he has a plan for the next biennium budget.
We are just entering the pre-election season even though formal filing is not until next March. Currently candidates are seeking endorsements and trying to fill their campaign coffers in hopes of scaring off competition from within their own parties. What better time to ask them tough questions. Here’s one:
“The only lasting change made by the prior legislature was to cut spending by $1 million; the $1 million in tax increases will sunset and we can’t count on stimulus money for the next biennium. What will you do to fix things?”
The candidates who come up with viable plans which do not involve tax increases (or “broadening the tax base”) are the ones we should support. I will be pleased to report candidates’ (or readers’) ideas on this subject. This problem won’t solve itself.
(Jim Clark is President of Republican Advocates, a vice chair of the Washoe County GOP and a member of the Nevada GOP Central Committee; he can be contacted at email@example.com)