(Victor Joecks) –
Every company needs a business plan. Without a clear set of goals, a business won’t know what to aim for or whether it has achieved success.
Similarly, Nevada conservatives and libertarians need clear goals heading into the 2011 legislative session. The following should top their list:
1. Control taxes by controlling spending. Worried about what higher taxes — specifically a gross-receipts tax or a corporate-income tax (two ideas being floated by leftists) — would do to your business? Then your first concern needs to be reining in Nevada’s General Fund spending, which some want to increase from $6.4 billion to $8.3 billion for the next biennium. Nevada is projected to collect about $5.3 billion in General Fund tax revenue.
Many of Nevada’s current problems stem from the 2005 legislative session. Flush with money after passing then-record tax increases in 2003, lawmakers increased General Fund spending by 50 percent (30 percent after adjusting for population growth and inflation).
Such a massive increase wasn’t sustainable then and isn’t sustainable now. Instead of returning Nevada’s spending to historic norms, liberals now want a permanent tax increase to pay for the inflated spending levels that have been in place since 2005.
To win the debate over taxes — in this session and in future years — limited-government proponents must first win the debate over spending.
2. Change Nevada’s budgeting process. A key public-relations advantage big-government advocates enjoy is that Nevada’s inferior baseline-budgeting process is written into state law (NRS 353.230, paragraph 3).
Baseline budgeting requires the state to roll over all spending from the previous biennium and assume increases based on certain factors, including employee pay raises and case-load adjustments. These “roll-up” costs have recently amounted to more than $1 billion per biennium.
This process lets government employees and program directors claim their wages or funding is being cut, even if they receive more money than in the previous biennium — as long as the increase is smaller than the baseline-budgeting process calls for.
The alternative is zero-based budgeting, a fancy term for how the real world budgets intuitively. Instead of assuming government programs will exist and grow forever, elected officials start from scratch. Lawmakers identify goals and determine the best way to achieve them – based on results, not spending amounts.
3. Put Nevada’s checkbook online. As a matter of principle, taxpayers should know where and how government spends their money.
As a practical matter, a detailed accounting of government spending discourages waste and helps hold elected officials and government agencies accountable for how they spend public money.
Nevada officials have this information, but report it will cost about $250,000 to put it online. While it is important to watch every penny of government spending, transparency should be a top priority, not an afterthought.
This initial cost would likely generate substantial savings. Texas and Utah, to cite two examples, each saved millions of dollars by putting their respective state checkbooks online.
4. Education reforms based on the Florida model. Before any discussion of Nevada education can take place, the myth that “Nevada doesn’t spend enough on education” must be dispelled.
Over the past 50 years, Nevada has nearly tripled its inflation-adjusted, per-pupil spending on public K-12 education. What do we have to show for it? A graduation rate of 41.8 percent, according to Education Week.
Fortunately, Florida provides a blueprint for how Nevada can improve.
In 1998, Florida and Nevada posted the exact same score on the National Assessment of Educational Progress fourth-grade reading test. Florida’s then-governor, Jeb Bush, pushed through a series of education reforms, including vouchers, tuition tax credits, an end to social promotion to the fourth grade, expanded virtual learning and letter grades for schools based on performance.
The improvements have been dramatic. Over the past 12 years, Florida’s fourth-grade reading scores have increased by approximately two grade levels, while Nevada’s have increased by only half a grade level. Florida’s gains have been especially pronounced among its minority community, as Hispanic and African-American students’ reading scores have increased by 2 ½ grade levels.
By focusing on these four objectives — controlling spending, reforming the budgeting process, making government transparent and reforming education — conservative and libertarian lawmakers can help lead our state in the right direction.
(Victor Joecks is the communications director at the Nevada Policy Research Institute. For more visit http://npri.org/. This article originally appeared in the February 2011 edition of Nevada Business.)