Governor amends budget proposal
Yesterday afternoon, Department of Administration Director Andrew Clinger, on behalf of the governor, presented an amended budget proposal for the upcoming biennium.
The amended budget purports to avert the need for tax increases. It also incorporates at least one recommendation from NPRI's Freedom Budget. However, there are several problematic elements to the proposal that make it an inferior option to the Freedom Budget.
The proposal would involve very few substantive changes and would instead use a series of accounting gimmicks in combination with federal stimulus dollars to arrive at a total figure of about $6.1 billion - $1 billion more than the Freedom Budget.
From all reports, the only substantive reduction in spending would be an elimination of the full-day kindergarten program of dubious merit that the legislature created when coffers were flush in 2005. The Freedom Budget also recommended elimination of this program for a savings of $52 million.
The governor's amended budget would draw $357 million in federal stimulus funds for the state's general fund. It would also attempt to sell the state's rights to many years worth of tobacco settlement funds in order to secure a lump sum of $340 million now. This will, of course, put a strain on the Millennium Scholarship program which is funded mostly through tobacco settlement proceeds. One danger is that this large obligation that was originally sold on the idea that taxpayers would not directly bear its costs may eventually wind up in the general fund if the plan is adopted.
The amended budget would further secure a $160 million line of credit in FY10. A similar move was made by the recent 25th Special Session. Both are likely in violation of the state's constitutional provision that requires the state to operate on a balanced budget.
The new proposals are widely considered to be dead on arrival. This is just as well considering that there are few substantive reforms that would require government to reign in spending and live within its means. Instead the amended budget includes a series of dangerous and probably illegal fund credit lines and fund transfers.
The governor is failing to demonstrate an attitude of fiscal discipline. His office is essentially claiming the need for expansive government but whining about not wanting to pay for it. Unfortunately, he can't have his cake and eat it too.
If the governor is truly committed to not raising the tax burden on suffering Nevadans, his office has to be willing to set priorities and determine which government programs are expendable. He cannot simply propose a budget that exceeds projected revenues and then say he's not willing to pay for his own budget.
Perhaps the governor's office should have spent more time applying the principles contained in the Freedom Budget and eliminating areas of government waste or inefficiency.
