The impending doom that isn’t
Nevada’s political class has many willing flaks within the media
- Monday, February 9, 2009
Words have meanings. It's a simple enough concept, but few people seem to really understand it. Words like "crisis," "devastation" and "disaster" conjure up images of impending doom, but they should be used only when truly merited.
Yet, in reference to Nevada's budget and revenue situation, these words are seen almost daily in the news.
Let's be serious about the subject, for a moment: Nevada faces a mere 1 percent decrease in spending between the current budget cycle and the governor's proposed budget. So-is a 1 percent decrease in spending a crisis?
Of course, how many newspapers and news shows would be able to alarm an audience if they were realistic about the situation? A headline saying, "Nevada faces slight decrease in spending," is not quite as catchy as: "Nevada budget crisis!"
Crisis sells. Reality, often, does not.
Of course, when people point out the absurdity of the party line coming from Nevada's political class, some media outlets rarely give the matter serious consideration. In a recent interview, Jon Ralston asked Nevada Policy Research Institute spokesman Andy Matthews if NPRI is a group of anarchists. NPRI's position, which Ralston took issue with, was that Nevada did not need to raise taxes in order to function properly.
Let's think critically: Is it really the case that spending roughly $9 billion a year constitutes anarchy, but spending $10 billion a year is good government? That, essentially, is the view of those who want to raise taxes, and it's patently absurd.
For the 2007-09 biennium, Nevada is estimated to spend $17.5 billion. The governor's proposed 2009-11 budget is $17.3 billion. Anyone with five minutes to spare and a computer can see this for himself at http://www.nevadaspending.com/. Of the alleged $2.3 billion shortfall, only $200 million represents real cuts-meaning: an actual reduction in spending from one budget to the next. The other $2.1 billion merely represents cuts from the big spenders' level of wishful thinking.
Some agencies face real cuts, others are seeing imaginary cuts and some places will actually see spending increases. Basically, policymakers are taking money from one pocket and putting it in the other and calling it a budget cut.
The Nevada System of Higher Education (NSHE) faces about $300 million in real cuts over the next biennium. While the cuts are undoubtedly large, some of the NSHE cuts are going to fund other government programs.
|
State appropriations by function*
|
||||
|
|
FY 2008 |
FY 2010 |
FY 2011 |
FY 2011 minus FY 2008 |
|
Human Services |
$2,598 |
$2,880 |
$2,996 |
$398 |
|
Education |
$2,579 |
$2,269 |
$2,278 |
($301) |
|
Infrastructure |
$1,300 |
$999 |
$983 |
($317) |
|
Finance and Administration |
$640 |
$195 |
$192 |
($448) |
|
Public Safety |
$627 |
$643 |
$642 |
$15 |
|
Elected Officials |
$584 |
$588 |
$610 |
$26 |
|
Special Purpose Agencies |
$540 |
$672 |
$723 |
$183 |
|
Commerce and Industry |
$205 |
$243 |
$242 |
$37 |
|
Legislative-Judicial |
$118 |
$88 |
$88 |
($30) |
|
Total |
$9,191 |
$8,577 |
$8,754 |
($437) |
*In millions. FY 2009 Actual, not available at this time, is estimated at $8.3 billion.
Although NSHE faces some of the largest cuts, NSHE also previously experienced some of the fastest growth in appropriations. Since the 2001-02 school year, NSHE appropriations had grown at an annual rate of 7.9 percent per year-triple the rate of inflation over that same period of time. Gov. Gibbons' proposed cuts bring that growth rate down to 2.7 percent per year. To put that into perspective, inflation has only grown 1.7 percent per year since June 2001. Once again, a little critical thought reveals that NSHE, too, faces no genuinely devastating cuts.
|
State appropriations by institutions*
|
||||
|
|
FY 2008 |
FY 2010 |
FY 2011 |
FY 2011 and FY 2008 Difference |
|
NSHE |
$842 |
$638 |
$648 |
($194) |
|
UNLV |
$253 |
$174 |
$174 |
($79) |
|
UNR |
$181 |
$125 |
$125 |
($56) |
|
CSN |
$126 |
$99 |
$104 |
($22) |
|
Medical Science |
$38.2 |
$37.5 |
$37.8 |
($0.4) |
|
Dental |
$13.2 |
$13.4 |
$13.4 |
$0.2 |
|
Law School |
$12.7 |
$12.6 |
$12.7 |
$0.0 |
|
NSC |
$17.8 |
$11.9 |
$12.8 |
($5.0) |
*In millions of dollars. FY 2009 Actual is not available at this time.
Thus, the real crisis in Nevada is not our less-than-1-percent decrease in spending. The crisis is that Nevada's policymakers are seriously considering increasing your tax burden. Raising the modified business tax or adding a corporate income tax would put more people out of work and all but halt any chance for economic growth in the foreseeable future. Raising a personal income tax (requiring a constitutional change that could not take effect until 2011) would reduce Nevadans' ability to buy goods and services, and introduce new hardships. Raising property taxes would further devastate Nevada's housing market.
So what are policymakers to do?
Acknowledge that Nevada faces a 1 percent decrease in spending, then deal with it like adults. Get creative in management, cut waste, improve efficiency and fire dead weight.
Raising taxes is the politicians' easy way out of the minor 2009 budget reduction. It would not be easy for Nevada taxpayers.
Patrick R. Gibbons is an education policy analyst at the Nevada Policy Research Institute.
