Nevada’s not fat, it’s big boned
If your only source for news was ... well, the news, you would think Nevada's budget cuts are literally cutting through to the bone.
From Erin Neff at the Las Vegas Review-Journal to editorials and articles in the Las Vegas Sun and Reno Gazette-Journal, the pundits are calling any cut to the state's budget a cut to the bone. If they're correct, then Nevada's budget was a skinny one at best.
As NRPI has shown in the past, Nevada's spending has increased faster than population growth plus population and even faster than personal income growth. So if Nevada is skinny, then its taxpayers are anorexic.
But the truth is this: Nevada's government is taking more per person today than a decade ago. Nevada's general fund revenue per capita in 1996 was $937 per person (in 2007 dollars), while in 2007 it was $1,165 per person, an inflation-adjusted increase of 23 percent. If Nevada had maintained its per-capita spending and revenue levels since 1996, our 2007 revenue figure would be $620 million less than the actual figure.
That's $228 for every man, woman and child in Nevada. That would have been a nice tax break.
Nevada's estimated $520 million revenue shortfall for the 2009 budget is small by comparison and shows that we're hardly "cutting to the bone." Nevada can cut millions more and still provide the same level of services it did in the 1990s.
In fact, despite the revenue shortfall, the state spends more money per person in 2008 than it did in 1996. Using revised figures for FY2009, we still have a 0.5 to 3.4 percent increase in per-capita general fund revenue growth (depending on population estimates).
Far from a disaster, the revenue shortfall (generated by out-of-control spending by Nevada's Legislature) is a boon to Nevada's taxpayers. So if Nevada's budget is being cut to the bone, rest assured – it's a really big bone.