Spending Every Last Red Cent

By Steven Miller
  • Monday, July 1, 2002

For the better part of the last four years we Nevadans have been told ceaselessly that our state government faces a “structural deficit.” And because of this dire situation, we are given to understand, we all must submit to some new, major and as yet unspecified increase in our tax burden.

It is important to recognize from the outset, however, that this particular way of characterizing the state’s situation is significantly disingenuous. Under the Nevada constitution the budgets of this state—like those of almost every other American state government—must be balanced. Nevada does not now and will never have a “structural deficit.” It is only the federal government that has the “privilege”—unfortunately a virtual tradition—of operating in the red, year after year. Indeed, the very provenance of the term “structural deficit” is the federal budget process.

No, what Nevada lawmakers face are choices: How will they balance the next state budget? Will they reduce expenditures, or will they impose a heavier tax load on Nevada residents? It is as simple as that. And it is because this choice is so clear and so stark that the special interests that always pursue ever-higher government spending have sought to confuse the question, and the public, with this misleading language.

Laymen understand “deficits,” of course, but “structural deficits” sound like something technical and arcane. Like many terms that have emerged from the haunts of professional economists, the phrase has a significant power to intimidate people—to virtually insinuate that lay taxpayers should just be quiet and trust the “experts.” Who are the experts? Why, those who warn of the dangers of “structural deficits,” of course!

When important public issues are framed in such a way, it has the effect of nullifying what should be an honest process of public debate. In this particular case, the terminology is not only misleading but is also biased toward those who favor a heavier tax burden on Nevadans. To the extent that the state’s problem is defined simply as a deficit, to that same extent the requisite “solution” is also, thereby, implicitly suggested: “Find money to fill it.” The important question of whether government big-spenders should get more taxpayer funds gets pushed aside. Instead, simply how to rustle up those monies for those unchallenged big-spenders becomes the focus of attention—sweeping aside a matter of the utmost seriousness for the credibility of democratic process in the Silver State.

Nevada’s more fundamental problem is not this particular predicted budget shortfall. Nor is it those that are asserted to be stalking us down the road. Rather, it is the clear inability of Nevada’s state elected officials—manifested again and again over the last 20 years—to refrain from spending every last red cent that finds its way into the public purse. And then, always and again, to surreptitiously raise taxes—notwithstanding their inherently destructive effect.

Throughout the last decade this pattern became significantly more pronounced. Repeatedly during the revenue-rich fat years of the 1990s, Nevada’s elected leaders chose to ignore prudent counsel and wastefully indulge politically powerful special interests out to use state government for their own ends.

The fiscal result has been to heedlessly expand the state’s long-term commitments significantly beyond the carrying capacity of the existing Nevada-taxpayer consensus. The non-fiscal result has been to increasingly bring the Legislature itself into disrepute, as its accelerating rapport with organized special interests more and more tends to stratify Silver State citizens into the privileged and the ordinary—depending upon how much state power one can deploy. In the lingo of contemporary Las Vegas: political “juice.”

The State of Nevada and its citizens have always had a unique social compact— an understanding that here in this land adults are to be treated as adults. For one thing this meant that Nevadans’ moral choices were primarily their own affair—not something for government to attempt to control. For another it meant that residents’ earnings and property holdings belonged to them and them alone. Beyond a bare minimum of unavoidable taxes, Nevada government was never seen as authorized to take residents’ wealth for the subsidy of large and collectivist state enterprises.

But that’s what we are all witnessing today—a well-choreographed campaign to rupture Nevada’s longstanding and unique social compact—and replace it with something that we, or our families, moved here to escape.

Steven Miller is the policy director for the Nevada Policy Research Institute.

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