Your move, Carson

Alternative budget shows tax hikes are unnecessary

By Geoffrey Lawrence
  • Monday, May 4, 2009

For months we've heard legislators, lobbyists and union officials decrying the impact that the economic downturn might have on their wallets and not ours.

In order to prop up government spending, many legislators have spent the past few months privately, but not publicly, discussing a range of ideas for increasing taxes on families in Nevada who are already reeling from the impact of economic recession. These backroom negotiating sessions have taken an air of secrecy precisely because legislators are aware that their tax-hike proposals would be met with populist criticism that could cost them their jobs.

Of course, all this has occurred because state policymakers have consistently refused to set clear priorities and exercise a policy of fiscal discipline. Instead, they have pandered and tried to be all things to all people. After passing the largest tax hikes in state history just six short years ago, legislators returned to Carson City for the 2005 Legislative Session to find that they would have an additional $1 billion in tax revenues to spend. And spend they did.

They could have set priorities. They could have deposited that money into a "rainy day" fund to provide for the inevitability of a future economic downturn. They could have said no to new programs. They could have avoided crises in the future.

But they didn't.

They spent that $1 billion. They spent it on new programs that would rely on perpetual increases in tax revenue — programs such as all-day kindergarten and class-size-reduction programs that dilute the teacher talent pool and expose more students to less effective teachers. They did this knowing that existing research showed these programs had no significant impact on student performance. They also knew that Nevada's powerful teacher union — which stood to benefit from more jobs and higher union dues — supported the new programs. They pandered to special interests and vaunted their vision of "progress."

They created this crisis.

Now they are responding to it in the easiest way they know how — easiest for them. By calling for tax increases, they are trying to avoid the more meaningful and difficult task of determining which government expenditures are most important and which are expendable. As every family in Nevada is now well aware, in a world of limited resources families are compelled to establish clear priorities and fund the highest priorities first. You don't buy HBO if you can't pay for food. But state policymakers would force you to buy satellite TV for inmates at state prisons before you feed your children.

Legislators have decried the governor's $6.2 billion budget, claiming they need $8.9 billion to maintain "vital services." Their definition of "vital" includes purchasing plush new furniture for the Department of Employment, Training and Rehabilitation because state employees have complained that their office chairs don't meet their "ergonomic standards." Now when you're standing in the unemployment line, you will know that part of the reason you are there is because of the thrones in which state employees on the other side of the desk are sitting.

The Nevada Policy Research Institute has recently demonstrated that, even now, lawmakers can meet the current budget challenge without resorting to tax increases. All lawmakers need do is establish priorities and pass a reasonable and consistent budget plan. A revised budget proposal of $5.1 billion released this week by NPRI would fall within current revenue projections.

What's more, "Freedom Budget 2009-2011: Road to Recovery," as it's called, would restore funding to the state's highest priority programs. More than $85 million is restored for the care of the mentally ill, indigents and the severely disabled. For K-12 education, $80 million is restored for the purchase of learning materials. To the state's regional colleges, $176 million is restored that would avoid operating reductions.

To make room for spending on these priorities, the Freedom Budget would eliminate many new programs foisted upon Nevada taxpayers as legislators responded to recent years' high tax revenue with increased spending. In addition, this budget incorporates a restructuring of the Nevada System of Higher Education that would realize significant cost savings and allow the two flagship universities to both improve their curricula and determine their own funding levels.

The Freedom Budget includes no reliance on federal stimulus money that would impose costly new mandates long into the future. It is a reasonable and responsible spending plan that would avoid tax increases — lowering the burden on all Nevadans and accelerating an economic recovery instead of prolonging the current recession.

Policymakers in Carson City no longer have an excuse — or any legitimate way to say they can't meet the state's most important needs with current revenues. The hard work's been done for them. The ball's in their court.

Your move, Carson.

We'll all be watching.

Geoffrey Lawrence is a fiscal policy analyst at the Nevada Policy Research Institute. This article originally appeared in the May 3, 2009 edition of the Las Vegas Review-Journal.

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