The housing market crash and drop in tourism have left Nevada short on cash and unable to pay for promised services. Nevada's projected budget shortfall of more than $1 billion has many on the Left screaming for more taxes. If taxes are not raised, they argue, the $1.2 billion shortfall will be devastating to "essential" state services. However, let's not be quick to blame the economy for Nevada's current situation.
Over the last decade the growth of Nevada's real spending per capita has increased 18 percent while personal income per capita only increased 9.8 percent. In three of those years, budget growth exceeded 12 percent, doubling the rate of inflation and state population growth combined. Even after adjusting for inflation, state spending has increased 72 percent over the last decade.
Nevada's spending spree, which exceeded population growth plus inflation and even the growth in personal income, was simply unsustainable. Now that Nevada's spending binge has been brought to a halt, the first step toward recovery is admitting that we have a spending problem.