Solving Nevada’s budget shortfall

Patrick Gibbons

Nevada System of Higher Education Chancellor Jim Rogers has outlined his plan for increasing government revenue.  He proposes a mixture of raising fees, raising taxes, borrowing and begging. Assembly Speaker Barbara Buckley and incoming Senate Majority Leader Steven Horsford have not yet said specifically what they want to do, but we suspect it will be similar to Rogers' idea.

Rather than address the root cause of our budgetary troubles – out-of-control spending and zero government accountability – these big spenders want to beg, borrow, and steal (err, tax), and not simply to cover the shortfall, but in Rogers' case, to increase spending as well.

NPRI has some better solutions that don't require raising taxes and harming the economy:

1)      Lease major highway infrastructure to private companies. Indiana made more than $3.8 billion by leasing highways to a private company. This would not only raise immediate revenue for Nevada but would also allow the state to divert funds currently used for road construction to other projects.  Better yet, we could slash the gas tax.

2)      Eliminate the modified business tax (which taxes businesses for each employee they hire, creating a perverse incentive at a time when Nevada desperately needs to create more jobs).  We could cover that shortfall by diverting some room tax revenue.

3)      Encourage a greater number of charter schools to open up, which would allow the state to save about $320 million a year in construction costs.

4)      Allow greater parental choice in education in the form of direct vouchers, which would save up to $800 million a year.

5)      Eliminate "economic development," which would free up $10 million.

6)      Eliminate film subsidies, which would free up $1 million a year. We dare say there is an alphabet soup list of government programs like this that could and should be eliminated. Start with the Arts Council, $2.2 million and Cultural Affairs, $1.6 million.

7)      Why do automobiles in Nevada need two license plates? Require only one, and pocket the change.

8)      Eliminate corporate subsidies. Failing that, deduct $1 in state contributions to local coffers for every $1 in corporate subsidies offered.  This would save millions.  For example, Las Vegas issued $130 million in Tax Increment Financing Bonds this year alone.

9)      Give department heads a greater incentive for keeping costs low.  Perhaps senior government officials should take a pay cut to shore up budgetary shortfalls (or even work for free) before the idea of raising taxes is even put on the table.

10)  Even the person mopping the floor at Wal-Mart has an incentive to keep costs low. Wal-Mart incentivizes employees through profit sharing. Nevada can do the same by allowing workers to share in a percentage of money saved by their agency.

11)  Florida saved more than $5.5 billion over the last decade by opening public service projects to competitive bidding with the private sector. Unionized public employees had to put in bids before being assigned a project.  They usually won the bid, but only after they located savings and eliminated inefficiencies.

12)  Millions, if not billions, could be saved in the long run by replacing the state's defined retirement benefit plan with a private market plan and replacing state health insurance with health savings accounts. This would encourage state workers to be more responsible with their health care while containing health care costs and keeping the state from trying to raise taxes to cover benefits every time the economy takes a nose dive.

13)  UNLV and UNR spend over $20,000 a year for each student enrolled (total budget divided by student population). Does Rogers really expect us to believe that every single dollar is wisely spent, let alone absolutely necessary?

14)  Avoid bonding and borrowing at all costs. Nevada does not want to go the way of California or Arizona, both of which have dug themselves deep into a hole of mounting debt. Every dollar we borrow today is a dollar we make our children pay back later.  Under-educating our kids and burying them in debt are policies fueled by nothing other than big-government greed.

15)  Try serious education reform before resorting to raising taxes. Raising taxes is not a viable long-term solution. Besides, increasing spending for education does not produce a better system of education.

16) Ask Jim Rogers, Steve Wynn, Jon Ralston, Brian Greenspun and all the other flacks for ever-higher Big Government spending to voluntarily contribute more of their own cash to funding the dysfunctional Nevada government education systems they so love. Doesn't Nevada have an "I didn't pay enough fund"?

Yes, these solutions would be difficult to achieve – there are legions of special interest groups in Nevada that live at the expense of everyone else – but reality can only be ignored so long. Ignoring it only means more pain later.

Looking around, we should have learned that by now.