You reap what you sow: Nevada’s history of overspending

Victor Joecks

In the Review-Journal yesterday, NPRI’s own Geoffrey Lawrence detailed how Nevada’s overspending over the last few years has come back to bite the state.

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 back-room 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 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 teachers 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.

NPRI’s alternative, line-by-line Freedom Budget is here.