Vin Suprynowicz

On Thursday, The Associated Press reported “Nevada faces the largest budget deficit in the country for the upcoming fiscal year, according to a recent survey of states by the Center for Budget and Policy Priorities, a liberal Washington, D.C., think tank.

“Nevada will have a 30 percent gap between spending and revenue, edging out Arizona, which faces a 29.8 percent deficit, according to the survey.

“The gap is calculated by comparing expected revenue to the sums that states see as necessary to maintain current state services,” The AP explained.

“Economists and lawmakers say Nevada’s dubious distinction reflects its reliance on sales and gambling taxes and its dependence on tourism. Joe Edson of the Progressive Leadership Alliance of Nevada said the state has long needed a broader-based tax system to prevent deep cuts in services during economic downturns. He said the state lets most businesses off without paying taxes as they do in other states.”

This would all be quite sobering, were it not a bunch of cobbled-together nonsense, as can be quickly demonstrated.

The key phrase to be examined in this brazen financial sleight-of-hand is the one that states “The gap is calculated by comparing expected revenue to the sums that states see as necessary to maintain current state services.”

(Since “states” can’t see anything, and “service” is used here in the sense that cattle breeders use the word to refer to the fertilizing of a cow, to start deciphering this code, substitute the phrase “that big-spending allies of the state employee unions see as necessary for everyone to get another big raise.”)

In fact, anyone with access to a home computer can visit the Wall Street Journal’s current state-by-state revenue chart at http://s.wsj.net/public/resources/documents/st_STATETAX0904_20090408.html, to learn that Nevada’s state revenues are currently down by only 6.5 percent. (Click at the top of the column to get them to rank numerically.)

Sixteen states face worse revenue drops, including Connecticut at 7.1 percent and Arizona at 10.8 percent — those being states that have the very “broader-based” punitive business taxes and state personal income taxes that Nevada tax-and-spenders including Mr. Edson insist we need to “create a more stable revenue base.”

(If those taxes “prevent deep cuts in services” — leaving aside the fact such “services” are often counterproductive — why are Connecticut and Arizona now in worse shape than Nevada? Meantime, if there are Nevada businesses of any size that keep their doors open while “paying no taxes,” I’d like to see a list. The sales tax, gaming tax, and payroll tax are no longer collected?)

But back to the main financial flim-flam: Even assuming state government revenues will continue to fall, that they may be down not merely 6.5 percent but as much as 10 percent during the next biennium (a perfectly sensible guess), that means that If the Nevada state government were currently spending only the amount of revenue coming in, the change necessary to balance the upcoming budget would be 10 percent — either a 10 percent tax revenue hike (which would make the economy much worse), or a 10 percent reduction in spending — a far less severe cut than the artificially ginned-up “30 percent” being bandied about.

And much of THAT modest spending cut wouldn’t be required, had the Legislature not foolishly worsened their own problem by granting all state employees an average 6 percent raise last June, when this looming economic debacle was already obvious.

Now, the Nevada state government is currently spending somewhat more than the revenue coming in, which does exacerbate the problem by a couple of percentage points. But by no means must current state spending be trimmed by 30 percent to balance the budget.

In fact, to get to this bogus “30 percent” number, tax-and-spenders have to start by proposing that current state spending be BOOSTED by 20 percent, in order to reach their mythical “level necessary to maintain current state services.” (And this at a time when both state population and school enrollments have leveled off!)

Then, starting from an imagined, never-seen Cloud-Cuckooland spending level 20 percent above current reality, the tax-and-spenders squawk that Nevada faces a “29.8 percent deficit gap,” the “largest in the nation.”

It’s all smoke and mirrors. To live within currently anticipated revenues, state spending has to be cut by about 10 percent below the spending levels authorized for this fiscal year by the 2007 Legislature. Ten percent. Not 30 percent.

Nor can anyone realistically argue the problem is a lack of money. The Public Policy Institute reports Nevada state spending in 2002 was $7,894 per capita, ranking it as the seventh biggest-spending state in the nation per capita, behind only the likes of New York ($10,392 per resident), Connecticut ($8,101) and Taxachusetts ($8,056.)

Forty-three state spend LESS per capita than Nevada, including Illinois ($7,038 per capita), New Jersey ($6,845) and Virginia ($5,004.)

Nevada’s state government, measured per capita, is both HUGE and PROFLIGATE.
Cutting state spending 10 percent per capita would merely drop Nevada to about 12th place in those rankings, between Colorado and Illinois, leaving 38 states still spending less per resident than Carson City.

If we’re not getting “services” as good as those provided the citizens of Illinois, New Jersey, Pennsylvania, Florida, Arizona, and New Hampshire (and let us think again of the poor cow, wondering what that gigantic thing is, rearing up behind her), it’s not because our state government isn’t spending as much per capita as those states. Carson City is spending MORE!