Gov. Jim Gibbons announced yesterday that updated “state revenue projections indicate that Nevada will receive $111.8 million less in revenue than originally forecasted by the Economic Forum in November 2006.” The Governor’s office notes that “The revenue reduction is primarily a result of weaker than anticipated sales tax and business tax growth for the next biennium.”
As such, Gov. Gibbons has instructed most state agencies to reduce their requests for new funding in the upcoming biennium by $111.8 million. This raises all kinds of interesting questions:
1.) Are all of the tax hikes on businesses which the Legislature smacked businesses with back in 2003 having an adverse effect on Nevada’s businesses, thereby resulting in a drop in tax revenue from businesses? If so, maybe the Legislature ought to rescind the bulk of that $833 million tax hike in order to get businesses back in business in Nevada.
2.) If Nevada’s economy is slowing down, why only reduce the amount of NEW spending by state agencies? Why not look at some of the EXISTING spending and see if IT’S really needed and/or being used to optimal effect?
3.) If state agencies can find $111.8 million in reductions in spending increases NOW, why couldn’t they have found $111.8 million in reductions in spending TWO MONTHS ago?
4.) Doesn’t this prove that the only way to GET government to reduce spending is to FORCE government to reduce spending? And doesn’t that mean the only way to force government to reduce spending is to CUT TAXES so the government won’t have as much of our money to spend in the first place?
5.) And if they can find $111.8 million in reductions in spending growth alone, why can’t they find $268 million in reductions in both spending growth AND existing spending in order to get the overall general fund budget to under the TASC cap?
6.) And finally, a senior state legislator told me last week that there are about $700 million worth of legislative requests for new spending currently under consideration…including $156 million for full-day kindergarten, $20 million for the homeless and $8 million for a tourist railroad. Can’t we just tell the Legislature that there’s no money, deep-six all of those spending bills, and move on to other issues, thereby shortening the 2007 legislative session by…oh, maybe two full months?
The only way for legislators to keep the spending faucet wide open is to raise taxes and fees. So Gov. Gibbons is going to come under renewed pressure to do just that. Let’s hope he sticks to his “no new taxes (or fees)” guns and FORCES the government and the Legislature to finally make the same kinds of hard choices Nevada families are forced to make every day of our own lives.
Posted on March 29th, 2007 by Chuck Muth
Filed under: Nevada
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