Even in a down economy, there are still those out there who think the answer to our budget problem is tax hikes rather than spending cuts. But raising taxes is what we’ve ALWAYS done. And no matter how many times we raise taxes, or how high, it never seems to be enough. When will we realize we don’t have a taxing problem in Nevada, we have spending problem? Consider this little blurb from The Economist in 1998:
“By 1998, according to a report from the National Governors Association, state budget surpluses in the U.S. totaled $24 billion - not $24 million, but $24 billion. Tax collections are surging, the state/local sector now collects almost the same amount as the federal government.”
OK, keep that in mind as hop into the Wayback Machine and recall a column by Ralph Heller of the Nevada Policy Research Institute the following year:
“(I)n the last 18 years - since enactment of the ‘tax shift’ in 1981 - Nevada governors (Democrats Richard Bryan and Bob Miller) signed into law more tax and fee increases than the governors of any other state during that period. This was not an easy distinction for Nevada’s governors to earn… State and local taxes were soaring everywhere up to the mid-1990s, even if not quite so dramatically as in Nevada.”
How dramatically?
Heller notes that in 1995 “the U.S. Department of Labor published certain comparative growth percentages for the 11-year period Fiscal Year 1981-82 to FY 1992-93.” In that span of time Nevada’s population grew 59 percent, but the state’s tax revenue exploded by a mind-boggling 223 percent!
And as most of you will recall, tax-hike fever didn’t fade away after the turn of the century, with the Legislature approving the largest tax increase in the state’s history in 2003. Yet despite more than $800 million in additional revenue from that monster tax hike, here we are again, just five short years later, being told the government needs mo’ money.
The author also warned of things to come if history repeats itself. “To his credit,” Heller wrote in 1999, “former Governor Miller squarely faced recession in 1993 with a hiring freeze, but the fiscal discipline didn’t last long. Just three years later, in 1996, Nevada ranked first among the 50 states in the area of increases in government employment. Public employment in Nevada shot up 5.4 percent in that year, compared to a U.S. average among the states of 0.9 percent.
That’s the dark cloud behind the silver lining of the dark cloud of the economic downturn which might shortly force an end to many unneeded and unwarranted government programs, as well as layoffs of non-essential government workers like Tom McCormack. When the economy rebounds, someone is going to have to make sure government doesn’t explode all over us all over again.
Posted on April 21st, 2008 by Chuck Muth
Filed under: Nevada
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