Columnist Erin Neff: Lawmakers would rather dip into rainy day fund

Erin Neff

Friday, March 7, 2003 | 5:40 a.m.

SEVERAL LAWMAKERS support wiping out the state's rainy day fund because they point to the current budget crisis and say: "It's raining."

But it has been drizzling in Nevada budget circles since the 1981 tax shift, and the cumulative effect is more like a 22-year flood.

The governor wants lawmakers to approve $77 million in emergency taxes before the end of the month, and he wants them to transfer $100 million out of the rainy day fund to make sure the current fiscal year's budget balances.

The problem for Kenny Guinn is that he has already made close to $300 million in cuts for this fiscal year and can no longer say there will be a deficit on June 30.

But more ominous storm clouds loom on the horizon, and Guinn cannot be certain he won't have a deficit to fill despite all that he has already cut.

Under his plan, the governor would use $50 million in next year's budget to repay half of what he wants to take from the rainy day fund. He argues the reserve is needed in case of a bad forest fire season, an economic downturn or some other problem.

Lawmakers don't want to raise taxes to pay back an intergovernmental loan. It's one thing to tell constituents you had to raise their taxes to pay for education or health care. It's quite another to make them pay so that the state's savings account can be a little bigger.

Many legislators would rather roll the dice, using the $136 million rainy day fund instead of emergency taxes and praying the state's revenue doesn't seven out.

Guinn simply reminds: "Where would we be today if we didn't have the rainy day fund?"

If the governor didn't have $100 million to pump up the general fund, there would be layoffs and service cuts at both the state level and at the local school district -- both rely on state funding.

When lawmakers like Sen. Sandra Tiffany, R-Henderson, say it's raining, they imply that the weather is going to improve.

But that belies all forecasts pointing to a $704 million deficit in 2004-05.

The modern meteorologist doesn't allow you to wake one day to three feet of unexpected snow.

And if Nevadans have been listening to economists and studies, they'd know that the 1981 shift away from property taxes put the state on ground so shaky that a deficit was foreseeable 10 years ago.

Sales and gaming tax revenues are not stable sources of income. When tourists stop coming -- because of the economy, war or whatever -- we don't have enough money to fund government.

If the expected war with Iraq results in more terrorist attacks or more fear from travelers, you can bet the casinos will lay people off -- people who will then need more state services.

Lawmakers should approve the emergency taxes.

If the money isn't needed to balance this fiscal year's budget, it simply carries over to the 2004-05 budget and reduces Guinn's $984 million proposal.

The Legislature already has one proposal to add a license plate for Ducks Unlimited, a group hoping to protect Nevada's wetlands.

While it seems likely that lawmakers won't push through what Guinn wants, it might as well OK the plate because it's going to be raining statewide for some time to come.