Editorial: Time for humble pie

Monday, May 10, 2004 | 8:53 a.m.

Sunday's story by reporter Steve Kanigher shattered the crystal ball that a minority of legislators were peering into during the Legislature's 2003 session. If the state broadened its tax base and, however modestly, increased existing taxes, Nevada's economy would be in for a free fall, anti-tax legislators had predicted. United by this vision of gloom, the minority so knotted the Legislature that an extra two months were needed to finish.

Fortunately, the majority of legislators prevailed and new and increased taxes, projected to boost state revenue by $416.5 million a year, were approved. And where is the economy now, eight months after individuals and businesses began paying the extra taxes? Kanigher researched all of the state's economic indicators, including employment, personal income, business start-ups, taxable sales, gaming revenue and home construction, and learned they are all up -- way up.

The state is now on its way toward recovering from massive projected deficits that would have forced severe cuts in public services such as education, public safety and mental health. And there is even hope that the reserve fund -- which prevents costly borrowing during emergencies -- can be replenished.

The moral of the story is that state economies are built, rather than destroyed, by sufficient investment in public services.