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StumbleSUN EDITORIAL:
Nevada’s budget crisis
Intelligent debate should take place before voters go to the polls
Friday, Aug. 6, 2010 | 2:01 a.m.
With the November general election quickly approaching, it is time for voters to demand that candidates for governor and the Nevada Legislature explain how they plan to address the estimated $3 billion budget shortfall the state will face next year. This will be by far the most important task lawmakers will confront during the 2011 legislative session. It is better to begin airing possible solutions now rather than wait until the end of the session, when everyone will be weary and all too willing to accept Band-Aid solutions that will not do the state any good.
It is refreshing that some lawmakers are talking about some of their ideas. As reported Tuesday by the Sun’s David McGrath Schwartz, Senate Majority Leader Steven Horsford, a Las Vegas Democrat, proposed using roughly $1.5 billion each in spending cuts and tax revenue increases to balance the state budget.
Horsford said: “There has to be some combination of spending reductions and revenue to balance the budget. It should be almost a dollar-for-dollar equation.”
This is a good baseline to begin discussion, much better than the “no new taxes at any cost” demagoguery that Jim Gibbons has preached throughout his political career, including his time as governor. It is time to throw those handcuffs away and place every possible solution on the table, mindful that the future of all Nevadans is at stake.
By all Nevadans, we include the state’s most vulnerable residents — children and seniors — as well as the special interests that help pay the state’s freight.
This will require more than mere proposals from candidates and midterm incumbents. It will also require full engagement by the public, whether in face-to-face meetings with candidates and incumbents or through participation in forums such as those held by social and business organizations or by neighborhood associations.
The idea is for residents to give feedback on the quality of life Nevada should help provide when it comes to schools, social services, law enforcement, transportation and cultural activities. The selfish, narrow-minded approach would simply be to absorb $3 billion in cuts, the consequences of which would surely make Nevada the nation’s most miserable place to live. As we have said many times, Nevada is at or near the bottom of many quality-of-life measurements when ranked against other states.
The reality is that it will be extremely difficult to find anything left in the state budget that can be cut. Elliott Parker, chairman of UNR’s Economics Department, has said that Nevada has the lowest number of state employees per capita and the lowest general fund expenditures as a share of the economy. As Schwartz reported, cutting $3 billion from the budget would force tens of thousands of children to be dropped from health care programs, lead to drug rationing for seniors and the mentally ill, and result in deep cuts to schools and prisons. Even Assembly Minority Leader Pete Goicoechea, a Fernley Republican, has been quoted as saying that a tax increase is “probably coming.”
Rather than fill the next three months with meaningless sound bites and vague, self-serving talking points, office seekers and midterm politicians owe it to Nevadans to address the budget crisis head-on by providing enough detail to spark intelligent debate. This will happen, though, only if the public becomes engaged in the conversation.
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Rory & Sandy need to have some DEBATES.
Both of them are HIDING.
Neither one will be forthcoming as to how to handle the 3 billion pound Gorilla in the room.
Both of them, especially SANDY, are running slick, tightly-reigned campaigns designed to keep the candidates from "missteps".
If you don't say ANYTHING, it can't be used against you.
Any dimwit can figure out that you can't "cut" your way to a balanced budget when you have a 3 BILLION DOLLAR SHORTFALL.
Essential services need funding, or you will pay more than you save through cause & effect.
Thank God the legislature at least is broaching the subject... cuts AND increased revenue sources will be necessary to fill the massive, gaping hole in the budget.
Slick Sandy is NOT his own man. He is a figurehead candidate, hand-picked, bought and paid for, picked out like a lovely statuary procured for your front yard. He looks good, speaks reasonably well, has a nice background, and ABSOLUTELY NO SUBSTANCE.
Its easy "STOP SPENDING MONEY YOU DO NOT HAVE". STEALING from the public is not an option.
First having a low number of state employees doesn't mean anything because states are divided into state and local governments with some states having more at the state level and others more at the local level. Second, how many government workers doesn't tell us anything about the level of funding for government. We already know Nevada's government workers are some of the highest paid in the country. More on this: http://npri.org/publications/government-...
Btw, since the Las Vegas Sun keeps claiming the state has a $3 billion hole in a $6 billion budget - really about $6.6) then it could be reasonable to assume that they would be happy (given this editorial) with a $4.5 to $5 billion budget. http://npri.org/publications/nevadas-fre...
Since the state put in many functions that were like to have programs, they need to go and many of the regulations should be gone. We may need to take some unusual actions that will give the freedom to act back to the state.
If you think that quality of life can be improved then it is up to the individual to improve HIS quality of life. The state cannot take enough money to "give" it to him. The state can create the conditions to make the opportunity available and not use the police power of the state to cut off opportunities.
Raising taxes is the surest way to raise unemployment. Opportunity is the surest way to decrease the unemployment in this state.
I agree with gmag39 that we cannot cut essential services, but we do need to take a hard look at what is and is not essential services. Too many in government know that you go after cops, firefighters and teachers early because they typically have unions to help raise the alarm and people feel like they are essential. While doing this, a lot of junk can sit in the background and not get cut. I would say that if we were really down to the right amount of the essential services and there was insufficient revenue, then we need to talk about tax increases somewhere. But, if you don't get down to the essentials first, you further entrench the wasteful programs. And when things do eventually turn around, you have more revenue which doesn't get returned to tax payers but grows the government beyond the essential services.
Patrick.. I read your article and found it very interesting. An important factor that you miss completely is that pay and compensation for all workers including government workers has a great deal to do with cost of living. The reason worker compensation went up a great deal leading into the 2005 time period was that the cost of living in Southern Nevada was going up by leaps and bounds. I lived and worked in Santa Monica, California for about 40 years. When I moved there you could buy a beautiful home for about $30,000. When I left five years ago you couldn't touch anything for less than 1 million with some selling for $10,000,000.00 and up. It's not uncommon for policemen and firemen in Southern California to make $200,000 a year plus with overtime. They were making $300 a month when I moved there in the 60s and fireman and policeman were required to own homes in the city. Even with decent pay the vast majority of government workers who work in Southern California can't afford to live anywhere near where they work and have very long commutes. Housing prices in Nevada skyrocketed over a relatively short period of time. Workers needed more money to live here. In communities like Palo Alto and Cupertino in the Silicon Valley absolute rock-bottom pay for police and fire starts at well over $100,000 a year. They have chronic labor shortages and can't fill the positions. Why?? Homes cost millions and commutes in and out of those cities are absolute torture because of severe traffic problems. If both the public and private sector want highly educated, qualified workers to fill positions they need to pay wages that are commensurate with cost of living. There was an article in the paper today where the benefits of state workers are being slashed because of budgetary conditions and skyhigh health insurance premium increases. Although housing prices have come down considerably health-care costs in this state are nothing short of astronomical. I refer you back to the article on the two UMC swine flu patients were build $2.5 million. In the 2000 to 2006 timeframe when you had skyhigh housing prices and astronomically high medical costs you're going to have to pay through the nose to get qualified workers. I don't care whether you're a private sector employer or a public-sector employer. MGM pays $400 million a year for health insurance for their 40,000 employees. As premiums continue to rise much of this will be passed onto workers in essence reducing pay.
Prices have come down in Nevada and housing has become much more reasonable. Many worker groups have made huge concessions in terms of pay and benefits. The health insurance benefits for state workers alone now have $7900 coinsurance for family plans. This is the highest I have ever heard of and I've been involved in health care for 25 years.
There are several things that are going to result from the above phenomenon. A dramatic underutilization of medical services. All of my family's doctors have either gone bankrupt or left the state(Curtis Bazemore, Dana Howard, Bang Tran). This is going to lead to even worse health for Nevada residents and higher costs. This will make it even more difficult to bring new workers and industries into this state. He will continue to see an increase in medical related bankruptcies as well as never ending uncompensated care issues plaguing local hospitals.
Finally you will see a dramatic increase in applications for all types of social welfare and the US government will get stuck with more and more of Nevadas medical bills.
Did the Sun use "Intelligent Debate" when referring to the state Legislature, an oximoron if I ever heard one.
As the Sun pointed out, NPRI's figures are false.
For example, the unemployment compensation statistics that claim: "unemployment insurance extensions" keep people from obtaining jobs, was refuted by the person that did the study. He said that his research didn't apply at higher levels of unemployment.
The "low taxes and Republicans" produce jobs and prosperity talking points advanced by NPRI have been rejected by all thinking people. Nevada has the 4th lowest business taxes according to taxfoundation.org, but highest unemployment. Also, the second lowest internal tax rate next to Alaska.
We need to raise taxes to build an arena, high-speed rail and complete some of the major hotel projects. As the cnbc study indicated, Nevada's education system puts us last in competitiness.
Ensign and Gibbons have failed the state.
Zip, government worker salaries didn't come down with the housing market crash (even with the small cuts, they've come out ahead).
Mred, my figures aren't false but you are cherrypicking statistics. Taxfoundation also ranks Nevada in the top half for tax collection per capita...
Arena - junk, total waste of money
High speed rail - really expensive junk
Subsidize hotel projects? - waste of money
Since the largest parts of budgets are personnel, start with the most egregious;
FIRE FIGHTERS AND COPS
The solution is SIMPLE; FILE BANKRUPTCY, FIRE all cops and FF, offer to re-hire at the national average 50K, THIS IS SALARY-NO OVERTIME-they can work what is needed or "THANKS and goodbye"...AND NATIONAL AVERAGE means they get the same sort of pensions private sector on average gets, same insurance, contribute the same to their retirement. Hell it cost 23% more to live in Boston and they work for 50K. You can have 3 FF at 50K or 1 pampered baby at 150K. Note 70% of all FF in U.S. are volunteers. Then move onto the rest of the employees and do the same with them. Remember the bought and paid for elected officials who brought us here.
ohcalcutagirl, you are a complete moron.
Nevada quite has to have the worst politicians in the nation. Go back and work for your lobbying company horsford. Reid may need a job again. Sandoval go back to your $$$ law firm and if you really care about the people of your state you will resign from the race. Nevada doesnt need a palin quitting half way through to make bazillions of dollars touting and spewing nonsense. I am begining to think that Nevada has the most ignorant electorate as well. Your gibbons was the worst what will be next laugh out loud. We shall see election day. There are no choices for the major parties that are good for your state. Reid can't run clark county and sandoval will say anything to get elected. There has to be others running for office. Say goodnight to Nevada come election day if either reid or sandoval are elected.
Sounds like Mr. Patrick R. Gibbons (NPRI)will be getting his "libertarian paradise" in Nevada sooner than anticipated, except for prisons and police. Senator Bill Raggio will ensure that.
Dahn Shaulis
Great Ruins of Las Vegas Tour
To emphasize how inaccurate Mr. Gibbons' point is, in Nevada, education is funded by property taxes which are all included in the states General Fund. In other states, property taxes are locally collected and are excluded from the General Fund. If you adjust for this fact, our General Fund is even lower when compared to those states.
As for taxes and unemployment, how tired is that argument. We've had the lowest tax structure than almost all states for generations and yet here we are with the highest unemployment, the lowest economic diversitiy and most unstable revenue. And the same people who claim unemployment will rise if taxes go up, will also tell you that prices will go up if business taxes go up. Ask them why the national companies here in Nevada have the same price structure (or in some cases lower) as they do in other states with higher taxes (a Big Mac costs exactly the same her as in California with a state tax structure that is close to double the taxes payable here).
In order to attract the kinds of investments that produce jobs you need to have an educated work force. In California when Governor Edmund Brown doubled higher ed spending in the 60's, the number of jobs in California went through the roof in the 60's and 70's. If you want entrepreneurs to invest in Nevada, then first the citizens of Nevada have to invest in Nevada.