I am late in thanking Randy York for the excellent discussion of Nevada’s deficit difficulties. Randy as president of the NV Manufacturers Association well knows the gravity of the over spending over the last several years and the temptation to add new taxes so that it can continue. Those potential taxes whether corporate income, gross receipts or the so-called Texas franchise tax will further hobble Nevada businesses.
Randy got everyone’s attention with some recent economic headlines: gaming revenues down, A&E layoffs, land prices and real estate valuations plummet. The state leads the nation in unemployment; Lyon County’s rate is up at 18.5%. And predictions for job growth will be down for many years. With the $3.2 Billion deficit in mind the state’s budget director Andrew Clinger said you would have to cut everything but education (55% of the budget) to balance the budget.
The Democratic majority typically favors tax increases or new taxes to protect coveted programs and insure public sector jobs. Steven Horsford, the senate majority leader has proposed a 50-50 deal, $1.5 Billion in taxes and $1.5 Billion in cuts. Problem here is the lack of detail and the temporariness of cuts against the permanence of taxes. With over half the legislature being public employees, it is difficult to see how devastating tax increases will not come about. And, it is not as if those public employee salaries and benefits are cheap. Randy showed compensation charts that make NV look like Bell CA!
Simply put, more government, more spending and more taxes will drive businesses from NV and further tank the economy. The only way to guard against this is to elect conservative candidates who will block tax increases and insist on expense reductions and government efficiency.
Randy listed key Assembly and Senate races: Assembly: District and conservative candidate: 5th-Williams, 13th-Hammond, 21st-Sherwood, 22nd-Stewart, 23rd-Woodbury, 27th-Jurado, 29th-Hill, 31st-Thompson, and 40th-Livermore. Senate: 2nd-Gustavson, 5th-Roberson, and 8th-Cegavske.
There has been some sentiment in our membership for a more active role in addressing the issues we discuss. Indeed, our tag line for the Reno Hayek Symposium is: “Articulating conservative solutions to current issues & supporting their intelligent champions.” As Randy ably pointed out, now is the time to support conservative candidates. To that end, we will have special meet and greet candidate interviews between now and the November election. The object is to raise money and where feasible offer “boots on the ground” help to get these folks elected. We will have both email and web notices of upcoming opportunities.
I also want to thank John Dunn for his NV4CFE (Yucca) update, Tom Gurnee for his China business comments, and Jerry O’Driscoll for expanding his recent WSJ article on the balance sheet recession.
Finally Joe Morabito announced a key federal race fund-raiser for Dr. Joe Heck who is running against Dina Titus; this will be held at his home on September 24th. RSVP to Nicole at 702-614-5900 or nsarouphim@gmail.com.
#1 by Victor on August 27, 2010 - 12:59 pm
Tom –
Nevada is having budget issues (as a result of overspending http://npri.org/publications/why-are-hightax-stat… but the severity of the problems have been greatly exaggerated.
In the last budget Nevada spent $6.5 bil. In the next biennium both Andrew Clinger (http://www.lvrj.com/news/rory-reid–balance-state-budget-by-cutting-agencies-101571833.html – towards the end) and the Legislative Counsel Bureau (see pg 8, http://media.lasvegassun.com/media/pdfs/blogs/doc… have confirmed that Nevada is projected to take in over $5 billion in tax revenue.
6.5 – 5 is only $1.5 billion. So why does every keep talking about a $3 – 3.5 billion deficit? Because they're assuming a $1.5 billion spending increase for a total state budget of over $8 billion. — continued in next comment
#2 by Victor on August 27, 2010 - 1:00 pm
So Horsford's 50/50 split is most likely (no details yet) very disingenious, because he wants to cut $1.5 billion in spending that never exist (or existed only on paper). And it also means that the education claim (we can only fund education without tax increases) is hogwash.
Anyway, I believe that this issue (correctly defining the debate) is the most important issue for the upcoming year. Unless believers in the free market and limited government are able to correctly define the debate and defeat this inaccurate assumption, you're setting yourself up for tax increases to pay for spending that never existed anywhere but on some piece of paper.
#3 by Victor on August 27, 2010 - 1:59 pm
One last note – scratch what I said about Clinger. I still think he's using the $5 bil and $8 bil figures as the basis for claiming there is a $3 billion hole, but I misread what he was saying in the RJ. He said he's going to be preparing a $5 billion budget.
I'm sure the LCB projection of over $5 billion is accurate though, I called Russell Guindon yesterday and confirmed it myself.
#4 by Tom Motherway on August 27, 2010 - 5:06 pm
Victor, Thanks for your comments. You are right that we need to get the facts straight in terms of the severity of the problem. I believe we need to go back several budgets and compare population growth plus inflation to budgetary growth and specifically see where the money went. There is so much fat that needs to be reduced.
Steven Horsford is correct in wanting to look at government in total, that is include the counties and cities in the mix. A lot of the so-called services can be delivered at less cost from this perspective.
And, there should be some push back on his 50/50 deal. Let's see the cuts first and let's assure ourselves of their permanency.
Finally, there is no substitute for electing and supporting fiscally responsible candidates. That means donate and talk them up and canvass the neighborhoods! Ultimately, we need to break up the unholy alliance between the legislators and the public employee unions, the latter at the local level.