The “Difficult Choices” Nevada Legislators Are Dealing With
By: Doug Busselman, Executive Vice President
In news conferences, committee meetings and anywhere else they can get a microphone to speak into, Nevada’s legislative leaders are heard to say how difficult things are. After several sessions of having to wrestle with increasing revenue flow and plugging in automatic spending increases for “essential” services, the economy on which they rely for cash has gone rotten.
Going into the 2009 Nevada Legislative Session, the projections were for an estimated level of income for state coffers to be equal to slightly less than the two-year budget cycle that we’re wrapping up right now. We started hearing about “difficult” then, because of the challenge of figuring out how to increase spending when the cash coming in wasn’t more than it has been.
Since that time the revenue coming in started leaking. Now actually having less, in terms of revenue, was becoming a reality.
There was supposed to be a clear signal by now of what amount would be needed to spend on “essential” services. But, so far the agreements haven’t been locked in on how everything isn’t “essential”. At the much-anticipated news conference to give us the “plan”, we found out that things weren’t quite ready.
In spite of the passage of the state’s third highest tax increase, approved earlier this session, approving the extraction of another four-percent from tourist (as well as Nevadan’s who stay in hotels in Clark and Washoe Counties) the challenge continues. Early projections of how much the new tax would bring in didn’t seem to hold as room usage continued to decline.
Could this be a signal of things to come? What happens when the tax rate is increased on the Modified Business Tax (that’s the one where every employer has to pay a tax based on the amount of they pay to their employees) and business enterprises, not able to sustain those costs, reduce or completely stop having employees to pay?
While legislators keep decrying the level of unemployment in Nevada (one of the highest rates in the nation), there doesn’t seem to be any indication that they connect the dots and understand that those becoming unemployed have anything to do with businesses who are not able to financially maintain the ability to pay them.
From the perspective of someone who is watching the process closely and listening to what is being said (without having a chair inside the back rooms of the Nevada Legislative Building where these “difficult choices” are being worked out) – it almost seems that the real options are on how to reach deeper into the pockets of those in the private sector in order to keep paying those more who exist through payments coming from the general fund. Somehow because of the good they do, education (at all levels and especially higher education, who have thrown more tizzy fits than a 2-year old with not enough candy) and other publicly funded enterprises will be given all that the lawmakers can extract from the remains of the state’s business taxpayers.
While one-third of the state’s budget is paid for from revenue coming from the sales tax (the only tax that even citizens pay) could be increased. That kind of “sacrifice” will probably cause even those who support tax increases at all costs to wail. It will be portrayed that Nevada is causing the “poor” to pay even more to cover the costs that only the well-to-do should be expected to pay.
The problem, it seems, is that there is no tax option to acquire funds from those "rich folks" who ought to be coughing up their resources so Nevada government can continue to grow and spend in ever-increasing amounts. Short of coming up with a Supreme Court ruling along the lines of the 2003 brillance (let’s not pay attention to that portion of the state’s constitution) it’s going to require some real creativity to get around that “No State Income Tax” section.
Maybe that’s the long-term game plan…make those who pay now either so miserable or unable to pay any more until they join the chorus to champion a rewrite of the constitution. Until such time as there are unlimited amounts of revenue for state lawmakers to spend on “essential” services…it’s only going to be more of the same for “difficult” choices…
In news conferences, committee meetings and anywhere else they can get a microphone to speak into, Nevada’s legislative leaders are heard to say how difficult things are. After several sessions of having to wrestle with increasing revenue flow and plugging in automatic spending increases for “essential” services, the economy on which they rely for cash has gone rotten.
Going into the 2009 Nevada Legislative Session, the projections were for an estimated level of income for state coffers to be equal to slightly less than the two-year budget cycle that we’re wrapping up right now. We started hearing about “difficult” then, because of the challenge of figuring out how to increase spending when the cash coming in wasn’t more than it has been.
Since that time the revenue coming in started leaking. Now actually having less, in terms of revenue, was becoming a reality.
There was supposed to be a clear signal by now of what amount would be needed to spend on “essential” services. But, so far the agreements haven’t been locked in on how everything isn’t “essential”. At the much-anticipated news conference to give us the “plan”, we found out that things weren’t quite ready.
In spite of the passage of the state’s third highest tax increase, approved earlier this session, approving the extraction of another four-percent from tourist (as well as Nevadan’s who stay in hotels in Clark and Washoe Counties) the challenge continues. Early projections of how much the new tax would bring in didn’t seem to hold as room usage continued to decline.
Could this be a signal of things to come? What happens when the tax rate is increased on the Modified Business Tax (that’s the one where every employer has to pay a tax based on the amount of they pay to their employees) and business enterprises, not able to sustain those costs, reduce or completely stop having employees to pay?
While legislators keep decrying the level of unemployment in Nevada (one of the highest rates in the nation), there doesn’t seem to be any indication that they connect the dots and understand that those becoming unemployed have anything to do with businesses who are not able to financially maintain the ability to pay them.
From the perspective of someone who is watching the process closely and listening to what is being said (without having a chair inside the back rooms of the Nevada Legislative Building where these “difficult choices” are being worked out) – it almost seems that the real options are on how to reach deeper into the pockets of those in the private sector in order to keep paying those more who exist through payments coming from the general fund. Somehow because of the good they do, education (at all levels and especially higher education, who have thrown more tizzy fits than a 2-year old with not enough candy) and other publicly funded enterprises will be given all that the lawmakers can extract from the remains of the state’s business taxpayers.
While one-third of the state’s budget is paid for from revenue coming from the sales tax (the only tax that even citizens pay) could be increased. That kind of “sacrifice” will probably cause even those who support tax increases at all costs to wail. It will be portrayed that Nevada is causing the “poor” to pay even more to cover the costs that only the well-to-do should be expected to pay.
The problem, it seems, is that there is no tax option to acquire funds from those "rich folks" who ought to be coughing up their resources so Nevada government can continue to grow and spend in ever-increasing amounts. Short of coming up with a Supreme Court ruling along the lines of the 2003 brillance (let’s not pay attention to that portion of the state’s constitution) it’s going to require some real creativity to get around that “No State Income Tax” section.
Maybe that’s the long-term game plan…make those who pay now either so miserable or unable to pay any more until they join the chorus to champion a rewrite of the constitution. Until such time as there are unlimited amounts of revenue for state lawmakers to spend on “essential” services…it’s only going to be more of the same for “difficult” choices…
Posted by Doug Busselman at 4/4/2009 6:44 AM 
Categories: Nevada Legislature
Tags: Nevada Taxes Government Spending
Categories: Nevada Legislature
Tags: Nevada Taxes Government Spending
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