Where Do We Cut Nevada’s Spending?
By: Doug Busselman, Executive Vice President
On my Sunday morning trips to town I often catch up on the re-broadcast of the Nevada Newsmakers program. This past Sunday was no exception and I got to listen in to the grilling that Nevada Gubernatorial Candidate Mike Montandon took because of this point of view that Nevada’s taxes shouldn’t be raised. Based on the numbers that are being considered as the expectations for the coming legislature in 2011, what was once viewed as a troublesome opinion (not raising taxes) is now considered as being anti-Nevada. How dare anybody think that we can go forward without raising taxes!
The righteous indignation is now taking the form of a demanding, “if you don’t think taxes should be raised – tell us what you will cut!” The logic is that our budget people are saying we’re going to be short as much as $4 Billion (a number up slightly from the $3 Billion that once was the expected amount of shortfall going into the 2011 Legislative Session). Playing in the background is the theme of how we are just so greedy and miserly that we won’t give to the state spenders the amount that we should be handing over. Their point of view seems to be that we exist to pay government taxes – anything else is simply not acceptable.
As part of the current Nevada budget process we start with a bias that whatever the amount paid in the current two-year budget cycle is (a) too little; and, (b) in need of an automatic increase. Paying attention to what we are getting for the money spent and determining a sense of priority in construction of a budget is just now starting to take shape . Even the Nevada Legislature is considering the idea of examining the spending issue (although we might want to see how this plays itself out to see whether the notion of coming up with a better spending plan isn’t something that’s just lip-service, without substance).
The question shouldn’t be about what we will cut – but should be on establishing the priorities for spending, making certain that the programs and services…that spending is considered as necessary…deliver the results that they should provide. Instead of fretting over what is going to be “cut” the attention is on building a spending plan from the ground up, arriving at an answer that deals with what is needed to finance the priorities we need to cover.
A year ago, Geoffrey Lawrence of the Nevada Policy Research Institute built a state budget with some of these principles, and came up with a budget proposal that didn’t require a tax increase to fund. Meanwhile the Nevada Legislature increased the amount of spending, raised taxes by a Billion and ended up having to come back in February of 2010 to play some more of their budget magic.
For those who will be challenged in the future to justify their perspective of not supporting tax increases, perhaps these considerations might offer an approach worthy of implementation. For those who are heck-bent on raising taxes to have to avoid the “cuts” they don’t want to do – the same approach is just as legitimate…although it might be more difficult to justify tax increases for the sake of tax increases.
On my Sunday morning trips to town I often catch up on the re-broadcast of the Nevada Newsmakers program. This past Sunday was no exception and I got to listen in to the grilling that Nevada Gubernatorial Candidate Mike Montandon took because of this point of view that Nevada’s taxes shouldn’t be raised. Based on the numbers that are being considered as the expectations for the coming legislature in 2011, what was once viewed as a troublesome opinion (not raising taxes) is now considered as being anti-Nevada. How dare anybody think that we can go forward without raising taxes!
The righteous indignation is now taking the form of a demanding, “if you don’t think taxes should be raised – tell us what you will cut!” The logic is that our budget people are saying we’re going to be short as much as $4 Billion (a number up slightly from the $3 Billion that once was the expected amount of shortfall going into the 2011 Legislative Session). Playing in the background is the theme of how we are just so greedy and miserly that we won’t give to the state spenders the amount that we should be handing over. Their point of view seems to be that we exist to pay government taxes – anything else is simply not acceptable.
As part of the current Nevada budget process we start with a bias that whatever the amount paid in the current two-year budget cycle is (a) too little; and, (b) in need of an automatic increase. Paying attention to what we are getting for the money spent and determining a sense of priority in construction of a budget is just now starting to take shape . Even the Nevada Legislature is considering the idea of examining the spending issue (although we might want to see how this plays itself out to see whether the notion of coming up with a better spending plan isn’t something that’s just lip-service, without substance).
The question shouldn’t be about what we will cut – but should be on establishing the priorities for spending, making certain that the programs and services…that spending is considered as necessary…deliver the results that they should provide. Instead of fretting over what is going to be “cut” the attention is on building a spending plan from the ground up, arriving at an answer that deals with what is needed to finance the priorities we need to cover.
A year ago, Geoffrey Lawrence of the Nevada Policy Research Institute built a state budget with some of these principles, and came up with a budget proposal that didn’t require a tax increase to fund. Meanwhile the Nevada Legislature increased the amount of spending, raised taxes by a Billion and ended up having to come back in February of 2010 to play some more of their budget magic.
For those who will be challenged in the future to justify their perspective of not supporting tax increases, perhaps these considerations might offer an approach worthy of implementation. For those who are heck-bent on raising taxes to have to avoid the “cuts” they don’t want to do – the same approach is just as legitimate…although it might be more difficult to justify tax increases for the sake of tax increases.
Posted by Doug Busselman at 5/3/2010 3:56 AM 
Categories: Nevada Budget
Tags: Nevada Budget State Spending Taxes 2010 Election Government
Categories: Nevada Budget
Tags: Nevada Budget State Spending Taxes 2010 Election Government
This issue has a lot to do with why Nevada taxpayers should be much more interested in the Board of Regents race than they have been in the past. Together with K-12, higher education accounts for around 35-40% of the general fund budget spending. This is not to say that both aren't of potentially great value and worth our tax dollars.
However, if we subscribe to the position that we need to address our budget crisis by "establishing the priorities for spending, making certain that the programs and services…that spending is considered as necessary deliver the results that they should provide," then those making spending decisions at the university and college system have a significant responsibility to the taxpayers of Nevada.
I am running for regent because I reject the position that the answer to the system's funding problem is to seek more money from the taxpayers. Both of my opponents have adopted this position despite the projected 3 to 4 billion dollar shortfall next year. Requesting more money in such a climate comes down to advocating for massive tax increases. In fact, to simply keep pace with past spending the legislature would need to increase taxes more than $1000 per year per adult Nevadan. If the Regents are asking for increased spending, then they are asking for tax increases ion excess of $3 billion.
Every State agency must prioritize spending by understanding its mission and then making some tough decisions. This includes the Nevada System of Higher Education and the Regents that run it.
With respect to higher education I believe that prioritizing begins with programs that support the State's core competencies and competitive advantages. Thereafter, we must ensure an adequately educated workforce in critical services and growth industries. This means funding applied research that can be used by farmers and ranchers today, as opposed to high level research with general application across the world.
Land Grant School + Nevada taxpayer dollars = research that benefits Nevadans.
Another area where we can prioritize is to ask what value does Nevada get from a particular program or degree offering. A good example are non-terminal degrees being offered where no Nevada university or college offers the related terminal degree. Such a practice simply leads to Nevadans subsidizing 5-6 years of education for a student who will only be employable in that field if they continue their education outside of the state.
There are many other areas in which we will need to prioritize the budget of the Nevada System of Higher Education if we hope to maintain access for rural Nevadans, as well as maintain value for Nevada taxpayers.
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