The real root of Nevada’s budget crisis is, paradoxically, the prosperity of the last decade. As the economy, fueled by artificially low-priced credit, grew white hot, tax revenue increased proportionately.
Now that the inevitable readjustment period has set in, those used to living high on the once fat government hog are claiming to be victims and demand the programs they have grown accustomed to remain unmodified. Cut spending? Unthinkable! We must raise taxes!
So, the wolves look for some sheep to eat.
When you compare the revenue and size of, say, the Sparks Tribune between 2001 and 2010, you will see some major adjustments have occurred — all belt tightening.
In the construction industry everything has ground to a halt. Public and private work is nearly nonexistent compared to only three or four years ago.
Businesses of all types have seen serious slumps in sales and volume. Mom and pop operations, the small entrepreneurs, are downsizing, even closing up shop completely.
Big businesses have had major layoffs, dropped plans for future expansion, trimmed out top-level administrators and laid off workers.
The casino industry, no longer a Nevada monopoly, faced the growth of Indian casinos even before the bottom fell out of the economy. The drop in tourism and spending has sent even the once considered “recession proof” Las Vegas into a tailspin.
Everyone I know has been forced to readjust in every respect. Income, work opportunities, investments, house payments and rents, are all adjusting ever downward.
Nevada has been especially hard hit. Housing and construction were our bread and butter, thanks to just about everyone and anyone qualifying for a housing loan. With so many houses still on the market, a glut that will take years to absorb, real estate and “flipping houses” are poor investments. Housing values have plunged, and property taxes will decline proportionately.
Yet some in state government, led by the teachers union, act as though it is still 2005. Spending cuts and downsizing are regarded as criminal. Programs of all types, with budgets and habits still based on the boom years, are now seen as “indispensable.” Trimming to re-shape their programs to reflect the new economic reality is bitterly fought, with children being used as public pawns. Anyone daring to challenge the teachers union and their stooges are taunted as being “against the children.”
The traditional cash cows for state government, casino taxes and sales taxes, are down — way down. The painful changes the private sector and local governments have been going through are being bitterly fought right now by state government workers. The special legislative session, with most prominent positions held by people with clear conflicts of interest including membership in the teachers union, is raging as I write this on Saturday morning.
No matter how you slice it, spending rose dramatically in the decade of 2001-2010. General fund revenue increased from $1.8 billion to $3.6 billion — a 100 percent increase. Total state spending skyrocketed by 76 percent, from $5.4 billion to $9.5 billion.
Governor Jim Gibbons and his conservative allies are right — it is time for the state to do some belt tightening, too.
Ira Hansen is a lifelong resident of Sparks and owner of Ira Hansen and Sons Plumbing. You can reach him at email@example.com.