Editorial

RENO GAZETTE-JOURNAL

6/9/2002 09:07 pm

Nevada leaders must look at problems in a new way if they have any hope of dealing with a state budget crisis estimated between a few hundred thousand to a couple billion dollars in the next decade.

There is hardly a political or business leader to be found who will argue with the premise that the state’s economy is far too dependent on gaming and sales tax revenues, which account for three-quarters of the state budget. When tourism takes a hit, as we’ve seen since Sept. 11, the state is left scrambling for money.

Right now, unemployment is up, gaming revenue is down, there are more people needing government assistance for food, rent and health care, and the state has less money than anticipated to deal with the problems. Gov. Kenny Guinn expects to cut at least $50 million out of the current budget, with deeper cuts anticipated for the coming year since there is no sign that tax collections will rebound enough to make up for what’s already been lost.

At the same time, there is growing momentum for increasing funding to public schools and health care, and Nevada’s population continues to grow, requiring more government services be provided to an ever-increasing number of people. Even the Legislature, which is loathe to raise taxes, recognized the problem and created a task force that has spent the past year studying Nevada’s current tax structure and looking for ways to broaden the tax collections base beyond gaming and sales taxes.

Unfortunately, the discussion about the state’s economic health in the past year has been only about how we can rearrange the same budget blocks we’ve had for years and come up with a different outcome. Instead of thinking of new ways to bring revenue to the state, we’ve dug up the same old list of taxes, leaving the interest groups to fight it out in 2003 to see who gets stuck with the tab. And those groups already are making their case. The Nevada Mining Association is running TV ads that focus on a message that mining “has paid an awful lot of taxes,” president Russ Fields told the Las Vegas Sun.

What we should be talking about is how we can increase the wealth within the state, not just redistribute it. The solution to the problem of a tax base too narrow to support the fastest growing state in the nation is not to look around at who is here and can pay more taxes. No, we must look at how we can lure people here who will create wealth — new industries, jobs and income — to benefit both the state and its residents.