E!! The True Conservative Story™

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Nevada’s most incorrigible tax hater, Chuck Muth, penned a pretty good one today.  Read it for yourself, but here’s a sum-up with a little E!! on the side:

The Silver State’s usual tax-and-spend suspects are crying a river over what amounts to a 10% budget cut (not 15%, not 22%, and not 34%, as has been reported by various hysterical persons who shall go unnamed).

Yes indeedy, 10% is the official figure that Andrew Clinger, the state’s official Budget Director, is officially using in his official correspondence with people.  According to Clinger, Gov. Gibbons’ proposed general fund budget this year “is $632.9 million smaller than last biennium,” a reduction of 9.3 percent. 

So why all the discrepancies, disparities, and dispepsia over huge budget cuts?  Let’s have a little history (and MATH) lesson and see:

2003:  The Legislature increased taxes by more than 3/4 of a billion dollars.  And there were no spending cuts.  Then-REPRESENTATIVE Jim Gibbons criticized then-Governor Kenny Guinn for not cutting 3/4 of a billion dollars from the budget rather than raising taxes. 

2005:  Wonder of wonders, Nevada had a budget surplus of about 3/4 of a billion dollars.  Gov. Guinn put some of the surplus into the Rainy Day Fund and rebated $300 million back to the taxpayers.  The general fund budget was around $6 billion.

2007:  Gov. Guinn is out; Gov. Gibbons is IN.  Gibbons SHOULD HAVE proposed a budget which included the 3/4 of a billion in cuts he’d suggested to Guinn back in 2003, which is to say he should have proposed a budget of around $5.5 billion (allowing for inflation and giving a little leeway and such).  But instead Gibbons suffered from sudden budget amnesia (SBA) and proposed about a billion dollars MORE in state spending.  So the Gibbons budget was nearly $7 billion.

2008:  Astonishingly enough, The Economic Forum projects actual revenues coming into the state coffers at around $5.5 billion.

SO, here we are, 2009:  Looking at the insufficient funds left over from 2007’s budget and faced with having to roll back spending to 2005 levels based on current state revenues.

AND the big-government gurus want the 2009 Legislature to spend NOT ONLY the $7 billion the government already can’t afford, but ANOTHER $1 billion on top of that!   Yes, it’s true:  the spendy spenders are demanding $8 billion in government spending while the state is only taking in $5.5 billion.

AND – here’s the big finish, folks! – the Spenders are calling any talk like the Talk I just talked (i.e. only spending what we are actually taking in), an “irresponsible $2.5 BILLION BUDGET CUT.”

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Any questions?!

Patrick Gibbons, a researcher-analyst at the Nevada Policy Research Institute (NPRI), has a new piece up.

It’s worth the read if you want to (1) understand where Nevada REALLY is with its budget issues, (2) be informed about the questions that remain unanswered, and (C) be reminded that when it comes to politics and money, the devil is always in the details.

Gibbons points out that depending on which newspaper, pundit or politician you believe, you might think Nevada has a budget shortfall of $5.6 billion, $4.5 billion, $2.5 billion, $1.2 billion – or no real shortfall at all. And so you might think we need to cut between 34% and 0% of the budget in order to cover the shortfall.

The questions are: Who is right, and what accounts for the differences in math? And how can the public (or our elected officials) have intelligent policy discussions if we can’t even agree on the basis basics?

In order to wade through it all, one first needs to understand that the General Fund (GF) is not the same as the total state budget. In fact, the GF makes up only 37.5% of the overall budget. The recommendation for the General Fund for the current biennium (FYI: we do our state budgets two years at a time, if you didn’t know that) was $5.8 billion, but the overall recommendation for the state budget was $18 billion.

The other thing to know (ask!) when talking about either the General Fund or the overall state budget is whether people are extrapolating their numbers from (1) the originally projected and appropriated sums or or the currently projected sums, and (2) ditto on the revenue.

Read the NPRI piece and see for yourself!

(And if you have any questions, submit them here and we’ll see if we can get Patrick to stop by and explain things.)