Snake Eyes

I was listening to NPR's All Things Considered on my drive home Wednesday and heard this story about Nevada's budget crisis.  NPR picked Nevada because it is the state that has been hardest hit by the current downturn.  Nevada is facing a triple whammy:  It had the most intense speculative housing bubble, its real estate culture was driven by more speculative debt than most states and its biggest industry--gaming--is extremely sensitive both to the overall economy and to gas prices.

NPR got Nevada Treasurer Kate Marshall on the phone to discuss the budget crises...only to find that there is no crisis.  It seems that the Governor called the legislature into special session as soon as it became obvious that the budget was out of balance and they cut 8% out of the current budget.  Nevada policy makers realize that they may have to cut more if the current crisis deepens, but they have taken care of the current shortfall.

An 8% cut in Arizona's budget would be and $800 million.  Arizona is two years into its budget collapse and the governor has made some noise about freezing current spending but actual cuts?  Zero. 

I guess in Nevada, they know how to play the hand they are dealt without whining about it.   

Comments

[todd]

Napolitano claims that she spoke with Bee and Weiers and the both said nothing would even get done until after the election even if a special session was called. Anyone heard a denial by Bee and Weiers about this?

[North Valley Republican]

Let's see. It's the same bunch of Democrats and liberal Republicans that passed Napolitano's budget last June. How much would they do now that is different from then? Until the voters throw out the head-bobbers that Napolitano controls, nothing will get done.

She wants to spend, not cut. She wants to be loved for giving, not cutting. She can't even agree on the potential short-fall in the budget, instead relying on the same false reports she used last year.

It's time for Napolitano to see we've been dealt a bad hand.

[Patrick]

The Governor has been vilified for balancing the budget here in Nevada (he’s also had some very public marriage problems, has a Playboy bunny for a best friend, and property tax issues, but for the most part those are highlighted to attack him for cutting the budget). There was the usual trickery, some fund sweeps, delaying payments, and draining the rainy day fund, but unlike Arizona there isn’t millions in borrowing we have millions in budget cuts.

Some, I won’t name who, or from which party, want to keep the good times going just like Napolitano did in Arizona.

Nevada assumed we would have a $3.5 billion general fund budget for FY 2009, when the numbers came in it looked like we would only collect $2.9.

Some here are wanting to raise taxes, including increasing the states business payroll tax, creating a gross receipts tax, raising gaming and room taxes, and increasing taxes on the mining industry to eliminate the shortfall. Not a good call considering Nevada has an unemployment rate that is projected to approach 8.6% by the end of 2009.

Here is some more information: http://npri.org/blog/why-is-nevada-short-on-cash

http://npri.org/publications/is-the-tax-structure-broken

http://npri.org/blog/pictures-are-worth-a-thousand-journalists

This last article only covers through FY 2008. Due to a very bad national economy and higher inflation, the FY 2009 data suggests that general fund revenue per capita may decrease even further…assuming the state demographers 3.4% population increase (2007-2008 increase was 2.6%).

[John]

Hey Todd: Please source your claim so that we can all read it. Your version differs from what I've heard, but if you've got an actual source, that would go a long way towards settling it. Thanks.

[JRM]

One less thing for you to complain about:

http://www.azcentral.com/news/articles/2008/10/09/20081009DEQsettlement.html

[Thane Eichenauer]

All start out by granting that Governor Napolitano is probably smarter than the average legislator but if last nights candidate forum with LD6 and LD10 legislative candidates present is any example, there is a decided lack of awareness of reality out there. Candidate Doug Quelland was the most in touch, responding to yet another "What can the legislature do to..." responded that there is Slim to Nothing that the legislature will be able to do (given the deficit) and that Slim has left the building.

[Sam]

Todd is an acronym - truth optional, deceptive Dem.

[todd]

Sorry I didn't have the link as I could not remember where I had read it but here is the story from the Capitol Times
http://www.azcapitoltimes.com/story.cfm?ID=9546

Sam - I will accept you apology for calling me a Dem and deceptive since I am neither. Thanks.

[Lee]

As the head of a small Arizona state agency I assure you that we took cuts in FY08 and in FY09 and are currently identifying where the next round of cuts will occur.