Editorial: Give state revenue windfall back to those who created it

State workers demand higher pay raises. (R-J pix)

Riddle: What is the difference between the Nevada Legislature and a drunken sailor?

Answer: Eventually the drunken sailor sobers up.

The Economic Forum, which is tasked with estimating state general fund revenues so lawmakers can dodge blame for overestimating, has found a few million more coins in between the couch cushions — $96 million more in the coming biennium and a $44 million surplus from the current year for a total of $140 million. So immediately the governor and lawmakers on both sides of the aisle started calculating just how they could spend it. The added funds hike the general fund budget to $8.2 billion over the next two years.

Not one person suggested letting the taxpayers keep some of that windfall to blow on groceries and new shoes for their children.

Gov. Brian Sandoval wants to spend the windfall on education. “I introduced the weighted student funding formula last session, and this additional money provides a unique opportunity to invest directly in students who are economically disadvantaged, English learners, gifted and talented and in special education,” he was quoted by the press as saying.

For all the good that has done over the years. Over the past four decades, according to a Cato Institute analysis, Nevada has increased K-12 public school funding by 80 percent per pupil, adjusted for inflation. During those four decades student test scores have actually fallen slightly.

Democratic Assembly Speaker Jason Frierson and Democratic Senate Majority Leader Aaron Ford said in a joint statement, “While these newly projected revenues will not be enough to fully meet our needs in public education, mental health, job training, and other vital services, we are committed to putting our tax dollars to work for the hardworking Nevadans who still feel left behind.”

How about some concern for the hardworking taxpayers who keep paying more and getting no recognizable return on their investment?

A few days later several dozen state government workers rallied near the legislative building demanding that the $140 million windfall be used to give them higher pay raises. Though the governor has included 2 percent raises in each of the next two years, the workers were demanding 5 percent each year, complaining that wages are so low many state government employees are on public assistance programs. They complained about how workers’ pay was reduced by furloughs during the recession, failing to note that they were paid the same rate of pay for the time they did work.

They also did not talk about how their pay compares to those in the private sector. According to census data maintained by the Department of Employment, Training and Rehabilitation, the weekly wage of a Nevada state government worker in the third quarter of 2016 was $1,093 a week, compared to $922 for a private sector worker in Nevada. Also, the state worker’s pay has increased 21.7 precent since 2012, compared to an increase of 13.1 percent for the private sector.

To add insult to injury, we note that the windfall-inflated $8.2 billion general fund budget is a 12.3 percent increase over the previous biennium’s $7.3 billion spending, while inflation in the past two years amounted to 2.5 percent. And the general fund is only about a third of the total state spending.

Since 2011 the state general fund budget has grown by 32.3 percent, while inflation amounted to 7.9 percent. Since 2001 that budget has grown by 122 percent, compared to 37.5 percent growth in the cost of living.

Meanwhile, the Economic Forum forecasts that the commerce tax passed in 2015 at the urging of Gov. Sandoval will raise less than $200 million in each of the coming years — less the millions the state is spending to create what is basically a Nevada version of the Internal Revenue Service.

The commerce tax is a tax on gross receipts on all businesses grossing more than $4 million a year. It has different tax tables for 27 different industries — ranging from a low of 0.056 percent for mining to a high of 0.362 percent for rail transportation — and there are 67 different tax brackets.

It is costing businesses in the state untold millions to comply with all the paperwork needed to enforce and collect the tax.

Take that $140 million windfall, add a few nips and tucks in the budget, then repeal the commerce tax. That’s the sober thing to do.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

 

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15 comments on “Editorial: Give state revenue windfall back to those who created it

  1. Bruce Feher says:

    Have you been at the weed again Tom? You know that will NEVER happen!

  2. I know, but someone has to play the role of Jeremiah.

  3. John L. Smith says:

    Of course, some might argue that families raising their kids in a city afflicted with social maladies associated with the casino industry should receive more, not less. I think the state’s early leaders understood the impact of casino culture better than we do today.

  4. Rincon says:

    It appears that Nevadans pay less in taxes than citizens of most other states:

    State State funds Federal funds Total spending Population Per capita spending
    Nevada $6,929 $3,897 $10,826 2,890,845 $3,744.93
    California $158,996 $93,554 $252,550 39,144,818 $6,451.68
    Oregon $22,091 $11,302 $33,393 4,028,977 $8,288.21
    Washington $26,670 $10,975 $37,645 7,170,351 $5,250.09
    https://ballotpedia.org/Nevada_state_budget_and_finances

    From the same article: According to a report released in September 2015 by the nonprofit Truth in Accounting (TIA), Nevada ranked 18th best in the country in “taxpayer burden.”

    Curiously, according to the admittedly subjective US News Best States Rankings, Nevada comes out #40, Washington is #5, Oregon is #19, and California is #23. https://www.usnews.com/news/best-states/rankings And they all managed to outrank Nevada despite their profligate spending. Imagine that!

  5. Barbara says:

    I believe it was Jeremy Aguero who testified before the legislature when they were considering passing the anit-Commerce tax that one consequence of such a tax would be that consumers would see their insurance rates increase. According to the Nevada Department of Insurance website, the following companies were approved for auto rate increases in 2016 and 2017:

    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Private Passenger Auto 361,795 policy holders, 13.6 percent increase approved for 06-05-2017
    Personal Auto Combo 323,245 policy holders, 7.3 increase approved on 06-13-2016

    ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY Private Passenger Auto 62,112 policy holders, 9 percent increase approved for 05-15-2017
    ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY Private Passenger Auto 64,568 policy holders, 12 percent increase approved on 04-11-2016

    MID-CENTURY INSURANCE COMPANY (FARMERS INSURANCE COMPANY) Private Passenger Auto 68,477 policy holders, 9.022 percent increase approved for 05-17-2017
    MID-CENTURY INSURANCE COMPANY Private Passenger Auto 84,285 policy holders, 8.741 percent increase approved on 05-17-2016

    Of course these rate increases have other contributing factors beside higher taxes, but Mr. Aguero seems to have been proven correct in his correlation that higher taxes generally trickle through the economy through higer consumer costs.

    I’m with Thomas. Return the surplus and repeal this anti Commerce tax. And while the legislature is at it, how about some tort reform. It seems Nevada’s rate of “attorney penetration” on auto accident claims is twice the national average rate.

    The everyday lives of people are not elevated by government spending. History teaches us that the standard of living is increased in communities that have economic freedom through limited regulation and taxation and the enforcement of personal property rights.

  6. deleted says:

    “The everyday lives of people are not elevated by government spending.”

    SMH

  7. Steve says:

    “The everyday lives of people are not elevated by government spending.”

    In many ways, “government spending” is more of a trap then it is “elevating people” out of poverty.

    Otherwise, that statement is pretty accurate. People are better able to reach their potential when unfettered by artificial restrictions inadvertently created by giving them stuff rather than them earning it on their own.

  8. Steve says:

    Yes!
    Patrick goes to comedy for reality!

    I knew it all along.

    Monty Python was great.
    Ever watch Jean Shepherd’s America? Even better.

  9. deleted says:

    sat·ire
    ˈsaˌtī(ə)r/
    noun
    the use of humor, irony, exaggeration, or ridicule to expose and criticize people’s stupidity or vices, particularly in the context of contemporary politics and other topical issues.
    synonyms: mockery, ridicule, derision, scorn, caricature; More
    a play, novel, film, or other work that uses satire.

  10. Steve says:

    So, no.
    you really have no idea what satire is.

    Had to look it up, no less.

  11. robertleebeers says:

    Some might argue that perhaps the parents should do more parenting and less playing themselves. I think that perhaps yesterday’s parents understood human nature better than we do today.

  12. robertleebeers says:

    It is interesting to see the comments. Those agreeing that the state should take even more than that also use the “how will we pay for…” cite any cut in taxes as if the flow of revenue to government can never be allowed to lessen. There is another way, and that is to reduce what government takes as well as loosen regulations, licensing and fees that choke off business growth and start-up, and then allow the monies increase come from growth of the foundation rather than the short-term tax model. State that have followed the former have always realized better revenues than those that have raised taxes beyond the ability of business to pay.

  13. deleted says:

    Bob, here’s a well written rebuttal to the baseless claim you, and so many other conservatives make about taxes, regulations, and yes even immigrants.

    All from that liberal bastion of “over regulation, socialist like taxes, and swarming hoards of illegal immigrants.

    Enjoy!

    https://www.bloomberg.com/view/articles/2017-05-10/california-leads-u-s-economy-away-from-trump

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