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Experts: Lawmakers have 'significant' gap to close to solve budget crisis
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John Gurzinski/Las Vegas Review-Journal
Economic and tax experts talk about Nevada's budget during videotaping of an Impact Nevada program at Channel 8 studios on Friday. From left to right are Nevada Economic Forum members John Restrepo and Michael Alastuey, host Gary Wadell, the Nevada Taxpayers Association's Carol Vilardo, and UNLV economics professor Allen Schlottman. » Buy this photo
LAS VEGAS REVIEW-JOURNAL
Updated: Jan. 25, 2011 | 11:18 a.m.
Editor's note: Impact Nevada is a collaboration of the Las Vegas Review-Journal, 8NewsNow and Vegas PBS. It is dedicated to providing information on issues critical to Nevadans. The goal is to give a voice to the public by soliciting their opinions, presenting them to elected officials and holding officials accountable.
There's no quick or easy fix. Or so said four leading economic and tax experts ahead of Monday's release of Gov. Brian Sandoval's budget.
John Restrepo, chairman of the Nevada Economic Forum that determines how much revenue will be available for the state to spend, said Friday that the only silver lining to the fiscal crisis is it's forcing policymakers to examine how government does business.
"A sense of realism has set in," Restrepo said. "We've put away the pompoms."
Restrepo's colleague Michael Alastuey, vice chairman of the forum, agreed that anyone hoping an economic recovery will boost revenues enough to balance the budget without sacrifice is dreaming.
"The gap can't really be closed by any economic recovery," Alastuey said. "The gap to close is significant."
Carole Vilardo, head of the Nevada Taxpayers Association, isn't a fan of new taxes, but even she said it's going to be tough to pay for education and state government without raising or imposing fresh levies -- something Sandoval has pledged not to do.
"Nothing is ever impossible," Vilardo added, however, saying it can be done.
Alan Schlottman, an economics professor at the University of Nevada, Las Vegas, said the problem is the state remains in deep trouble with a record high jobless rate of 14.5 percent in December and continuing home foreclosures. As a result, people don't have as much money to spend, which means sales and property tax collections aren't coming in as before.
"The state may get really slammed" by more foreclosures, Schlottman said.
Despite the doom and gloom, most experts believe Nevada has hit bottom and is ready for the steep climb back -- if businesses regain enough confidence to start hiring again with nearly 200,000 Nevadans looking for jobs.
"The first step to break the cycle is to get people back to work," Vilardo said.
The four experts appeared together to discuss the state budget crisis on the first "Impact Nevada" television program.
The initial broadcast of the Impact Nevada panel discussion aired at 9:30 p.m. Friday on Channel 10, the Vegas PBS station. The program will be rebroadcast today on Channel 10 at 1 a.m., 7:30 a.m., 1:30 p.m. and 7:30 p.m. On Sunday, it will be rebroadcast at 9 a.m. on Channel 8, and on Monday at 7 p.m. on Channel 10.
After the Nevada Legislature starts Feb. 7, "Impact Nevada" will air weekly on Fridays and Saturdays on Channel 10. Future Sunday broadcasts on Channel 8 will be at a regularly scheduled time of 5:30 p.m. Journalists from the Review-Journal, Channel 8 and Vegas PBS will participate in the weekly program.
Late last year, the media collaboration sponsored a statewide public opinion poll on government services and how to pay for them. Results of the poll, and related news reports, are posted on impactnevada.com.
During Friday's Impact Nevada taping, the panel focused on Sandoval's scheduled Monday release of his proposed $5.3 billion, two-year spending plan and his State of the State address to legislators in Carson City.
The current two-year budget is $6.4 billion. So, without raising taxes, Sandoval must find ways to save at least $1.1 billion through a combination of cutting budgets, reducing salaries, trimming services and consolidating agencies.
Sandoval's budget is built on the Nevada Economic Forum's projection of $5.3 billion in expected revenues for fiscal years 2011-13. The five-member forum will meet again May 2 to determine a final projection based on updated tax and fee collections. That figure will launch the end-game budget bargaining between lawmakers and Sandoval.
Forum leaders Restrepo and Alastuey said revenue projections aren't likely to increase much if at all since there are only the beginning signs of recovery and Nevada's visitor-dependent economy may lag in coming back to life.
"There's no instant fix," Restrepo said.
Vilardo predicted legislators, led by Democratic leaders in the Senate and Assembly, would try to pass a tax hike or keep some taxes from expiring in order to preserve more services and fully fund education. Higher education is likely to bear the brunt of any cuts while kindergarten through 12th grade schools might not suffer as much, she predicted.
Professor Schlottman said there's a lot of talk about imposing a new tax on services, while simultaneously decreasing the sales tax of about 6.75 percent on goods, which would give some people a tax cut while broadening the tax base.
The experts suggested public employees would be targeted for cuts because their jobs, salaries and benefits have largely been protected during three years of recession while the private sector has suffered. Teachers, meanwhile, probably will face changes that could result in less union protection for veterans and more accountability in exchange for performance-based merit pay.
"Eighty-four percent of the budget goes to payroll," Alastuey said, noting teacher pay is based on years of service and level of education, which rewards older teachers but not better ones. "Neither of these two by itself is a driver of student achievement."
Contact Laura Myers at lmyers@reviewjournal.com or 702-387-2919.
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Nevada needs to attract major corporations to diversity its industrial base. It is far more important for these companies to know that Nevada universities and colleges are top notch academic institutions turning out real scholars, valuable research and contributing well educated citizens for our state. They are not interested in hearing UNR Wolf pack fans or UNLV Rebel fans shouting, ”We’re number one!, We’re Number one!” We don’t need our universities and colleges to remain as minor league training grounds for professional sports teams who contribute nothing directly to financially benefit our state’s economy. How many true, top level, financially profitable sports teams have made it big in Nevada? At the very best, very few are successful at the minimal range. They contribute little more than entertainment but nothing of substantial financial value to Nevadans as a whole. It is time to think academics and not sports. Invest in academic education of high quality and that will ensure Nevada of a bright future far more so than thinking athletics at the university level. For those mental midget pro sports fanatics get over it! You want big time sports? Watch it on TV every day of the year, 24/7 until your eyes go blind and your mind is real total blank. UNR and UNLV will never be a big time athletic draws, ever!
Let's get something straight about unions. I am no fan of unions, but let's not forget why they exist. Workers were treated like dirt. There was slave labor where men, women and children were forced to work under terrible and unsafe conditions for as many hours that businesses wanted them to work. Laws were put into place only because of union representation. These laws protected not only union workers but also nonunion workers. If you are naive enough to believe that employers would not go back to their slave labor ways then just look at Communist China. One of the reasons that goods are made so cheaply there is because people are forced to work in deplorable conditions. Now am I saying unions can do no wrong? Absolutely not! Many of them have become too powerful and corrupt. The answer is to not get rid of them, but to limit their power. They are a necessary evil because without them people would have no representation and before you know it workers would have as many rights as workers in China.
Note:
Just wanted to say I am sorry. The last sentence in my previous statement from quote. "I was suppossed to say Unionized employees are NOT running anywhere!" To many cervezas!
four leading economic and tax experts
Not a small government voice in the bunch.
Government doesn't exist to serve the people. Government's first interest is it's own survival, and this means extorting as much private property from the citizenry for themselves as possible. Time to put down the foot hard, and heavy on these extortionists, most of whom have never worked a day in the private sector in their lives. They've never had to worry about economic downswings like ordinary people, their bloated salaries, and perks are guaranteed. 1) Man created the Constitution. 2) The Constitution created government. 3) The government created the public servant. Notice how this has been gradually reversed over the past 80 years.
Why is it always the taxpayers that are made to bear the "sacrifices"? Rule One: Never increase taxes in a recession. Seeing that Nevada government employees make 27% more than their counterparts across the nation, it MUST be Nevada's public servants who must make the sacrifices this round.
On a side note: No wonder why road construction takes years on end in Clark County. A whopping 84% of taxes collected go towards salaries, pensions, and benefits for government workers. Not much left over to purchase concrete, and steel. Pathetic! This entire state needs a fiscal overhaul.
Cut, Cut, Cut! The budget problem is easy to solve, no money, no services. Take each agency and cut their budget. Hell, cut education, cut prisons (send OJ back to FL). Cut the fire department, cut the police department, cut all departments. If a service is truly necessary, people will complain and some services can be bought back. Cut, Cut, Cut! God Bless Nevaduh! Problem solved!
Currently, California has a deficit of $25.4 billion and Illinois $15 billion and Nevada $1.5 billion The following writer believes that States have the right to file bankruptch
Quotes from: The Weekly Standard by David Skeel:
"When the possibility is mentioned of creating a new chapter for states in U. S. bankruptcy law (Chap. 8)....most people have 2 reactions. First, that bankruptcy might be a great solution for exploding state debt; and second, that it can't possibly be constituional for Congress to enact such a law. Surprisingly enough, this reaction is exactly backwards.....The real question is whether the benefits would be large enough to justify congressional action. The short answer is yes.....at least if we want to have any chance of avoiding massive federal bailouts of state governments"..."California's most important creditors are its bondholders and its Unionized public employees. The bond market wouldn't be happy.....of the possiblility of a default. And bondholders can't pull their funding......As for California's public employees.......they will be running anywhere."
No worry...economic COLLAPSE this Spring will force the issue!! Oath BREAKING on an epic scale will happen in the mean time!!
Our military, law enforcement, and ELECTED OFFICIALS need to HONOR THEIR OATH TO THE U.S.CONSTITUTION!!!
oathkeepers.org
What about recalling Harry Reid? If it only takes 33%...Let's do that and leave the office open. This state doesn't seem to get any better with him and now he is doing the payback thing (his son and Ms. Titus lost) to the Governor.
After his ouster and denial of retirement and medical for failure to perform, as police and firefighters face every day, reduce government assistance programs by 10% across the board. Wit Harry out of the way, there won't be any voting entanglements to worry about.
The secondary message will be sent to the American people that Nevada has had enough of these politicians and even the Senate Majority Leader must answer to the people. Harry has an assistant who needs to either get to work or start looking for a job as well. RECALL HARRY REID!!!