The members of the Nevada Economic Forum met earlier this month and came up with a forecast for how much the total state general fund revenues will be for the next two years.
The Economic Forum was created by lawmakers in 1993. It is responsible for providing forecasts of revenues for each upcoming biennial budget period. The figures are binding on the governor and the Legislature in crafting a budget, so they don’t wildly overestimate potential revenue and cause a budget crisis when funds come up short.
The forum members reported that the past two-year’s revenues turned out to be $8.244 billion and the coming two-year period should generate 7.2 percent more funds or $8.835 billion, after application of all applicable tax credits, of which there are a number.
Outgoing Republican Gov. Brain Sandoval has already drafted a budget for the next biennium, which will be handed over to incoming Democratic Gov. Steve Sisolak and the majority Democratic lawmakers, who take office in January. Of course, they all appear to anticipate spending every last dime of that $591 million windfall even though current inflation is running only 2.5 percent.
Much of the anticipated money is being targeted for expanded Medicaid under ObamaCare and various education spending schemes.
After the Economic Forum issued its forecast, Sisolak gave a statement to the press saying, “I am encouraged by how the state is performing. I look forward to reviewing the final forecast released by the Economic Forum and creating a roadmap to implement the priorities that matter to Nevadans. I am committed to building a bright future for our state and that starts with building a budget that funds the initiatives that will get us there.”
May we be so brazen as to suggest that taxpayers might appreciate an “initiative” that lets them keep a bit more of their paychecks. Or at the very least pour more of that anticipated-but-not-guaranteed revenue into the rainy day savings account for that time in the future when the outlook is not so rosy, because everyone knows that once government spends a certain amount of money it expects to continue to do so in perpetuity.
For the record, from 2011 to 2017 the state general fund budget grew by 32.3 percent, while inflation amounted to 7.9 percent.
Though we know we are whistling in the Democratic wind, we also suggest that the burdensome commerce tax passed in 2015 as part of Sandoval’s $1.5 billion tax hike be repealed. The tax was imposed even though the voters in November 2014 rejected a commerce tax at the ballot box by 79 percent to 21 percent. The commerce tax is expected to generate only $445 million in the coming biennium and could be covered by that extra $591 million in the projection.
Every Nevada business must file a commerce tax form with the state, even if the business owes no tax. For many, compliance costs exceed the taxes owed. That is a hidden tax on the state economy and retards job growth.
Lawmakers should think about the burden on taxpayers as well as the beneficiaries of their customarily spendthrift ways. — TM