Nevada State of the Distress
Maybe you don't think about Nevada much. I do, because I live here, and because I'm paid by the state. I'm an administrator at UNLV. My thoughts and concerns about Nevada are therefore very personal, and to some degree selfish.
If you're one of those people who don't think about Nevada much, you may not know that we are currently facing a budget crisis of enormous implications. To say that we, as a state and as a community, face devastation is very likely not hyperbole.
Shit is getting real.
Clark County Nevada, where I live, has the fifth largest school district in the nation as of 2005, and it's done nothing but grow since then. Nevada has no income tax and the majority of its revenue comes from two sources; gaming and property tax. Nevada's two biggest industries in the last 30 years has been tourism and construction. Both of those have been dramatically impacted by the recession in a vicious cycle.
Tourists don't come to Las Vegas as much, so casinos cut back construction and services, which reduces jobs. People loose their jobs, and so they leave the state. Gaming is down and the the housing market is gutted so revenue is dramatically decreased. So casinos cut services and reduce rates, which reduces jobs, so people loose their house and leave the state, so property taxes aren't collected, etc.
Here are a few choice quotes from the article that demonstrate the impact of the problem.
Most analysts believe that Nevada is facing a shortfall of about $3.4 billion for the coming two-year budget cycle-meaning it does not have the revenues to fund about 50 percent of its current obligations.
The Silver State is constitutionally required to balance its budget and prohibited from imposing a state income tax; it does not have a stable, across-the-board business tax
In 2007, when Nevada was still flush, it had a $127.2 billion GDP; of that, total state expenditures (general fund spending plus miscellaneous other expenditures) came to $8.2 billion, a mere 6.4 percent of state GDP.
Nevada ranked fiftieth in the country when it came to the percentage of GDP spent by the state. It also ranked dead last for the number of state employees per 1,000 residents.
without new taxes Nevada's decision-makers could eliminate all spending not related to education or health and human services-including all funding for police, prisons, highway patrol and the like-and still be left with a budget deficit.
The Retail Association of Nevada recently estimated that Nevadans have cumulatively lost $25.4 billion in income since 2008, translating into a staggering $9,800 per resident.
tl;dr?
NV income is primarily sourced from gaming/tourism and property tax. The recession has crushed both of these. NV unemployment is among highest in nation. Projected budget deficit is about 50%, or $3+ billion. NV has specific constitutional requirements for both a balanced budget and funding for education as well as prohibits income tax. NV has the leanest and smallest state government in the nation. No additional cuts are feasible. In fact, cutting EVERYTHING except education and health and human services, would not balance the budget. Without new revenue streams, the constitutional demands can no longer be satisfied.
For the record, I would vote for a state income tax. That'll never happen though, so I'll most likely have to move to another state before my son gets old enough to attend school.
If you're one of those people who don't think about Nevada much, you may not know that we are currently facing a budget crisis of enormous implications. To say that we, as a state and as a community, face devastation is very likely not hyperbole.
Shit is getting real.
Clark County Nevada, where I live, has the fifth largest school district in the nation as of 2005, and it's done nothing but grow since then. Nevada has no income tax and the majority of its revenue comes from two sources; gaming and property tax. Nevada's two biggest industries in the last 30 years has been tourism and construction. Both of those have been dramatically impacted by the recession in a vicious cycle.
Tourists don't come to Las Vegas as much, so casinos cut back construction and services, which reduces jobs. People loose their jobs, and so they leave the state. Gaming is down and the the housing market is gutted so revenue is dramatically decreased. So casinos cut services and reduce rates, which reduces jobs, so people loose their house and leave the state, so property taxes aren't collected, etc.
Here are a few choice quotes from the article that demonstrate the impact of the problem.
Most analysts believe that Nevada is facing a shortfall of about $3.4 billion for the coming two-year budget cycle-meaning it does not have the revenues to fund about 50 percent of its current obligations.
The Silver State is constitutionally required to balance its budget and prohibited from imposing a state income tax; it does not have a stable, across-the-board business tax
In 2007, when Nevada was still flush, it had a $127.2 billion GDP; of that, total state expenditures (general fund spending plus miscellaneous other expenditures) came to $8.2 billion, a mere 6.4 percent of state GDP.
Nevada ranked fiftieth in the country when it came to the percentage of GDP spent by the state. It also ranked dead last for the number of state employees per 1,000 residents.
without new taxes Nevada's decision-makers could eliminate all spending not related to education or health and human services-including all funding for police, prisons, highway patrol and the like-and still be left with a budget deficit.
The Retail Association of Nevada recently estimated that Nevadans have cumulatively lost $25.4 billion in income since 2008, translating into a staggering $9,800 per resident.
tl;dr?
NV income is primarily sourced from gaming/tourism and property tax. The recession has crushed both of these. NV unemployment is among highest in nation. Projected budget deficit is about 50%, or $3+ billion. NV has specific constitutional requirements for both a balanced budget and funding for education as well as prohibits income tax. NV has the leanest and smallest state government in the nation. No additional cuts are feasible. In fact, cutting EVERYTHING except education and health and human services, would not balance the budget. Without new revenue streams, the constitutional demands can no longer be satisfied.
For the record, I would vote for a state income tax. That'll never happen though, so I'll most likely have to move to another state before my son gets old enough to attend school.