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OPINION: Controlling taxes means controlling spending

By ThisIsReno

by Geoffrey Lawrence – Nevada Policy Research Institute

As lawmakers head toward the 2011 regular legislative session, the state’s mounting fiscal challenges have induced many observers to question the feasibility of crafting a budget that does not include substantial increases in the state tax burden.

Yet, the context to this debate has been convoluted by frequent misrepresentations about Nevada’s status as a relatively low-tax state. A more accurate characterization is that Nevada is a relatively decentralized state.

On a per capita basis, total state and local tax revenues are above the national median. According to the Tax Foundation, Nevada ranks 25th in terms of per capita tax collections. The Tax Policy Center, sponsored jointly by the Urban Institute and the Brookings Institution, ranks Nevada even higher — 22nd, with almost $6,000 in per capita annual revenue.

Clearly, there is no lack of tax revenue in the Silver State, even if most revenues do go to local governments. This decentralization of services was a conscious decision made by state lawmakers who — this being a Dillon’s Rule state — have ultimate authority over the allocation of tax revenue. Due to the state’s far-flung population centers, decentralization has historically been seen as the most efficient method of delivering public services.

Understanding the true context of current debates over the next state budget is critical for lawmakers, who should make informed decisions.

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