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Figures don’t lie, but budget doom-and-gloomers do


By Chuck Muth
November 11, 2010

Here’s a quick math question for you: What’s $6.4 billion minus $5.4 billion?

If you answered $1 billion you clearly don’t understand liberal math and should take a public school remedial course. Because the correct answer is: $3 billion.

For months now, the government’s projected overspending deficit in Nevada has been reported, ad nauseum, to be $3 billion. Indeed, that $3 billion figure has been repeated over and over and over again so often that it’s been accepted as fact without question by just about everyone.

Everyone except those right-wing, radical fiscal experts at the conservative Nevada Policy Research Institute (NPRI) think tank. They blew the whistle on the con several weeks ago. Here’s the real deal.

Budget director Andrew Clinger acknowledged this week that the current state budget, which ends next June 30, is $6.4 billion. And Nevada’s projected tax revenue for the following two-year cycle will be around $5.4 billion. The difference is primarily due to some $800 million in “temporary” tax hikes approved last year which are set to expire in June.

In addition, the state won’t be getting any more federal “stimulus” money – which never should have been used last year to avoid the necessary and long-overdue cuts to non-essential government operations, programs, personnel and services. By wasting the stimulus money, all the Legislature did was kick the can down the road, making this year’s overspending problem even worse.

In any event, take our current $6.4 billion budget and subtract $5.4 billion in projected tax revenues and you’re left with an overspending deficit of $1 billion. Not $3 billion. $1 billion.

So where the Joe Heck does the $3 billion figure come from? Sean Whaley of the Nevada News Bureau explains:

“Nevada state agencies and public education have submitted budgets calling for nearly $8 billion in spending for the upcoming two years; about $3 billion more than what is expected to be available with current tax revenues.”

That’s right. The so-called $3 billion overspending deficit figure is based on increasing the budget $1.5 billion over and above what is currently being spent!

That’s like saying you make $50,000 a year at your job – not getting the $2,000 raise you wanted, but instead a $2,000 pay cut – and then claiming your salary was reduced by $4,000.

The truth is Nevada is looking at a $1 billion overspending deficit which Gov.-elect Brian Sandoval insists he will close with spending cuts, not tax hikes. And even Democrat Senate Majority Leader Steven Horsford has admitted there’s $1.5 billion worth of cuts in the budget which could be made.

Which begs the question: Why aren’t legislators clamoring for $500 million worth of tax CUTS instead of $3 billion in tax HIKES?

Chuck Muth is president of Citizen Outreach, a non-profit public policy grassroots advocacy organization. He may be reached at [email protected].

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