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November 6, 2010 / jimnv

Budget Co-operation Is Expected Next Year

I found an interesting article on the “Write On Nevada” blog and it is accurate and worth reading and it got me thinking again about the deficits and the budget.

The deficit must be addressed by the governor in his budget proposal next year and I expect him to honestly confront it directly unlike Gibbons who just threw out his executive budget and walked away. That was dishonest and incompetent. I also remind the new governor that just saying “No new taxes” is not effective management. Don’t be a “Sandogibbons” as some expect him to be.

Here is the situation for state employees:

To keep things like they were in 2007, there has to be budget cuts and/or more taxes. Sandoval says no new taxes, so he won’t propose any and he will probably propose letting the 2009 tax increases expire in July 2011. If he does, state employees need to expect this in the budget proposal:

No pay increases for at least two more years with a possible across the board pay cuts, in addition to furloughs.

Some agencies will be consolidated or privatized with probable layoffs.

The proposed cuts to health and other benefits will be implemented to pay for program deficits of about $110 million starting July 2011 so there will be very high deductibles and premiums. Refer to my earlier post: “Major Changes to the Health Plan“, August 6, 2010. You can also check PEBP for more timely information.

There will be cross-the-board agency cuts of at least 10 percent with possible layoffs.

The Economic Forum’s projections will be bleak, and, even if they show a meager increase from the last biennium, the Legislature must not set up the budget to spend unexpected revenue like they have in the past. This tactic automatically grows the government and that is bad fiscal management and dishonest.

We can argue the budget numbers but most importantly we need to argue about Nevada’s revenue streams (taxes) versus expenses and create a budget that is not subject to boom and bust cycles, which harm everyone and is counterproductive.  The current legislative budget process does not work and the blame rests with the Legislature. Each legislator must do set aside hyper-politics and get the job done.

The Legislature must be realistic and not expect future revenues to materialize to pay for government programs we want or need, unless  it is willing back a tax increase that is veto-proof which is unlikely. All branches must not expect more money when revenues are  good so  fiscal self-discipline is required. Finally, there must also be some genuine cooperation within the Legislature to correct the budget monster it created and nurtured in the past 25 years or so.

Again honesty and cooperation are the key-words for the next legislative session.

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See my earlier post about this:  “The Duck Billed Platypus and Frankenstein’s Monster“, Match 1, 2009

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