Bleak future?: Doomsday report lays groundwork for tax hikes


There's a great deal of economic expertise in this valley, and within its ranks there's a great deal of disagreement on just what the future holds for recession-weary Southern Nevada. There's a reason the word "uncertainty" is so popular these days.

But the folks at UNLV's Brookings Mountain West, a think tank dedicated to regional issues, state definitively in their latest report, "Structurally Unbalanced," that Nevada's economic woes will last through the decade.

True, nobody would pay any attention to a report titled "We Just Don't Know: The Unpredictable Future." But does the Brookings eye-catching doom and gloom mean we should board the windows and pack up the U-Haul?

In fact, Brookings' recommendations for avoiding 10 more years of hardship give the whole thing away. Focusing almost exclusively on the plight of the public sector, Brookings says Nevada can tax its way to a better future through new, higher and restructured levies that deliver consistent revenues regardless of economic fluctuations -- but only if uneducated voters unlock the handcuffs they put on big-spending lawmakers through constitutional amendments. Over the years, the electorate has banned income taxes and required two-thirds support in the Legislature for tax increases.

"Budget gaps cannot responsibly be closed with only spending reductions," the report says, suggesting new state taxes on services and gross receipts, as well as some form of home rule to let local governments raise their taxes, too.

In a state with the nation's highest unemployment rate, pulling billions more dollars out of the private sector to maintain public-sector payrolls is supposed to assure prosperity? Lawmakers would be acting "responsibly" by raising taxes and preserving unsustainable spending, even though Brookings predicts "job growth will likely remain anemic while unemployment rates will remain stubbornly high"?

And as for the institute's assertion that tax collections can be made immune from the effects of recession, well, it's time to burst that myth once and for all. It's simply not possible -- unless lawmakers decide to impose a flat "head tax" on citizens. Good luck with that.

The Brookings report is absolutely right in one regard: Nevada's governments, along with the governments of neighbors Arizona and California, are indeed in a fiscal crisis. But it's a crisis largely of their own making, from growing government services far faster than inflation and population growth over previous decades, from providing too-generous salary and benefit increases to public employees and creating huge unfunded pension liabilities.

Nobody knows what the future holds. But we're willing to bet that newer and higher taxes won't lead to lower unemployment, won't create jobs and certainly won't stop public officials from demanding ever-larger sums of our money.

 

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