Some sage proposals

As worse economic news piles on top of the bad -- declining passenger traffic at McCarran International Airport, declining visitor counts, declining gaming and sales tax collections -- one group of Nevadans is doing a lot more than just squeal about state budget cuts leading to Armageddon.

The Spending and Government Efficiency Commission forwarded its first batch of money-saving suggestions to Gov. Jim Gibbons last week, the result of a months-long review of agency procedures and performance. The tentative recommendations, if adopted by the governor and the Legislature, could save the state hundreds of millions of dollars over the next several years.

Considering Gov. Gibbons is preparing a two-year budget 14 percent below current spending levels, with further reductions possible, every savings opportunity counts.

Among the suggestions: closing a Washington, D.C., lobbying office; creating a new Department of Revenue to oversee all collection responsibilities now handled by the Taxation Department, the Department of Motor Vehicles and other agencies; and, of greatest promise, gutting the Public Works Board, which adds tens of millions of dollars in costs to every new public building with redundant reviews and meddlesome oversight.

Other ideas include privatizing the DMV's auto insurance verification program, having some state workers rent cars from private companies to reduce the state's motor pool, and -- gasp -- starting a pilot project for performance-based funding for some agencies.

These suggestions are a good start. But the SAGE Commission's work won't end here. Its members will continue to mine Nevada's bureaucracies for inefficiencies and savings opportunities.

In another three or four months, the panel will present its next round of recommendations in time for the start of the 2009 Legislature.

When that report comes out, the state's biggest cost-cutting opportunity of all should be atop the list: reforming the lavish retirement benefits promised to all state employees.

Nevada already has about $10 billion in unfunded pension and retirement health care liabilities, and only two ways to pay for them in the years ahead: budget cuts that will make this year's reductions seem like a razor burn, and tax increases that will dwarf the record hikes of 2003. Let's see lawmakers take either of those options to the voting public.

The SAGE Commission must recommend putting future public employees' benefits on par with those offered in the private sector: a defined-contribution retirement plan, similar to a 401(k), that requires state workers to set aside a portion of their own income to receive a modest, taxpayer-funded match; and health insurance that requires workers to pay a reasonable share of their own premiums, both during employment and in retirement.