A scary scenario in Carson City

Although Halloween has passed, the scariest costume in Carson City must still be Gov. Jim Gibbons' suit.

The governor started off the fall season by meeting with his Cabinet to discuss the expected shortfall of state revenue that might materialize as a result of lower-than-anticipated sales and gaming tax revenues.

We already know that revenue for the first two months of the two-year budget cycle is down about $21 million from projections.

Gibbons deserves credit for immediately asking his department heads to come up with contingency plans. Then again, planning for what could become a significant revenue shortfall is something we elect governors to do.

Ultimately, despite asking local and state government to identify ways to trim their budgets, and despite an in-house spreadsheet making across-the-board cuts, Gibbons will have to make the tough choices.

And that's where the scary part comes in.

Voters have sent to Carson City a leader who already believes the state is living beyond its means. Forget teacher salaries, nursing shortages, transportation construction delays and a foster care system that has killed our kids. Forget the 20 percent of Nevada residents without health insurance and forget the fact that a new study suggests four out of every 10 Nevada high schools are drop-out factories. Never mind that the state spends less per student than any other place in the nation.

None of that matters when the governor believes the solution must be to cut back even more.

Even the best fiscal analysts cannot accurately nail revenue projections 18 months out -- and in a state where so much revenue is susceptible to the whims of the national economy, the projections can be darn right tricky.

So if you're sitting in local government, Clark County to be precise, and the governor tells you to propose potential cuts, you're tempting economic fate.

The county and school district are already receiving less-than-anticipated revenue thanks to the state Department of Taxation's faulty "green" tax break, which enabled the largest casino companies to suddenly find their eco side. At the local level, the foreclosure ripples are reverberating in other parts of the economy. The city of Las Vegas, for example, has seen dwindling sales tax revenue.

Presumably such loss of real or expected revenue should already have local governments examining where they can cut corners. But if you go along when the governor also tells you he wants suggested budget reductions, it would appear you are admitting that you could withstand inevitable cuts. Gibbons has vowed not to raise taxes. So, if the doom scenario materializes, he could simply turn the suggested cuts into real ones.

If you're trying to fix a broken child welfare system, it appears less money or fewer staff are not good solutions. Up in Carson City, a cut identified by local government insulates you from any criticism.

Everyone will suggest politics plays no role in cuts. But it's clearly playing a huge role in the identification of companies that are eligible for the so-called green tax breaks. For instance, Democrats almost certainly balked at approving the list during a Legislative Commission meeting Tuesday because they were not pleased that top Republican Sheldon Adelson's company had made the cut.

But of course no one is playing politics with state revenue.

And Gibbons, whose staff has actually run even more significant cut scenarios, might just be the kind of leader who thinks it's better for his re-election chances if he reduces the budget beyond what is necessary.

Clearly the more cuts that are made, the more easily Gibbons will be able to claim less revenue is required. It's classic voodoo economics. Cut programs and shift the burden elsewhere.

If you cut social services, preventive care and monitoring can be replaced by emergency services paid for by local government. If you cut higher education, you force tuition and fee increases or possible delays in capital projects.

Not surprisingly, the governor has taken K-12 education off the list for potential budget cuts. It's clear he's still looking for that Education First mantle to stick.

This week, after being rebuffed by Clark County and university system Chancellor Jim Rogers, Gibbons announced he would hold a meeting with concerned individuals to discuss the budget situation. The usual legislative suspects have been invited, as have representatives of local government and the executive branch. After some initial hesitation, the governor's staff agreed the meeting should be open to the press.

Ultimately, Gibbons is going to have to address the state's financial health, whether it becomes a full-fledged crisis or not. Why would he call lawmakers into special session when he can simply get out the red pen?

And why lead real reform when a quick fix will do?

Contact Erin Neff at (702) 387-2906, or by e-mail at eneff@reviewjournal.com.