Governor should stand firm

By statute, a panel of economic experts known as the Economic Forum consults their crystal balls each biennium and delivers to the Legislature their projections of state revenue growth.

The Legislature is barred from authorizing spending in excess of those hoped-for revenues.

Now, nothing requires the Legislature to spend every penny the economists predict the state will have. Our delegates are perfectly free to say, "Let's leave spending right where it was last time; if all that loot really flows in we'll just cut tax rates next time around."

But they never do.

When revenues exceed expectations -- which is most of the time -- the Carson City big spenders sharpen their butcher knives, lick their chops, and prepare for another two-year spending spree.

But sometimes -- like now -- the revenues don't grow as fast as projected, even though they continue to rise.

On Wednesday, the state Tax Department reported another down month for taxable sales in August, off by 5.7 percent compared with the same month in the prior year. It was the largest drop in Nevada since September 2001, when taxable sales fell by 9.1 percent following the terrorist attacks of Sept. 11.

With just two months of data for the new fiscal year that began July 1, the state's share of sales taxes used to fund the two-year $6.8 billion budget is already off by $20 million from projections. Gaming taxes are also off, by $15 million in the first two months of the fiscal year.

In response, Gov. Jim Gibbons has called on his department heads and most government entities under his supervision to prepare contingency budgets 5 percent smaller than those they'd been hoping for. This is sensible planning. The governor hasn't even said the budgets will be reduced by that amount; he just wants to make sure his subalterns are prepared for what may be coming.

Well, heavens. From the shrieking and bellowing of the usual special pleaders and their many friends in the media, you'd think the governor had ordered state expenses reduced by the systematic execution and mass burial of 10 percent of Nevada's children, along with most of the aged and infirm.

Jim Rogers, chancellor of the university system and a proponent of feeding the bureaucracy by imposing corporate and personal income taxes on the people of Nevada, got his requisite face time after he made a big stink of refusing to comply with the governor's request. Clark County officials also pitched a fit.

Last week, opponents of the governor even trotted out Reno's Bill Raggio, the "Republican" leader of the state Senate, to hammer the governor and wring his hands over Nevada's tax structure. (Well, then, just what have you been doing up there for the past 34 years, Sen. Raggio?) Who will they cozy up to next, former Gov. Kenny Guinn, whose 2003 tax hikes were supposed to sate the public sector? (Ha, ha.)

All this is an obvious attempt to pressure the governor to call a special session so lawmakers -- who just wrapped their 2007 gathering a scant four months ago -- can return to Carson City and raise taxes.

Never mind that sales and gaming taxes may be off because many Nevadans themselves are feeling a pinch these days in this short-term housing-market slowdown, and thus cutting back on purchases. Yet lawmakers are supposed to shake down those very same Nevadans after just two months of disappointing revenues? Apparently, it's "no bureaucrat left behind."

Critics of Gov. Gibbons have been particularly vocal about his "no new taxes pledge." Of course, they ignore the fact that in the aftermath of Gov. Guinn's massive tax increases in 2003, there has been no appetite in the Legislature -- not even among liberal Democrats -- to impose new levies.

What we're dealing with is the perfectly predictable result of an ongoing pattern: spend, spend, spend during the good times, driving baseline budgets to the stratosphere, then cry poverty when the economy flattens and projections aren't realized.

Former Democratic Gov. Bob Miller was praised as a courageous leader when he faced recession head-on in 1993 with a state hiring freeze. His successor, Jim Gibbons, has proposed nothing so Draconian, to date.

Yet those who would seize any excuse to loot more from the paychecks of the working man would have us believe Gov. Gibbons can do nothing right.

In fact, he's on the right track -- and should stand firm. At this point, a special session of the Legislature to deal with fiscal realities that won't even become clear for months would be quite premature.