Nevada must be as flush as a Powerball winner. The Wall Street Journal reported last week that states across the nation are keeping spending relatively flat “as they grapple with weak revenue and uncertainty about policy changes in Washington, D.C.” Not the Silver State.
According to the National Association of State Budget Offices, state general fund spending “would increase just 1 percent compared to current estimated spending levels under governors’ fiscal 2018 budgets.” At least 23 states have made “net mid-year budget cuts” for that fiscal year, the group reports.
Meanwhile, Nevada lawmakers and Gov. Brian Sandoval clearly feel no such restraint. The budget approved during the recently wrapped 2017 legislative session bumps spending to $8.2 billion for the upcoming biennium. That’s a healthy 12.3 percent increase and belies the national trend.
At a national level, the small spending increases in most states reflect “weak revenue collection that has dogged states for the last couple of years, raising some worries about how prepared states are for the next recession,” the Journal noted.
But consistent revenue growth is also no guarantee that a state is adequately prepared to deal with economic downturns, particularly if revenues are directed to programs that increase baseline budgets. During the boom growth years of the 1990s and early 2000s, Nevada embarked upon an elaborate spending spree thanks to rising gaming and sales tax collections. When the recession hit in 2007, the state was ill-prepared and among the hardest hit.
A healthy recovery has now put Nevada in an enviable financial position when compared with many other states. But let’s not forget that history has a way of repeating itself.