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Nevada ‘cutting’ its way to record spending

Telling a lie over and over doesn’t make it true. But it can turn a lie into a narrative.

Don’t believe me? Take Nevada’s budget. You’ll soon hear that the state’s general fund is about to be cut to the bone.

For the 2015-17 biennium, Nevada’s general fund budget is $7.3 billion, bolstered by Gov. Brian Sandoval’s record $1.5 billion tax increase. For 2017-19, the Economic Forum projects the state will have general fund revenues of $7.88 billion.

Sandoval and lawmakers will start the 2017 Legislature with $541 million in new spending money. Cue Kool &The Gang’s “Celebration.”

Maybe lawmakers will decide to repeal Sandoval’s gross-receipts commerce tax, which is only projected to net $190 million over the next two years, after accounting for offsetting tax credits. They still would have $351 million in new spending money.

Instead, politicians and bureaucrats are talking about the pain of making hundreds of millions of dollars in spending cuts.

“We talk about a $200 to $400 million budget deficit right now,” Senate Majority Leader Aaron Ford, D-Las Vegas, told Channel 8.

Why? Because state agencies have asked for total spending of between $8.2 billion and $8.5 billion.

This is like making $50,000 a year, getting a $5,000 raise and complaining about a $5,000 pay cut because you asked for a $60,000 salary.

The 2012 version of Sandoval actually resisted releasing these wish lists. He said it would be misleading because they wouldn’t be included in his proposed budget. The 2015, post-re-election edition of Sandoval, though, bragged that his record $7.3 billion budget proposal was “significantly less than agency requests.”

This year, big government advocates already are saying, “But, but, but …” Most of the $541 million in new money is going to be spent on growth on increased social service caseloads, school enrollment growth and “roll-up costs.” They want expanded programs. They want new programs. They want to be held harmless from increased costs. And if they don’t get what they want, it’s a “cut.”

Imagine complaining to your boss about a pay “cut” when the price of gas goes up or you have a new baby.

It would be refreshing to have a vigorous, public debate about the trade-offs between higher pay and pensions for state workers and providing the services residents expect, but politicians find it’s much easier to grow spending if the public thinks they’re always “cutting.”

It’s also amusing to see elected officials act like the state budget is beyond their control. It’s literally their job to create and pass the budget. If something is growing too fast, change it. Indeed, many of the factors that are driving state spending higher stem from decisions lawmakers made in previous years.

Expanding Medicaid? Sandoval pushed that in 2013 knowing that Nevada would face additional expenses this year. At the time, then-Sen. and current Lt. Gov. Mark Hutchison warned about the cost, saying, “We don’t have major problems now, but in the future we will.” Welcome to the future.

How about Tesla’s $1.3 billion in abatements and transferable tax credits, which ensure the best-case scenario is a growing Reno-area population that needs more government services while a major business pays no taxes for 10 years? Sandoval and a unanimous Legislature passed that.

If lawmakers don’t like the costs of past decisions, change them. Repealing Nevada’s Medicaid expansion is an obvious place to start.

In the meantime, let’s make sure the state’s politicians call their $541 million windfall what it is: a big, fat, spending increase.

Victor Joecks’ column appears in the Nevada section each Sunday, Wednesday and Friday. Contact him at vjoecks@reviewjournal.com. Follow @victorjoecks on Twitter.

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