Sorting budget basics from baloney

All the spin, all the exaggerations, all the shrieks and outright lies -- it must be time for another session of the Nevada Legislature.

In each of the past two budget bashes, lawmakers and special interests trampled one another in the rush to spend hundreds of millions of dollars in new funding. But now that there's less money to go around, the stakes are even higher. So you'd hope Republicans and Democrats, public employee unions and private-sector lobbyists, entrenched insiders and common taxpayers could at least agree on how to talk about funding education, welfare programs and public safety for the next two years.

Instead, tax figures are twisted, definitions are substituted and euphemisms carry the day in the capital as everyone tries to make sense of the state's budget and the politics behind it. Manipulating the terminology can manipulate outcomes.

The Legislature convenes in just eight days, and five major myths already are gaining traction as facts. Keep this guide handy to sort the basics from the baloney.

Myth No. 1: The governor and lawmakers have cut $1.5 billion from the 2007-09 budget.

The state is weathering a $1.5 billion revenue shortfall. But elected officials haven't cut nearly that much from the general fund.

They drained the rainy day fund of $270 million, opened a constitutionally dubious $160 million line of credit, redirected $77 million in reserves, shifted a few accounts and employed some neat bookkeeping tricks so they had to cut only about $900 million from the budget. And most of those cuts were "one-shot" expenses such as supplies, equipment and capital projects that could be delayed or killed altogether. In all, only $400 million in operating expenses have been eliminated from the $6.8 billion spending plan thus far, requiring the layoffs of fewer than 40 full-time workers.

In fact, Gov. Jim Gibbons and lawmakers decided they had adequate resources last year to provide all state workers with pay raises of at least 4 percent, and many with raises of between 8 and 9 percent.

Myth No. 2: The governor's 2009-11 budget proposes cuts of more than 30 percent to state programs to counter a deficit of at least $2 billion.

For starters, Nevada has no budget deficit for 2009-11 because no budget has been passed. Gov. Gibbons has proposed a $6.2 billion budget that is about 9 percent smaller than the spending plan approved in 2007 and essentially the same size as the modified budget in place today. He's banking on about $5.7 billion in state tax collections and lots of help from counties and a federal stimulus bailout to keep it balanced.

Budgeting busybodies claim the state should be spending about $8 billion over the next two years to "maintain services." That's code for more guaranteed pay raises for state workers and built-in spending increases, supposedly to account for inflation -- even though economists are warning of the threat of deflation -- and population growth that isn't likely to occur.

The $5.7 billion in projected state tax collections is about 30 percent smaller than the $8 billion lawmakers wish would come in.

The phantom $2 billion deficit -- you'll also hear this figure described as a "cut" -- merely represents what lawmakers believe they're entitled to spend.

Myth No. 3: A stable, diversified and restructured system of taxation will end the state government's "boom-and-bust" budget cycle.

Over the past 15 months, this newspaper's editorial page has documented the budget battles playing out in statehouses across the country. All of these states have the broad-based taxes that university system Chancellor Jim Rogers has been clamoring for.

California and Arizona have personal and corporate income taxes. So do New York and New Jersey -- with death taxes to boot. All have funding problems -- spending problems -- to match Nevada's. Having "diverse," supposedly "stable" tax structures has not spared them from the sacrifices needed to tough out the devastating economic downturn.

This legislative session would go a long way toward resolution if, when it opens Feb. 2, Assembly Speaker Barbara Buckley and Senate Majority Leader Steven Horsford would identify in their opening speeches the one state that has a tax structure Nevada should copy, the one balance of levies that would allow state spending to continue to grow, even in this economy. The Democrats can't, so they won't.

Myth No. 4: Democratic lawmakers are committed to a deliberate examination of state finances and have reserved judgment on whether taxes should be increased.

This one's almost funny. Talk to any lobbyist who has started pressing the flesh and working the phones, and they'll tell you some combination of new taxes and tax increases is a sure thing in the Assembly, where Democrats have the two-thirds supermajority needed to boost levies. Beyond the voter-approved increase to the hotel room tax, lawmakers will consider big increases to sin taxes and the modified business tax, and even the creation of a gross-receipts tax. Yes, that gross-receipts tax. The one Democrats fell in love with during the tax-hiking session of 2003 but couldn't get through the state Senate because it so harms businesses and worker wages.

Democrats will openly say that the governor's budget is unacceptable and will be changed. They're assuring Clark and Washoe county officials that the state won't swipe their property tax revenues. They're telling teachers they won't support pay cuts or layoffs. They're telling Rogers the university system will be spared from the budget ax.

But they won't say whether they support tax increases? What are they going to do, open a state-run, school-themed casino on the Strip that takes bets on prep sports?

Of course Democrats want to raise taxes. They're just trying to settle on the how and the how much -- and keep us in the dark while they do it.

Myth No. 5: Carson City's big spenders only seek adequate funding for education and other vital services.

There's no such thing as "adequate" funding of public services. Our government masters will never, ever have enough of your money to spend.

Glenn Cook (gcook@reviewjournal.com) is a Review-Journal editorial writer.