States in recession?

More evidence that Nevada's ongoing budget travails have little to do with a deficient tax structure:

A report set to be released today by the National Conference of State Legislatures found a bleak financial picture in more than two-thirds of the states.

For the upcoming fiscal year, 23 states -- including Nevada -- anticipate budget shortfalls as revenue comes in below projections.

At least a dozen states reported that personal income tax collections were falling below estimates. California faces a $16 billion deficit over the next two years. New Jersey is staring at a $3 billion hole.

Even little Delaware projects $69 million in red ink this year.

"Whether or not the national economy is in recession -- a subject of ongoing debate -- is almost beside the point for some states," said the NCSL report.

In Nevada, Gov. Jim Gibbons has already ordered agency chiefs to make reductions in anticipated spending increases in an effort to close the state's $900 million deficit. Depending on how tax collections go in the next few months, that number could certainly go higher.

Some observers argue that Nevada's budget woes stem from its heavy reliance on gaming and sales taxes -- that "expanding" the tax base would produce a more reliable revenue stream and thus help shield the state from economic downturns.

The fact that most other states -- including those imposing personal and corporate income taxes and scores of other levies -- are also struggling today casts doubt on such a hypothesis.

In reality, lawmakers in most states -- including Nevada -- spend, spend, spend during the good times, building new programs into ballooning baseline budgets. Then when the economy hits a blip and revenues slow, the talk inevitably turns to tax hikes "just so we can maintain our current level of services."

To best inoculate the state from recession, forget raising taxes or "expanding" the tax base and instead try exercising spending restraint during boom years.