‘We don’t have the revenue …’

For the better part of four years, Nevada Democrats have relentlessly assailed Republican Gov. Jim Gibbons for having the leadership skills and intellect of a lemming.

What they hate to admit is that he's been correct all along on the budget -- and is being proved so again.

As Nevada's economy plunged deeper and deeper into recession, Gov. Gibbons warned aspiring tax-hikers that beleaguered taxpayers couldn't support an even bigger bureaucracy -- their suffering and sacrifice required a much leaner government that lived within its means. Further, he warned of the likelihood of continued declines in economic activity, which would lead to more revenue shortfalls and quickly send an overgrown spending plan to the cutting board.

Here we are, not even two months into the current two-year budget cycle, and it's a lock that the $6.9 billion budget approved by the Legislature stands no chance of being realized. Lawmakers were counting on a 3.4 percent increase in gaming revenue for the new fiscal year. But June's casino revenues, reported Tuesday, dropped 13.8 percent from the same month a year ago to $818.2 million, a five-year low.

The taxes on those revenues were paid last month, marking the state's first collections of the new fiscal year. And on one month's worth of gaming taxes alone, the state is looking at a $10 million hole.

So the governor is doing exactly what he said he'd have to do if the Democrats went ahead and raised taxes and increased spending -- laying the groundwork to cut that spending.

"If it gets to a point where we no longer can make adjustments, we will have to consider a special session and get the Legislature's help," Gov. Gibbons said Tuesday.

"The issue is spending. ... The Legislature decided to make changes on their own that increased taxes by $1 billion. We are seeing we don't have the revenue to meet that spending request."

Democrats can barely muster a bluff to this splash of cold reality. They must pray that the economy begins a quick turnaround by ... tomorrow.

"Based on the economic indicators we are seeing, the numbers should be flat, not heading downward," said Assembly Majority Leader John Oceguera, D-Las Vegas, who advocates waiting for revenue figures from the first quarter, ending Sept. 30, before considering a budget-cutting special session. "If they are flat or begin to increase, we will be in decent shape. If they are headed downward, we won't be in good shape."

Unfortunately, the numbers are headed downward, and no one can credibly say when Nevada's economy might hit bottom. Sales tax collections remain abysmal. Real estate transfer taxes, jumping because of the frenzy of sales of bank-owned homes, might make up for some of those declines, but prices remain extremely low.

Gov. Gibbons' personal indiscretions have made it easy for his critics to pummel him, but they should follow his lead here. The state needs to plan to reduce expenses in a transparent manner to make sure the public's budget priorities -- not those of the bureaucracy -- are preserved.