Welcome to Chicago! Your wallet, please

What do you get when you combine government spending that far outstrips economic growth, a burgeoning class of unionized public employees insulated by guaranteed pay raises, retirement benefits and iron-clad job security, and a political culture that commands tax increases over budget cuts?

You get a repeating cycle of fiscal crises. You get endless tax hikes and long-term liabilities that can't possibly be met.

You get present-day Chicago.

Second City bureaucrats are second to none in their appetite for private-sector wealth. As Chicago deals with a stagnant economy and the housing slump, Mayor Richard Daley is proposing a slate of new taxes and tax hikes to cover the city's $5.4 billion budget and bail out Chicago's bloated transit authority.

Mayor Daley wants SUV owners to pay an extra $30 for their registration sticker. He wants higher property taxes. And -- gulp! -- he wants to slap a 10-cent tax on every bottle of water sold in the city.

"To keep our city's progress going, I decided -- reluctantly -- that as our last resort we must ask taxpayers for more," Daley said a few weeks ago, in announcing his new budget.

For Mayor Daley, progress doesn't mean more jobs, more investment and voters being able to keep more of their own money. "Progress" is measured by how much cash flows out of the public's pockets and into government vaults.

On top of his proposals, the county government wants to boost its sales tax rate by 2 percentage points, which would make the city's already-punitive 9 percent levy a whopping 11 percent. And the county wants to increase the gasoline tax by 6 cents per gallon.

"From a national perspective, the range of taxes that are being proposed and the size of the tax increases ... have everyone wondering: What is going on in Chicago?" asked Laurence Msall, president of the Chicago-based Civic Federation, a tax watchdog.

What's going on, first and foremost, is that Chicago's already-high tax burden has discouraged the economic growth needed to generate a predictable, steadily growing flow of tax revenue.

Second, and just as important, is the crippling cost of Chicago's unionized government work force. Their salaries grow regardless of the economic conditions that taxpaying businesses confront, and their promised pensions and retirement health benefits are unsustainable over the long term. Chicago's transit authority alone has a $2 billion unfunded pension liability. Proposed fare increases and service reductions won't begin to meet that pending bill.

This should all serve as a cautionary tale for Nevada governments, which are dealing with their own current budgetary challenges and have their own huge unfunded pension liabilities. Sales and gaming tax collections aren't meeting revenue forecasts, triggering the familiar chorus from the state's big spenders: Nevada, too, must raise its taxes to avert catastrophic cuts to government services!

We've been down this road before. In 2003, in response to the brief recession triggered by the 9/11 terrorist attacks, the Legislature passed record tax increases. Those hikes led to a spike in per-capita spending and unprecedented government growth -- growth that can't be held back even in a slow-growing economy like Nevada's today.

One ill-advised, panic-prompted round of tax increases inevitably leads to another. And another. Until government's hunt for more of your money leads them to propose ... taxing water.