Monday, June 30, 2008

In Nevada, Government Actually Sometimes Says 'No'

I'm sure most EBC readers don't spend much time reading about Nevada politics. But if you did, you'd know that, like California, Nevada faces a budget crunch, and its legislature held a special session last weekend to resolve things.

California could learn a lot from the way Nevada handles these things. In short, they cut. A lot. And they balanced their budget.

I was pretty shocked this past weekend as I read the Nevada Appeal articles about the special session. From the peace and quiet of my Nevada HQ, I tried to imagine how such a situation would play out in Sacramento.

First, there's just absolutely no way the Democrats in the California legislature would even consider significant spending cuts without first lining up hundreds of demonstrators.

California is childish in this way. Our representatives repeatedly pick the most important and valuable public services, and as soon as any cuts need to be made, they tell us that those are the ones that will be cut. Then they line up teachers, cops and whoever else they can find to demagogue the issue still further.

Then, the key moment comes when folks like Don Perata trot out their demands to raise taxes. This suggestion always strikes me as hilarious in light of the fact that California already is number 6 nationwide  in per-household government spending. Nevada is number 43.

Oh, and did I mention that Nevada has no income tax? Must be nice. Move to Nevada, get a 10 percent pay raise.

One thing that few Californians realize is that we may actually be at the end of a period of tax rationality.

Democrats are currently just a few votes shy of the two-thirds majority they need in both houses of the legislature to pass a budget without any input from Republicans. After the 2010 census, they will re-draw the legislative boundaries, with predictable results.

I think it's a reasonable likelihood that the Democrats will eventually get their two-thirds majority, and then I would expect to see state income tax rates in excess of 15 percent. I see absolutely nothing in the state's liberal agenda that stands in the way of such an eventuality.

It's sad to see things go this way. This is especially true in light of our neighbors in Nevada.

It's not as if Nevada is some sort of far-right-wing backwater. Far from it, actually: Democrats are the majority in the Nevada state assembly. No, the difference is that Nevada actually has political give-and-take. This is something that's increasingly lacking in California.

One-party government is a disaster. Even Leftists should be able to understand this point, considering the federal government's problems under monolithic Republican rule.

California needs more conservatism to make it more like Nevada. Only then may California be saved from its own shortsightedness.


  1. Thanks for the information. It was great to see the alternative to what goes on here.

    However, you are preaching to the choir.

    I find that things are so one sided here that many people don't even understand that there is an alternative approach to "Tax and spend".

    How can this blog be used to reach out to well intentioned people that might appreciate this point of view?

  2. Oh, I don't know, I looked at the things they're cutting and nearly all of them appear to be either reserves or capital expenses. Doesn't sound like "cuts" to me, just deferrals. I guess that serves to balance the budget one year, but it looks like they still have a structural problem because those things will hit cashflow eventually unless they were cockeyed to begin with.

    Totally agree with you that one-party rule is typically a disaster, at least on the finance side. I always get a chuckle at the market going up when the executive branch and legislative branch are at odds with each other - gridlocked government is good for business

    On the other hand, all your gabbing about the "Nevada HQ" makes me think, do I want to be in California? I mean, I'm from Texas originally which has no income tax either. Easy answer though, yes, California is simply that much better than Nevada, and part of it is due to the extra spending I think. For instance, I *like* BART. And pretty bridges, etc. I don't think I get enough for my money but I'm willing to pay to get things, is all I'm saying.

    But it's good to question those things.

  3. To maui - Yes, much of what Nevada did in the special session was not true cutting. But they did in fact authorize significant cuts. My point is not that their governance is perfect. Rather, it's at least "somewhat reasonable."

    To Mike - I don't disagree about California's plusses, but consider that Seattle too has no income tax. And, there, you get much of the beauty you're describing. Also, my concern is not just the current state of affairs, but what we may face in 5 or 10 years. I see little opposition to tax increases in the future.