Is state budget projection half empty or half full?

2010-12-03T16:41:00Z Is state budget projection half empty or half full? Elko Daily Free Press
December 03, 2010 4:41 pm

Anyone picking up a paper at the newsstands Thursday would have noticed a major contrast in headlines regarding Nevada’s budget shortfall.

The Elko Daily Free Press headline, based on an Associated Press article, declared “State has $1.1B less to spend.”

In even bolder letters, the Reno newspaper declared in red ink, “$3 BILLION.”

Both headlines were correct, depending on the small print. According to the Economic Forum, the state will have $1.1 billion less revenue in the upcoming budget cycle, but faces a $3 billion shortfall compared with the amount of money state agencies have requested to spend.

As with most political controversies the difference is one of perception, a matter of placing emphasis in a way that serves your agenda. These dueling numbers were a matter of contention in the last election cycle, with one side grossly exaggerating the budget deficit and the other pooh-poohing it into virtual nonexistence.

The magic number that puts all of this into perspective is $6.4 million, the amount of state spending in the current biennium. State agencies would like to spend an additional $1.9 billion in the coming cycle, while Gov.-elect Brian Sandoval wants to cut $1.1 billion to bring spending in line with the forum’s revenue projections.

The Economic Forum — a panel of five financial experts appointed to estimate state revenue for budget purposes — was supposed to have taken some of the political grandstanding out of the budget process. It has done a fairly good job of estimating revenue since it was created in 1993, except during times when the economy unexpectedly took a dramatic turn up or down.

Neither Republicans nor Democrats can argue with the forum’s figure. State law requires lawmakers to use the number as their official crystal ball when deciding how to allocate expenditures.

Some lawmakers were hoping for a better report. Sales tax receipts and jobless rates have shown signs of hitting bottom, and many are hopeful that the recent glimpses of recovery point to a brighter future.

Instead, the forum chose to take the conservative route. It predicts no swift relief from the crushing effects of the recession on Nevada’s tourism-dependent economy.

This may sound bleak, but the people serving on the forum are no Grinches. More than perhaps anyone else, they have their finger on the state’s financial pulse.

Some lawmakers this session will be tempted to boost taxes in order to avoid spending cuts. They will continue to focus on the “$3 BILLION” shortfall that is based on state agency wish lists.

We will stay focused on the $1.1 billion figure, which will be difficult enough to manage without crippling the ability of state agencies to do their jobs.


Members of the Elko Daily Free Press editorial board are John Pfeifer, Jeffry Mullins and Marianne Kobak.

Copyright 2015 Elko Daily Free Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(2) Comments

  1. Dissent
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    Dissent - December 05, 2010 10:49 pm
    Instead on focusing on what they will be lacking, how about focusing on how these agencies are going to deal withthe lack of funds. It's called a budget for a reason. Buck up use what the taxpayers have given you....cut the dead weight and do your job! I am so tired of hearing what these departments don't have, we all fall on hard's your turn!
  2. Dissent
    Report Abuse
    Dissent - December 04, 2010 8:06 am
    You mean like crippling the DMV.
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