Elliott Parker: Time to find a compromise for good of state
March 25, 2011
Dear Gov. Brian Sandoval,
I have just been asked by my university’s faculty senate to head a committee with an awful task. During the next month, we will review program closure proposals, trying to get part of the way to the budget cuts you proposed. I would like to ask you to please make this awful job unnecessary.
We call this process curricular review. Actually, we are deciding which faculty to fire, and which students will lose their degree programs. These are productive faculty who have worked hard, to help us improve this university. We have been cutting budgets by firing many good people over the past four years. This is really getting old, and it is completely reversing years of effort to make Nevadans proud of their oldest university.
My university alone has already lost 350 positions, mostly very educated people who then left the state – and Nevada already has too few of those. Now we have 150 more jobs on the block, and many more to come since we are less than halfway to your target. We aren’t that big of a university, and these cuts are starting to cripple us. Your proposals will do incredible damage.
You are mistaken when you say these cuts are best for the state’s economy. As an economist who looks at the data, I know these cuts are bad for the economy. Cutting state expenditures during a recession, especially educational expenditures, makes the economy worse, not better.
We know that education matters for the future of the state, both K-12 and higher education. Without our monopoly on gambling, Nevada doesn’t have many resources, but nowadays the most productive resource is in the knowledge and skills of the workforce. It will take many years to undo the damage we are doing now.
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This is a death spiral. If we gut higher education, productive people and productive investment will flow out of the state, not in.
We know this is not a temporary problem. Gaming is a much smaller share of our economy than it used to be, even though our state budget still largely depends on it. We have known for years that we need a tax system that better reflects our economy, a tax system that can apply low rates to a much, much broader base. Yet we keep procrastinating on the solution.
The budget problem is not too big to solve. While the state’s budget gap is a large fraction of the general fund, it is only 1 percent of our state economy. For the average resident, it is roughly the cost of eating out once a month.
So why not find a compromise, for the good of the state? Pass better taxes but delay them, so you don’t raise them during a recession.
Instead, borrow against these future taxes to get us through our current crisis without doing too much long-term damage. Then negotiate other reforms that will help control costs, so we don’t have to raise taxes even more in the future.
You seem like a reasonable person, not an ideologue. I assume you have good intentions. Can you please help us, and not lead us off the cliff?
Elliott Parker, professor and chairman, Department of Economics, University of Nevada, Reno
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