Can Nevada recover without rethinking economic development? | NevadaAppeal.com

Can Nevada recover without rethinking economic development?

Dr. Eugene T. Paslov
For the Nevada Appeal

University of Nevada, Reno, Economics Chairman Elliott Parker has produced a compelling argument that we must rethink, reinvent our economic policy if we are to recover from the recession.

Parker observes, “Nevada is in the midst of what is, essentially, an existential crisis. Creating a viable economy in a state with few resources has always been a challenge, and the crash of the gaming/construction model will be difficult to recover from. A key issue for Nevada’s decision-makers to grapple with is the role of the state’s government itself, for many Nevadans misunderstand the role government has played, and must play, in the state’s economic development.”

Those who lash out against state government think that it’s too big, taxes too high, public employees paid too much, and education can flourish without funds, must read Elliott Parker’s essay in the Nevada Review, 2011 (“Will History Repeat Itself? Nevada’s Economy After the Crash.”) Professor Parker’s thoughtful analysis may help governmental critics understand what must be done to save Nevada.

As an aside, for those who believe the path to recovery is low taxes, deregulation, small or no government, and a balanced budget, I submit that Nevada has had all of these. If this model worked, we would be at the top of the states for economic vitality. We’re not.

Dr. Parker talks about Nevada’s historical economy, mostly based on the boom and bust cycles of mining, the legalization of gambling in 1931 (to help off-set the effects of the Great Depression) and because of the proximity to expanding California markets. Nevada appeared to thrive unendingly. But it did end. During this same period, other states were building stable tax structures to deal with their infrastructure and schools. Nevada relied primarily on gaming and construction revenues. We had some success but, more importantly, we were sowing the seeds of our own destruction. Indian casinos flourished and other states cut into our once-exclusive gaming monopoly.

Elliott Parker’s analysis of government is informative. Taxes pay for government and “Nevadans … have long had a mixed relationship with taxes and government.” Dr. Parker goes on to suggest that “… in a severe downturn states would be better off if their government cut taxes and increased spending, rather than the opposite.” Nevada already has one of the smallest state governments in the country and, paradoxically, low taxes.

Parker concludes Nevada cannot thrive without a robust K-12 and university system. These systems have been cut dramatically. Our economy requires productive people as our critical resource. If we lose the means to produce these people, all is lost. Policy makers take note and act thoughtfully.

• Eugene Paslov is a board member of the Davidson Academy at the University of Nevada, Reno and the former Nevada state superintendent of schools.