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Conservative finances, healthy city

Nevada Appeal editorial board

Carson City residents are living in fiscally responsible town in a fiscally responsible state in a country that hasn’t quite gotten the message yet.

The numbers in the city’s proposed budget for 2004-2005 show that, despite some significant challenges, things are in pretty good shape. It starts with conservative forecasting of revenues, which this year means sales tax revenues will come in $1.6 million higher than expected.

Next, when the going got tough – as Wal-Mart moved across the county line, Kmart shut its store and a shopping center drew several national retailers into North Douglas County – the belts were tightened at City Hall. Budgets were cut by 3 percent, which caused some distress but went relatively smoothly.

Now, looking ahead, City Manager Linda Ritter is still playing close to the vest with revenue projections at 1.3 percent over the current year, with no proposed increase in taxes.

It’s true the challenges remain. With an over-reliance on sales tax, which are being heavily propped up by auto sales, the city remains vulnerable to the exodus of dollars to Douglas County. An auto mall is the idea to keep that revenue parked in Carson City, but until that happens there are no guarantees.

Likewise, general retail needs to rebound. A major store in the old Kmart building would help. The revenue forecast from City Hall isn’t anticipating sales-tax growth from a new Wal-Mart planned for Hot Springs Road, another savvy move. The store may be a windfall, but it could also drive some others out of business.

Meanwhile, the state of Nevada can’t claim to be holding the line on taxes after the record-setting increases of 2003, but it did precede those increases with significant budget reductions. The result is a state on solid financial footing.

That’s why we agree with the Nevada Taxpayers Association that repealing the taxes increases – and opening that jar of bees – isn’t a good idea. As long as the spending line holds and the economy recovers, Nevadans will be fine.

Now if Congress would take a cost-cutting oath, we could keep the income taxes down and puncture the ballooning federal deficit.