Good news in state tax revenues
By Nevada Appeal editorial board
There are three important messages for residents in the news that Nevada tax revenues are running ahead of forecasts.
First, we’re ready to cheer any sign that casino and sales-tax revenues are emerging from the doldrums. The road to recovery for Nevada’s economy has been uphill for two years now, but each month seems to bring encouragement.
On Tuesday, state Budget Director Perry Comeaux reported both casino fees and sales-tax collections – the state’s two biggest sources of revenue – were greater than expected by a total of $16 million.
As Comeaux cautioned, it’s not yet time to break out the bubbly. The Legislature wiped out the state’s $135 million rainy-day fund last year, and there’s still a potential for a significant budget shortfall in years to come.
But it’s far better to be ahead of the game than behind.
A second point has to do with the protracted fight in the Legislature over Gov. Kenny Guinn’s budget.
Yes, it was an important philosophical debate on who should be taxed and how much. It focused needed attention on growth and services, especially education, and how state government meets its obligations to its residents.
Still, the amount being dickered over endlessly was in the neighborhood of $200 million, and it was all based on the best predictions the state’s economic minds have to offer. All too frequently, reality intrudes.
In this case, if the trends continue, reality will mean Nevada’s tax base should be OK and many of the finer points of the tax debate will be moot.
Which brings us to the third point: A healthy economy is by far the greatest factor in a healthy state government. When times are good, nobody gets excited over tinkering with the tax structure. When things hit the skids, everybody has a different solution.
Let us take the opportunity to renew the call for a cap on state spending tied to population and economic growth. When we peer into our crystal balls, we all hope for the best and fear the worst. Wouldn’t it be better to simply plan for either?