Tightening the reins on state spending
August 20, 2002
We’ve often said Carson City has the state’s most stable economy, because the biggest employer is state government.
While most businesses have been hit by recession and the post-Sept. 11 slowdown — and most tourism businesses have been hit the hardest — Carson City has been able to stay on a relatively even keel because of the employment base provided by all those government workers.
Now, though, the state’s budget forecast has become so dismal the threat of layoffs is in the air. Even as many private businesses start to get back on their feet, the worst may be yet to come in the public sector.
Thank goodness state lawmakers have managed to keep their hands off the so-called Rainy Day Fund. It may not be raining, but the outlook isn’t very bright, either.
Of the $275 million budget deficit forecast by Gov. Kenny Guinn and his policy-makers, all but $40 million can be covered by the Rainy Day Fund. That $40 million, however, is where state departments are going to really feel the pinch.
Last week, when Guinn told departments to cut their spending by 3 percent, the specter of layoffs reared its head.
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Although it’s up to department heads to make the 3 percent reductions, Chief of Staff Marybel Batjer said “There will be changes in service delivery. We just can’t meet all the needs when you don’t have the money to do it.”
The state has already taken steps, including a hiring freeze, to hold down spending. The hope is that as the economy turns and revenues improve, state government will also begin to ease toward normal.
But the most responsible thing for state government to do, which will help the economy best in the long run, is to keep cutting spending, even when it hurts. Taxpayers will miss the services, but worse would be for the state to spend itself into a deeper hole — a hole only taxpayers would be able to fill.
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