Spending outpaces economy for Nevada government

This story originally appeared in the Reno Gazette Journal

Dusty Wunderlich  |  Published 10:05 a.m. PT January 26, 2017 

The new year marks a time of reflection and goal setting. Last year ended with a multitude of positive articles about Nevada and Reno. Recent headlines highlighted our population growth as the second-fastest in the country. There is constantly talk of more companies coming to Nevada. And let’s not forget more Tesla and Raiders headlines than we can count. But do the headlines reflect actual positive results or are we focusing on activity over accomplishment? Where do we draw the line between reality and hype?

You might be one of those hard-working local employees or small business owners that read the headlines but are not necessarily seeing a positive impact in your life. Your rent has gone up considerably, your kid’s schools are overcrowded, and you have not seen a raise in years. All of which have occurred in the last decade.

The only true constant seems to be that you are continually told that taxes need to be increased. However, the data tells a different story than the headlines. Fiscal mismanagement is causing our spending to outpace our growth. Put simply, we do not have a revenue problem, we have a spending problem.

So who is winning in this game of taxation? Government. According to Nevada Policy Research Institute’s 2016 Piggy Book, “Nevada’s local government employees are among the most highly compensated in the nation with the average local government worker earning 20 percent more than the average Nevada private sector worker.”

It pays to be in Nevada government. This level of disconnect between private and public sector wages further incentivizes government to raise taxes. Many can relate to this in the recent salary and bonus headlines regarding the Washoe County School District superintendent, a position that gets paid an automatic bonus each year for effectively not quitting.

Spending continues to outpace economic growth, indicating undisciplined financial controls.  According to the Nevada State Controller’s annual financial report, total state spending between 2006-2016 grew 22 percent faster than the incomes of Nevada families and businesses. It also grew 32 percent faster than the overall Nevada economy. This can be summed up in a simple statement: We are growing broke.

A potentially worse scenario is taking place in the city of Reno. The Fiscal Times recently issued its City Fiscal Strength Index 2017 which ranked Reno at 113 out of 116 cities. The two most heavily weighted indicators were general fund balance to expenditures and long term obligations to revenues. This should be a cause for concern for all Nevada and Reno constituents.

A sudden downturn in the economy could result in a default on our obligations and a further expense back to taxpayers. In facing a $400 million budget shortfall, I hope the legislature uses their time in the 2017 session to reduce spending and stop tax breaks to billionaires rather than find ways to increase taxes. It is time hard working Nevada families and businesses who haven’t had a raise in years stop being the source of undisciplined government spending.