Nevada Goes Bust

Source: Sasha Abramsky, The Nation, published online September 2, 2010

Most analysts believe that Nevada is facing a shortfall of about $3.4 billion for the coming two-year budget cycle–meaning it does not have the revenues to fund about 50 percent of its current obligations. The state thus confronts a crossroads moment: find ways to stabilize and increase its tax base to at least partially plug these holes or face a rollback of government services unprecedented in the modern era. The Silver State is constitutionally required to balance its budget and prohibited from imposing a state income tax; it does not have a stable, across-the-board business tax and is being buffeted by increasingly strong anti-tax winds from the Tea Party movement. For all these reasons, a 50 percent revenue shortfall means the state would face the fiscal equivalent of a St. Valentine’s Day massacre: line up large state programs, have them face the wall, mow them down….The situation is so brutal, says Mary Lau, president and CEO of the Retail Association of Nevada, that without new taxes Nevada’s decision-makers could eliminate all spending not related to education or health and human services–including all funding for police, prisons, highway patrol and the like–and still be left with a budget deficit.

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