Leadership Matters Even If The Leader Is A Fool

Nevada is in a world of economic hurt. Most people recognize this fact. But, these same people have NO idea of how bad the situation is going to become as we move on into the near future. So I would like to ask some rhetorical questions and answer them in as hard a core answers set of answers as possible from my point of view.

Is Governor-elect Brian Sandoval with his “NO NEW TAXES” mantra a blithering idiot or is he just lost in the economic rain in Juarez, to paraphrase Bob Dylan?

This question has two parts and so does the answer. My opinion is that the answer is YES to both parts. But I could be wrong. So here is some information to help you decide.

The 2009 Nevada State Budget was $6.8 BILLION per year or to put it in the context of the two year time frame it is suppose to deal with – approximately $13.5 BILLION DOLLARS. What these numbers mean is that the State of Nevada is authorized to spend no more than the amount specified in the budget.

Now the Nevada State Budget must be balanced. Why? Because a piece of paper says so. But what does balanced mean? To balance the budget means the State of Nevada has to collect revenues (call them whatever you want) equal to the EXACT authorized amount of money to be spent.

But do you really know what that means? Do you know the reality of what a BILLION DOLLARS actually represents? Most people in Nevada, including all the State Legislature, the Board of Regents and almost every elected official are beyond clueless.

For your information, one billion dollars is 10 MILLION $100 dollar bills. $13.5 billion dollars is 135 MILLION $100 bills.

Now the diabolical thing about this budget balancing game is that while the State Legislature has authorized the spending of 135 million $100 bills, to balance the budget it must collect, ON AVERAGE, 135 million $100 bills from all the tax payers in the state.

What does that mean? Lets see. According to the latest preliminary 2010 US Census numbers, there are 2,643,085 people living in Nevada. So, if we do a bit of simple math, we find that every LIVING person in Nevada would need to pay, approximately, $2,500 per year (in someway) to the state in order to balance the 2009 state budget.

Now the 2009 budget is basically like split milk … Already wasted. But the projected 2011 budget is projected to be higher in 2009 and the projected revenue is projected to be $3 BILLION short – or to keep the numbers understandable – 30 MILLION $100 Dollar Bills LESS than needed.

Let’s throw a little monkey wrench into the budget ball game: The per capita money income of people in Nevada. This number is approximately $25,000 based on a look at the most recent government statistics. It means that ON AVERAGE, every LIVING person in Nevada earns, from whatever source, $25,000/year.

But on average means, some people make way more and some people make less or even ZERO. And this number hides the fact that the official Nevada unemployment rate is 15%, the number of disabled person is 5% and 30% of the population is made up of children.

The fundamental reality of the problem is that 50% of the population has little or NO income with which to help solve the problem and even worse: Every state worker you furlough or lay off and everyone else who loses their job makes the problem even worse.

Here are the relevant numbers for 2011. The proposed 2011 State budget is $8.3 Billion dollars per year for the next two years.   The projected revenue is $5.3 Billion dollars per year. Simple math and common sense says you need raise $3 Billion more dollars or you need to cut the budget $3 Billion or some combination of both.

It also means the average person in Nevada needs to pay MORE than they are presently paying just to cover the shortfall. Yet half the population does not even have the $25,000 in income they would need to come up with to fix the problem.

But, where do you come up with the $3 Billion dollars – an extra 30 Million $100 bills – and where do you cut $3 Billion from the budget?

You know what they say. It’s not the money. But it usually is the money. In this case they are only partially right.

No matter what is done, EVERYONE in the state of Nevada is going to be screwed big time in the next few years, some a bit more than others, because money is only a part of the problem.

The real problem in Nevada is the State Constitution, a 19th century anachronism that is simply out of touch with the present.

It is IMPOSSIBLE to fix the state budget problem without re-writing the state constitution and that is no easy trick to do.

Do we need a Board of Regents? NO. Do we need to have a limit on how much we can tax mining companies relative to everyone else in the state? NO. And so it goes.

Be prepared for financial Armageddon. You can be 100% assured that Brian Sandoval will make things worse than they are today. He has no idea about the scope of the problem. He’s a follower, not a leader. He will quit when the going gets really tough,

But hey I could be wrong. It’s just not very likely that a leopard who can’t count can change his spots. Time will tell.

-Fred Conquest is a professor of anthropology at the College of Southern Nevada and was a candidate for governor in the 2010 Nevada Democratic Primary.

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3 Comments

  1. Trouble is, we can’t really raise taxes right now – we’re losing population and even a slight increase in taxes will drive more business out of the State. We’re just going to have to cut spending – while police, fire, health care and education must take priority, all departments of government will have to be cut, and some eliminated.

    This isn’t going to be easy – in fact, it will be extraordinarily painful, both at the State and federal level..but we’ve spent ourselves in to utter bankruptcy, and there is no other way out.

  2. Thanks for the comments. Mark, do you think that businesses that don’t really pay any taxes, like Wal-Mart, could afford some sort of revenues tax? We are one of the few states that does not have one, and many very large corporations from out of state don’t contribute their share to our community. The workers do via sales tax. I just think it is inequitable.

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