Tuesday, December 22, 2009

Dear Government of the State of Nevada: here are some revenue-raising ideas

Dear Government of the State of Nevada:

As Nevada slips ever further into a budget deficit, and the Governor seeks proposals for up to 10% cuts from state agencies (see here), it's time to consider options for raising revenue, rather than simply cutting further. Some combination of revenue-raising and cutting may be in order, but if we persist in the Governor's cut-only plan, we're going to ruin any hopes for economic recovery.

Here, then, is my list of proposals to help Nevada through this crisis. I'm no genius, and I don't make any claim that my ideas are the best ones out there. I just want to start the ball rolling.

1. California's loss can be our gain, part 1. Both today's New York Times (here) and the Wall Street Journal (here) report that Sen. Dianne Feinstein wants to protect more than one million acres of the Mojave Desert from being used for solar power. Hey, we have desert land--lots of desert land. And even though most solar power uses a lot of water in its processing, there are technologies out there that use less water (see, e.g., here). Why don't we consider becoming the nation's preeminent source for solar power? (Of course, we'll need to build ways of transmitting that power, or it'll be useless. But wait! That will . . . create jobs.)

2. California's loss can be our gain, part 2. California's going through an unprecedented economic crisis, and among other problems that it's facing is the draconian budget cut of its flagship university system (see here). Take a look (here) at what the UC system has achieved, even during a financially disastrous year. I'll bet that some professors in the UC system might be open to coming to Nevada, if Nevada would be willing to invest in what makes professors happy: money to do research, money for travel, money to support students. In the "it'll take spending some money to make money" category, investing in luring some top brains to Nevada--especially if Nevada leverages the new relationship with the Brookings Institution and UNLV (see here)--could create a think tank to solve problems (and . . . create jobs) out here in the desert.

3. McCarran is a good airport, so why isn't Las Vegas a shipping center? When you think gateways, do you think Memphis? (See here.) FedEx did. I like Memphis as a city--loved visiting Graceland, love the music scene--but Las Vegas makes perfect sense as a business-friendly shipping hub. Heck, we're suffering so much economically that if we could give a nationally based business some decent tax breaks, there would be a reason for that business to come here. Oh, and that would . . . create jobs.

4. Go easy on the tourist industry, and make the tax base more even. In a great interview (see here), UNLV Prof. Mary Riddel has pointed out the danger of being a single-industry town. Well, Las Vegas seems to be a single-industry town, and Nevada sure seems to be a single-industry state. And that industry is based on attracting people with discretionary income--income that's increasingly rare these days. Raising the costs for tourists to come here by, say, increasing taxes on them, is not helping our single industry. What would happen if we lowered those taxes, while replacing that lost income for the state by a smaller, broader-based tax generally? I know that increasing taxes is anathema for Nevada politicians, but Albert Einstein (as usual) was right: insanity is doing the same thing over and over and expecting different results. Refusing to reconsider our state's tax system and expecting to come out alive from this recession are mutually exclusive actions.

5. Don't get me started on how many different ways Nevada has gotten Yucca Mountain wrong. (See here.) Here's a riddle for you: why is it safe to store nuclear waste above ground in every other state but not even reasonable to consider storing it on and near the Nevada Test Site (one of the most contaminated areas in North America)?

6. Don't cut the budget across the board. Think about budget cuts this way: when you're facing a personal budget problem, do you cut everything by 10%, or do you figure out which parts of your budget are discretionary and which parts are necessary, so that you can leverage your cuts for the maximum effect? Smart people don't say, "Hmmmm. I need to cut my food intake by 10%, my housing by 10%, and my entertainment budget by 10%." Smart people keep the necessary spending and jettison the discretionary spending.

7. Find a group of smart volunteers who aren't dependent on re-election to do some of the heavy lifting for the politicians. I get it: politicians really can't make the hard decisions, because too many voters have short memories and will resent economically expedient measures if those measures affect their own interests. (Don't gore my ox!) So why can't politicians gather together some smart Nevadans--especially those who own small businesses, the mainstay of any economy--to provide good ideas and political cover? Again, I'm not the best person for the job, by any means, but I'd sure be willing to help if asked.

I keep using the quote that Michael Douglas said in The American President (1995): "We've got serious problems, and we need serious people." We don't need partisan politics; we don't need grandstanding. We need smart people of good will who want to make Nevada thrive. I know that there are such people in our state's government, and there are such people in our state generally. Let's use those brains and, to quote the great Gene Kranz, as played by Ed Harris in Apollo 13 (1995),* "Let's work the problem, people. Let's not make things worse by guessing."

*Wow. 1995 sure was a good year for movies.


Anonymous said...

All your ideas have a part to play. But even collectively they lack critical mass. Nevada's problem is psychological. You got close to it when you brought up Einstein. First, this state needs an exodus of low skilled workers who need to find low end jobs elsewhere. We can't support them anymore. Secondly we need an immediate, and I mean immediate overhaul of the way gaming and mining are taxed. Like, uh....they need to be taxed. Gaming pays 6.75%. Most Nevadans would love to be taxed at that low rate. And big mining, one-half percent. That's criminal! The money's here to retool Nevada. We have to psychologically prepare ourselves to embrace the number one rule of taxation (public investment), go where the money is! Until we do, (and stop electing politicians who protect them) we're just nickel and diming ourselves down the rat hole of history.

Nancy Rapoport said...

Thanks, Anonymous--and how can we get the government to start listening to us?

Taylor said...

On solar power, last session the legislature lifted a number of regulations regarding solar power and paved the way for exactly what you're talking about.

On the "volunteers" to do the heavy lifting, last session the legislature created exactly that. But just like everything else, it's become political and will probably be ignored next session. Especially if they come back and say we need to raise taxes.

The problem isn't entirely the politicians, it's the voters. Voters elected Jim Gibbons, voters elected people like Ty Cobb and Christenson who don't contribute one bit to the process. Voters approved the term limits, which in my opinion will cripple this state and make it dependent on the executive and the bureaucracy instead of freeing it. Voters also approved the 2/3rds requirement on raising taxes which, like California, makes it impossible to do just that.

If you really want to help fix some of the problems in this state, instead of writing about what has already being done, get the ball moving on a full out constitutional convention. There is so much crap in our state constitution that it's impossible to run the state. We need an overhaul that will change the constitution from being a toy in the political game to a foundation for our state government.

Aside from that, get a petition going to get rid of the 2/3rds requirement. That'll fix most of our problems. And for the sake of the state's future, work to get that idiot in the Governor's mansion out of office for good.