Sunday, May 8, 2011 | 2:01 a.m.
In legislative testimony from every region of Nevada, fellow citizens have offered stories of their personal economic struggles, and those of family members, friends and neighbors. The loss of a job, foreclosure on a home, the struggle to meet a payroll, the challenge of rising tuition, the inability to make ends meet at home — these situations are all too familiar to Nevada families.
In recent years, Nevada has faced some of its most difficult days. In large part, because of long-standing issues with our tax code, an over-reliance on an economy focused on gaming and mining, and our failure to invest in education, Nevada has suffered the Great Recession more acutely than nearly any other state. For these same reasons, our climb back to economic growth has lagged behind most states.
As the current legislative session approached, I hoped our state’s political representatives would set politics and ideology aside, and then find a balanced solution to address Nevada’s many challenges — a solution that would position Nevada for long-term success. I asked the governor and legislators from both parties to join me in an adult conversation, and to consider every option at our disposal. Unfortunately, politics and ideology continue to hinder an open dialogue.
In a continuing effort to find a responsible middle ground, the Democratic budget proposal introduced this week offers a balanced approach that includes significant budget cuts as well as new sources of revenue. And, most important, it positions Nevada for success, reforming our 1950s tax code to promote job creation and build an educational system and workforce for our 21st-century economy.
To design a leaner, more efficient, fair and stable state government, Democratic legislators examined Gov. Brian Sandoval’s budget proposal in detail. There are many aspects of his proposal with which we agree, and we applaud his desire to return prosperity to Nevada.
This same budget, however, imposes extreme cuts to K-12 schools, higher education and senior citizen programs. The governor’s budget does little to promote job creation or attract new industry, and it fails to address the state’s systemic fiscal challenges, leaving Nevada prone to an ongoing cycle of “boom and bust.”
So Democrats looked for new ideas. We met with business leaders, teachers, small-business owners, parents, students and experts. Their concerns informed our planning as we looked at budget models in other states and considered how to adapt best practices to fit Nevada. In the end, we incorporated the best ideas from all these individuals and groups into our budget proposal.
Our approach updates Nevada’s outdated tax code, creating a fair and stable system. It broadens the sales tax to include some services, but lowers the overall tax rate.
For example, the current modified business tax hurts small business and hampers job creation. We replace this tax with a more stable margin tax, modeled on successful efforts in several states. These changes will encourage job creation, protect small businesses and lower the sales tax that Nevadans pay everyday.
It will take time, however, to implement these changes and generate the revenue we need to fund vital services. For this reason, we propose an extension of the sunsets on the room tax for two years.
The Democratic budget proposal provides funding essential for much needed education reform. It restores funding for full-day kindergarten and career and technical academies. Unlike the governor’s proposal, this budget does not rely on the seizure of school capital funds or the need to borrow against future taxes. Furthermore, the Democratic budget proposal requires significant cuts, but it also ensures funding for teacher “pay-for-performance” and advanced degree attainment.
In higher education, our proposal calls for a budget cut of approximately 10 percent. But it restores funds needed to continue core university and college programs, and keeps campuses open across the state. Similarly, this proposal requires cuts from health and human services, but restores adequate funding for autism treatment, ambulatory medical and triage centers, and senior citizen protective services.
To be clear, this budget approach requires a significant reduction in total spending from 2009 levels, and tough cuts are recommended. It is not a perfect solution. It will, however, set us on a responsible path toward stability and economic growth.
After all that Nevada and its citizens endured in this devastating recession, now is the opportunity to make lasting, systemic changes to improve our budget process and the quality of life for current and future generations. As Nevadans, we are blessed with the courage and ability to face our challenges directly and without fear. We have the determination and drive to reinvigorate our economy and prepare our children for success in the years to come.
Commitment and innovation from our state’s political leaders will provide future generations with the tools to educate our citizens, diversify our economy, protect our senior citizens and create a new Nevada.
Steven Horsford, a Democrat from North Las Vegas, is majority leader of the Nevada Senate.