Where I Stand -- Mike O'Callaghan: Correcting past errors

HASTE MAKES WASTE and in the long run isn't good politics or good government. Seldom does a state legislature face a truly new problem, but it oftentimes sees the same problems over and over again in different forms. Usually the sure cure for most problems is plugging a hole that's wasting money, doing away with an unneeded program or providing additional funds to solve a problem which needs more attention.

The 1975 Nevada Legislature had to deal with an unemployment rate that was in double digits. This was the result of the OPEC oil embargo that affected tourism over the world. It made the state tourism staff and every casino owner work overtime to assure Californians they could get a full tank of gas to return home after a weekend of fun. Little could be done about the big picture, but when that was straightened out on the economic wall, the financial health of Nevada was back in shape for the 1977 Nevada Legislature.

During the past decade, several problems have appeared in different forms. There was the financial hole dug by the people handling the state's industrial insurance program and later a dip in state revenues that resulted in cutbacks in mental health programs and the freezing of state employee wages and hiring.

This latter problem encouraged the creation of an Economic Forum of experts to "accurately" predict incoming revenues. Evidently they weren't too accurate because again we have a hiring and wage freeze for state employees. However, don't be surprised if their most recent $140 million shortfall prediction isn't quite that bad. Of course when the extra dollars are uncovered, there will be 63 legislative porkers ready to grab it before the state employees are given a pay raise or dollars go to service programs.

There just aren't any quick fixes when it comes to tax problems. The last time Nevada tried a quick turn in taxing, the so-called 1981 Tax Shift was soon called the 1981 Tax Shaft. The Legislature rushed it through to prevent a California-style tax revolt that state voters passed in the form of Proposition 13. Because of much whining about Nevada property taxes, even though they were some of the nation's lowest, the legislators shifted the tax burden over on to gaming and sales tax receipts. The results have been a boom and bust of tax revenues much like the mining industry which has left behind Nevada ghost towns, but the extracted gold and silver helped build cities like San Francisco.

The 1981 Tax Shift has created revenue instability for the state and almost every session since that time patches have been added to stop some of the bleeding. Many astute legislators have recognized the problem, but have feared to move away from reliance upon taxes that on the surface are "painless" for their constituents. Although some previous studies warned against the kind of action taken in 1981 and more recent reports have explained the resulting problems for not listening, little has been done to correct the situation. Wisely, the new governor, Kenny Guinn, is willing to review the tax situation, but he's not willing to jump in and make changes until he knows the correct solutions. He says that the 2001 Legislature will be given a tax package it can use to make the Silver State revenue picture more stable. Another quick fix isn't the answer to our state revenue problems.

There are some problems that can't wait for a study and among them is the $26 million shortfall in the state self-funded health plan that covers 47,000 people. What used to be excellent health coverage has collapsed and six weeks ago the cost for family member participation was increased 23.7 percent and benefits have been reduced. Putting this on the backs of state employees, who are already underpaid when compared to Nevada city and county employees, without any pay increase and less job security is unconscionable.

This is but one immediate issue on the minds of the people writing letters to me. Charles D. Musser, a victim of the failed health system, has taken time to offer suggestions on how it can be fixed. During the coming days his suggestions will be published in the Sun. Like most solutions that work, Musser's ideas are simple and unvarnished. In the meantime, the 1999 Legislature must move to save a program that, like the industrial insurance program in the 1980s, which dug an even deeper hole for itself, has been allowed to deteriorate.

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