State budget face-off

A $121.5 million deficit in state income may mean hacking services that affect us all

Brother, can you spare $121.5 million? Nevada’s expected budget shortfall may leave the state with its hat out for handouts.

Brother, can you spare $121.5 million? Nevada’s expected budget shortfall may leave the state with its hat out for handouts.

Photo by David Robert

Joanie, a teen daughter of a Reno businessman, needed help for her drug problem. She wanted help. And her family wanted her to get treatment.

She didn’t get it.

“She needed residential treatment, and we had no beds,” said Denise Everett, executive director of Sagewind, a Reno substance abuse program with a four- to six-week waiting list. “I couldn’t tell you the last time we had a free bed.”

The Sagewind staff tried to help Joanie (not the girl’s real name) with their extensive outpatient program. But that wasn’t a success.

“She needed more structure,” Everett said. “She’d continue to see her friends, continue to see her dealer.”

That’s how Joanie ended up in trouble with the police. That’s how Joanie ended up in a youth detention facility in Southern Nevada. In the end, the state spent much more to punish Joanie than it would have paid to help her.

“If we had been able to provide what she needed when she needed it, it wouldn’t have ended up costing taxpayers so much,” Everett said.First, let’s get something straight.

Despite the need—Nevada is one of the worst states in the nation when it comes to substance abuse treatment, even though we have one of the highest ratios of substance abusers—Sagewind didn’t ask the 2001 State Legislature for any additional funding. Everett knows the facility needs expansion, but that’s not even on the table. Instead, Everett worries that the center may not be able to continue services at the present level.

“My fear is current funding levels could be cut,” Everett said. “Historically, when there’s been a budget shortfall, [legislators] go after human services. It’s that big, silent, disenfranchised community.”

Everett’s tension is shared by many local agencies that provide services to the disabled, women, minorities, substance abusers and impoverished workers. When economists recently forecast that Nevada’s income over the next two years may actually be $121.5 million less than what the governor budgeted, many groups started shaking in their boots.

“We don’t know where they’re going to cut,” Everett said. “The largest part of the budget is education, and I don’t have problem with that. But second largest is prisons—it’s a whole industry.”

When the state runs low on money, whether the culprit is lower-than-expected growth in the gambling industry or troubled times for mining, it affects all Nevadans. Evidence of the impact shows up in a dozen ways, from education to the environment to substance abuse treatment to health care. And those who’ll pay the most are those who can least afford it: kids, disabled people, single moms and the working poor.

“When we talk about budget cuts and shortfalls, one of the things that gets left out is people,” said Tom Stoneburner of the Alliance for Workers Rights in Reno. “'Deficit’ is such a sterile word. My worst fear is that the most vulnerable people in the community will end up impacted by this sterile word.

“A shortfall or budget cut means an entirely different thing to people in the community than it does to people at the State Legislature. To workers, a budget cut can mean whether or not [they] have dinner on the table."Guinn’s budget, though one of the best human services budgets in recent years, wasn’t ideal, said political science professor Richard Siegel. The University of Nevada, Reno, faculty member is also the president of the Board of Directors for the ACLU of Nevada.

“The governor’s budget was more responsive to human services,” Siegel said. “It met the long-ignored 50-year gaps, being responsive on foster care, TANF [Temporary Assistance to Needy Family] grants and half a dozen other major human service issues.”

But if you look at the whole pie, Siegel said, the slice allotted to human services may have gotten bigger, but the education slice for kindergarten through 12th grade shrunk by 2 percent.

“I really cannot understand how a Legislature, with 70 percent of the legislators coming from Clark County, can fail to see the need to bolster K-12 in Nevada,” Siegel said. “I really think the governor expected the legislature to come up with new money for K-12.”

Shifting money from the counties is not a real solution, Siegel said. “Counties are ‘richer’ than the state, but they are not wastefully affluent.”

So how could the state possibly make a bit more money? Just say taxes. Or, actually, don’t say it. The ‘T’ word can get you shot in Nevada.But isn’t taxation an evil enemy of growth? If Nevada’s trying to attract new industry, we need to provide a friendly tax climate for start-ups and bigger businesses looking to branch out. Right?

“We are next door to one of the most highly taxed states,” Siegel said. “That gives us a dramatic cushion to work with.”

It’s not like Nevada needs to ask for a lot. When brave individuals bat around ideas like increasing the general business tax, the proposed rates have been “extremely low,” Siegel said. He doesn’t think the amount of money in question would make any business uproot and leave.

“It’s absolutely absurd that any business is going to pull up stakes and leave Nevada over the amount it would take to make up $100 million shortfall,” he said.

Also, the argument that big businesses, when taxed, merely pass on the extra cost to consumers doesn’t seem to play out, said Bob Fulkerson of the Progressive Leadership Alliance of Nevada.

“If I ever did go to Wal-Mart [in Reno], when I go over the state line to California, the cost of things is the same, even though the taxes in California are much higher,” Fulkerson said.

Businesses like Wal-Mart and Home Depot are coming to the state in “droves,” Fulkerson said. The businesses hire plenty of workers, but they pay barely more than minimum wage and offer few benefits. So when a part-time clerk gets sick and ends up at a local hospital, other residents end up, one way or another, paying those medical bills.

“We end up subsidizing these big retailers,” Fulkerson said. With this in mind, PLAN asked a Chicago think tank, the Center on Labor and Community Research, to take a look at how Nevada raises money and spends it. The goal, Fulkerson said, is to be able to propose some alternatives—like a progressive income tax that would mostly affect the wealthiest 2 percent of Nevadans—to those decades-old methods that may no longer work for the state.

Because Nevada could experience a billion-dollar shortfall during the next 10 years, Fulkerson predicted that budget disputes would dominate the political arena. Nevada’s not a spendy state. The budget is already “lean and mean,” he said, with little left to trim.

“There are going to be some huge changes. People should expect that," Fulkerson said. "We want to make sure that working-class and middle-class people don’t have to continue to bear the brunt of paying taxes. Not when you have the Steve Wynns of the state, who not only don’t pay taxes, but get tax breaks."