Politics & Policy

Rory Reid Has Plan to Balance NV Budget Without Tax Hike

Democratic candidate for governor Rory Reid today released his long-awaited budget plan. In keeping with his promise not to raise taxes, the headline on the press release reads, “Rory Reid introduces plan to balance Nevada’s budget without raising taxes.”

It’s notable that a Democratic candidate is putting forward a plan that avoids tax increases, and Reid’s suggestion to merge and consolidate state agencies is a good one. Still, some questions need answering.

First, the plan assumes there will be $615 million in higher revenues during the second year of the biennium based on expected May projections. Geoff Lawrence, a fiscal analyst at the Nevada Policy Research Institute, warns that “the governor, by law, is constrained to using the December Economic Forum projection when constructing the executive budget. … He’s legally prohibited from ‘inventing’ new money.”

Second, the plan cites $200 million in savings from so-called “public-private partnerships.” These require explanation.

Third, Reid takes $68.3 million from programs outside the General Fund. “[H]ow will these [other] programs receive funding?” asks Lawrence.

Fourth, implementation costs are missing throughout the proposal. For example, Reid has an ambitious goal of cutting Medicaid fraud in half but does not specify how he will do so.

Fifth, Reid assumes he will collect $9.2 million more from delinquent tax payers by linking tax records to motor vehicle registration and driver’s license records. The proposal mentions that the state of Delaware did this and increased collections by $6 million. But Delaware was collecting delinquent income taxes; Nevada has no state income tax. To which taxes is Reid referring?

Finally, the proposals to replace paper checks with e-payments and to use a web-based payroll and time management system seem redundant based on systems already in place.

And ironically, Reid, who slams Governor Gibbons for the state’s financial hole, bases a number of his ideas on recommendations by the SAGE Commission — a body that Gibbons created.

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