More money rolling in

State spending set to jump

State lawmakers received a nice big box of cash last week, all wrapped up and topped with a bow just in time for the holidays. On Tuesday, the state Economic Forum projected that state tax revenue for fiscal 2017-18 will increase 7 percent over the previous biennium to $7.9 billion. “We appear to be on a fairly positive and hopefully sustainable growth path,” said Ken Wiles, chairman of the five-member appointed panel.

The board, which is appointed by the govenor, foresees both sales and gaming tax revenue rising by more than 5 percent as well as healthy growth from other sources such as the entertainment tax and the new modified business tax.

All in all, the state will have an additional $541 million to play with during the next legislative session. Translation: Brace yourself for a spending spree when lawmakers reconvene in February.

The Economic Forum was created more than 20 years ago as a way to insulate lawmakers from the politics inherent in revenue estimates. The board’s binding projections, which involve analysis of economic and demographic trends, provide the parameters for the state budget, which must be balanced according to state law.

Not surprisingly, the probable increase in tax collections isn’t enough to sate an insatiable bureaucracy. State agency budget requests — let’s call them “wish lists” — exceed the projected revenues by as much as $600 million, the ReviewJournal’s Sean Whaley reports. Of course, it’s unlikely the entire U.S. Gross Domestic Product could fund every government budget request.

In addition, the governor’s decision to take the federal cash and expand the state’s Medicaid program will likely eat up a large chunk of any new revenue. Enrollment numbers are running beyond expectations and the state’s financial contribution to the program will soon increase.

But as Nevada puts the depths of the Great Recession behind it, let’s hope lawmakers have learned the value of caution. The tendency to ramp up outlays during the good times — creating new spending programs that become entrenched in the budget — has periodically left the state in financial straits that could have been avoided through planning and prudence. The Legislature must strive to foster a regulatory and tax climate conducive to economic advancement.

And remember, when you hear the inevitable cries of poverty emanating from Carson City, that state spending — while flat or actually declining during the national downturn dating to 2008 — has more than doubled in little more than 15 years and is on pace to continue soaring upward.