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Las Vegas, NV – Nevada's half-billion-dollar budget problem is good for something: It puts the state first in line. According to a new report from the Center on Budget and Policy Priorities, if Congress decides to provide economic stimulus to the states and targets that funding based on state-by-state need, Nevada should step to the head of the queue. The CBPP report considered total employment numbers, home foreclosures and food stamp data to determine which states are most in need of help from Uncle Sam.
And with fears of the "R-word" -- recession -- now slowing the economy, lawmakers in Washington may be more inclined to send economic relief to the states. Report author Jason Levitus with the Center says 27 states are definitely in need of relief right now, and the state most in need is Nevada.
"Factors really outside of the states' control -- poverty, employment and the housing crisis -- are what in fact are driving the budget deficits in these states. That's why the federal government can feel okay about stepping in now and helping them out."
The report adds that targeted relief to these states makes sense, because without that money coming in, states like Nevada will have to raise taxes or cut expenditures in key areas such as health care and education. Levitus says that would only deepen the nation's economic woes.
Housing foreclosures and the poverty rate as measured by food stamp use are two reasons Nevada ranks first in need. The state currently faces a half-billion dollar deficit (for the biennium), and Levitus points out that, like most states, Nevada can't borrow the way the federal government can in order to stimulate the economy.
"States can't do that; 49 out of the 50 states have balanced budget amendments. When their revenues slow, they have to start cutting services or raising taxes. That's exactly what you don't want to do. So the federal government, which has that power to borrow money, needs to step in and get the economy going and make sure that states don't need to be cutting services at the worst possible time."
Levitus says some states already have cut to the bone, and recent state headlines might be an indicator of what happens when that goes too far. For example, in southern Nevada, 40,000 people have been exposed to Hepatitis-C and HIV,and early indications are that cutbacks in funding for state health inspectors may have been a factor in that.
The full report is available at www.cbpp.org.
