Slowdown doesn’t affect government

Nevada workers got word last week of just how hard they’ve been hit by the current economic slowdown, driven in part by the collapse of the housing industry.

“Nevada’s hidden income tax, named the ‘Modified Business Tax,’ came up short of projections by $13 million over the three months ending Sept. 30,” reports state Sen. Bob Beers, R-Las Vegas, an accountant by training.

The business tax — supposedly levied against owners rather than workers, though this is money from their “cost of labor” column that never makes it into worker paychecks — is currently assessed at a rate of 0.62 percent of wages paid. “When you divide the $13 million shortfall by the tax rate, it turns into a half-billion dollars of projected wages that Nevada workers were not paid,” Sen. Beers notes.

However, because employees in financial service businesses (including banks) are taxed at a rate three times higher, “the actual amount of projected wages not paid Nevada workers is less than $500 million, but almost certainly well north of $250 million,” the senator concludes.

That’s a lot fewer presents under the tree.

Two sectors are doing better. Education — which is largely tax-subsidized in Nevada — was up slightly in October.

And then there’s government.

“None of the shortfall impacts government employees, of course,” Sen. Beers notes. “Not only do most government employees get a ‘step’ raise of 5 percent, they all get a cost-of-living increase. Even more startling, the Nevada Employment Security Department reports that in the month of October, government employment increased by over 5,000 employees (net of retirements).”

That NESD report shows construction industry jobs off by nearly 3,000 and employment services off by 4,000 for the period April through October. Even leisure and entertainment — strong through the summer — were down more than 2,000 jobs in October. No other sector showed the same kind of booming growth this fall as the “government” sector.

This isn’t a question of “misery loves company.” Few Nevadans harbor ill will toward individual school or other government workers.

But the reason the government sector is different is that it’s supported by taxes on all the other sectors. When the private sector is hurting, government agencies should be prepared to pare back rather than suck a larger portion of taxpayers’ life blood — the equivalent of some new injury further weakening a patient who’s already in an oxygen tent.

Yet all we seem to hear from our pampered bureaucratic department heads, these days, is that they can’t possibly make do with less. Taxes must be raised higher, ever higher, they cry. They can’t postpone their latest expansion schemes or confront the loss of a single “step” raise, perquisite, benefit or attendant.

It’s a bit reminiscent of the British officers sitting down to their traditional service of tea from silver salvers at Isandlwana in January 1879 — “Where are the cucumber sandwiches, and what do you mean there’s no sugar. It’s an outrage!” — oblivious to the fact that a Zulu army was about to pour over the ridge.