Nevada Revenue Projections Look Bleak
From the Review-Journal, a jaw-droppingly obvious article. Nevada has no state income tax, so revenues depend heavily on property taxes. It's a pretty sweet deal if you don't own any property, and especially if you don't stay or play at casinos (another huge source of tax revenue).
So what happens when the housing market precipitously declines? Simple: tax revenues decline precipitously. Duh.
The article doesn't mention that Nevada, and especially the Las Vegas area, had one of the largest real estate booms in the country within this past decade, which means for several years, the government was absolutely flush with unexpected cash. Rather than figuring out that markets are cyclical, and that what goes up must come down, and maybe we should save some of this or even give a tax refund, they jacked up government spending in all areas. That little tidbit is critically important to know when reading this sentence:
Forum members expect to see significant declines followed by modest gains in tax
revenues during the coming years that throw Nevada back to the level of state
tax receipts collected in 2004-05.
Which was exactly at the very top of the market. So even if the government manages to cut spending to stay within projected revenues, all they are losing in spending is stuff they shouldn't have increased in the first place.