The Fiscal Cliff: No Solution Will Be Easy - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

The Fiscal Cliff: No Solution Will Be Easy

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It seems almost all the talk out of Washington, D.C. these days is how to avoid the so-called 'Fiscal Cliff' - a combination of expiring tax cuts and spending cuts set to start January 1st.

State officials are already planning ahead for what it could mean in terms of impacts here in Nevada. According to the Tax Foundation, taxes would likely jump 4.8% for the average family of four. That equals a $3,200 hike.

State Treasurer Kate Marshall says she already has a two-page list of cuts that will need to be made in Nevada if the Feds can't come to an agreement.

"HeadStart alone would take a $2.3 million cut. It would lose 77 workers and 371 kids would be left out of the program," Marshall says. "We are talking millions in cuts and hundreds of jobs cut from the federal government. That means that if the programs are mandated, the state has to pay for them, and all of the states are already strapped."

University of Nevada economist Mark Pingle says there are no painless ways to fix the situation. "I almost think of the cuts and the tax hikes as fiscal chemotherapy. It's tough medicine but we have to do something drastic to get back on track. There is no easy way. There will need to be higher tax hikes than they are talking now, and deeper spending cuts to bring the budget into line. But it has to be done."

The only way to stop it now would be a compromise in Washington, D.C. before the end of the year. And while most think there will be one, at least eventually, Pingle says he doesn't think it will happen until after the first of the year.

Written by Erin Breen

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