The concept of transitioning from a "debt to fund services" system is really simple. It is equivalent to a person deciding to stop using their credit cards to purchase products, goods, and services, and instead, paying cash.
When government first started up, it had no cash on hand. So governments had to borrow money to fund services, and then tax the people so that it could pay back the money it borrowed, with interest. This system became a never ending cycle.
Even today, Government officials establish a line item budget, and then borrows money to fund all of the budgeted line items (Services, Personnel, Product Purchases, and Projects). After Government expends the money for each line item, using the money it borrowed, Government taxes individuals and businesses to raise revenue so that it can pay back the money it borrowed, with interest.
The interest is called "debt service."
Thus, if the budget is $10 billion dollars and the Debt Service (interest ) is 10%, then a billion dollars of the taxpayer's money is used to pay interest. That's $1 billion in taxpayer dollars that it's not used to provide fundamental service.
I propose, over a six-year period of time that we transition Nevada from a "Debt to fund service" revenue and expenditure system into a "Pay-as-you-go" revenue and expenditure system.
To accomplish that we will provide taxpayers incentive to pay their taxes well before the due date.
Taxpayers who pay at least 260 days early will pay 10% less than the actual assessed amount due, according to the normal schedule. That money paid early will go directly into our rainy day fund.
Because of the money accumulated in our rainy day fund, the bond rating agencies - Moody, Standard & Poor's, and Fitch - will assign Nevada a higher Bond rating. A higher government's bond rating is similar to an individual's high credit rating.
Therefore, even though we will give taxpayers 10% off, we will pay as much as 14% less to borrow money. Potentially, that will yield a net positive 4%.
After 6 years, we will have enough money in the bank to pay for our expenditures "as we go," rather than needing to borrow to pay for those expenditures.
Furthermore, the 10% we would have paid in debt service is now available for us to use to provide additional service to our residents.
This is one initiative that will enable us to tax less and do more.