Urban Institute Ranks Nevada’s “Expenditure Need” Low
April 21st, 2008The Urban Institute is a “non-partisan think tank” (doesn’t everyone claim to be?) that has published a comparative study of the 50 states, looking at each state’s revenue capacity, expenditure need, and overall level of fiscal capacity. The link is to a PDF file that includes the entire 90-page report.
The study defines a state’s expenditure need as
the amount that a state would have to spend on its residents to provide services on par with the national average. Expenditure need is calculated across seven broad spending categories, and state amounts can differ based on differences in population or other factors. For example, all other things being equal, a state with a large percentage of its population between the ages of 5 and 18 has a higher need for spending on education than one with fewer schoolage children. A state with a high expenditure effort spends more than its expenditure need.
The interesting part of the report is that Nevada’s “expenditure need” was fourth from last (see chart on page 71). Places like Mississippi, Alabama and Louisiana topped this chart. And this was using data from before Nevada’s record tax hike in 2003 and spending splurge that took place in the years right after the study.
This study would seem to indicate that Nevada has shifted from a low-tax-and-spend state to a little above average over the past couple of decades, although some advocates cling to the past in an effort to increase taxing-and-spending even further.
April 26th, 2008 at 5:23 am
Hooray! Send this to Ralston, Buckley, Taxus and the Gov
to back up his position on no new taxes!
April 28th, 2008 at 9:07 am
Sen. Beers,
I took a look at this study and I think there are a few things you missed.
1. The Expenditure Need is based mostly on percentage of education-age children. The study shows Nevada to be low on school-age children as compared with the national average. That is the reason its “expenditure need is low.” It does not take into account Nevada’s crumbling infrastructure or rapid growth. Nevada has added hundreds of thousands of school-age children in the last decade (the study only goes up through 2002) and I don’t think anyone can argue that our schools are overcrowded.
2. I think the most telling thing in the report is that Nevada’s revenue capacity (as in the amount that could be taxed) is ninth in the nation, but our revenue collection (the amount we actually tax) is 43rd.
Don’t you think with all the traffic congestion, overcrowded schools and growing budget crisis, we could afford to move up a couple of slots? After all, all we’d get for the additional tax revenue is a better-managed state government and better state services.
I’m a fan of yours, Senator, but I think this report does not say what you want it to.
Tom