Newspaper column: Nevada collects more per capita in taxes than 38 states, but spends less per pupil on education than 44 states

Cowboy humorist, philosopher and rope-twirling raconteur Will Rogers once said, “It isn’t what we don’t know that gives us trouble, it’s what we know that ain’t so.”

Well, everybody knows Nevada is a low-tax state. Ask anyone. Why our very state Constitution prohibits an income tax. Sure our sales tax is pretty high but tourists contribute more to the state coffers because of it. And this is the topic of this week’s newspaper column, available online at The Ely Times, Mesquite Local News and Elko Daily Free Press.

So surely it is understandable why the state agencies are poor-mouthing as the next session of the Legislature approaches, crying that the state needs to spend $1 billion more in the next biennium to just keep up current inadequate service levels. And that doesn’t take into account the $1.2 billion in temporary taxes that are scheduled to sunset next June, leaving the shortfall at a jaw-dropping, wallet-sucking $2.2 billion.

The big fear is that new Republican majorities in both the state Senate and Assembly will balk at raising or extending taxes.

For his part, Gov. Brian Sandoval has been coy on the topic of taxation.

Asked point blank by newspaper reporters about whether his budget might include new taxes, he replied, “You’ll find out.”

He told the editorial boards of the Reno and Las Vegas newspapers, “I have a unique opportunity, I feel, hopefully as second-term governor, going into the session and having the relationships I have with the Legislature to lead this effort in terms of looking at how we fund the state.”

As for the taxes set for sunset in June, Sandoval in both 2011 and 2013 agreed to extend them.

The state’s new Republican Senate Majority Leader Michael Roberson was quoted as saying at an education forum in Las Vegas recently, “We have really two choices. We can either reform our tax structure in a broad-based, fair way in collaboration with the community … in a way that generates more revenue. Or we’re going to be in a situation where we’re going to have to cut education significantly.”

Everybody knows Nevada already is a piker when it comes to spending on education and has the results to show for it with poor test scores and graduation rates. In fact, according to the latest Census Bureau data from 2012, Nevada ranked a pathetic 45th in the nation in K-12 education spending.

Since we’re perusing Census data already, how does Nevada stack up in that taxation department?

The most recent Census report on this is the “Quarterly Summary of State and Local Government Tax Revenue” from the second quarter of this calendar year, when Nevadans paid nearly $2.9 billion in taxes to the state, cities, counties and other taxing districts. Divide that by a population of nearly 2.8 million from the 2013 Census estimate and you find the per capita state and local taxation for the quarter was a little more than $1,000.

That was the 13th highest per capita tax revenue in the nation — 12th if you exclude the District of Columbia. Nevada collected more per resident than the presumptive high-tax state of New York. Thus, low-tax Nevada governments collect more per capita in taxes than 38 other states, but can’t seem to find as much to spend per pupil on education as 44 other states.

According to the Tax Foundation, Nevada’s average sales tax — state and local — is the 13th highest in the nation.

Nevada’s property tax rate is the 28th highest in the nation, according to Tax-Rates.org.

When you break down the revenue sources for Nevada elementary and secondary education as reported by the Census Bureau, you find Nevada ranked 47th in federal revenue. (Tell me again about how the U.S. Senate majority leader from Nevada is bringing home the bacon.) When it came to funding levels from the state, Nevada ranked 25th, but only 45th for local level funding.

Nevada ranked in the mid-40s in most education spending categories, but 22nd highest in spending on school administration.

The money is there, but apparently it is being spent on other things.

When it comes to government salaries, Nevada’s state and local governments have been able to keep up with others in the same taxation neighborhood. Admittedly, the most recent figures available from the Census Bureau are for 2009, but in that year the state of Nevada ranked 12th in the nation with an average monthly salary level of just more than $5,000. Local governments paid a similar salary level, and ranked sixth in the nation compared to local governments in other states.

The problem isn’t that Nevada collects too little in taxes. It is how it spends it.

Members of the Economic Forum on Wednesday release revenue forecast. (R-J photo)

But don’t expect any of this to be heard in the halls of the Legislature or inside the Capitol building.

They will just be talking about how the Economic Forum predicts the state will have “only” $6.3 billion to spend on the general fund in the coming biennium, if you discount those sunsetting taxes.

“Today’s Economic Forum report reminds us yet again that our revenue structure is not built to meet the demands of our changing economy nor our continued increase in statewide population,” Sandoval was quoted as saying. “Before I finalize and submit the state budget, I will ask my Cabinet to further scale back agency budget requests so that we can factor into account today’s projections.”

There’s never enough of our money to satisfy the avarice of the bureaucrats.

On the other hand Victor Joecks, NPRI executive vice president, released a statement that puts the revenue forecast in proper perspective:

Today’s Economic Forum revenue projections show why Nevada lawmakers do not need to consider tax increases during the 2015 Legislative Session.

The forecast of $6.3 billion in revenue for the next two-year budget cycle is the highest amount ever projected for Nevada. Combined with reversions of existing funds from agency accounts back to the general fund and other transfers, Nevada will be able to finance a spending plan comparable to its current $6.6 billion budget without raising taxes.

It’s important to compare the Economic Forum projection to Nevada’s historical levels of spending, not wish-lists from government bureaucrats.

The 2011 Legislature passed a budget of $6.2 billion, which included re-authorizing of supposedly “temporary” 2009 taxes the Sandoval administration had earlier pledged would sunset. Then, in 2013, lawmakers approved a general fund budget of $6.6 billion, which also included around $600 million in tax increases from the “sunset” taxes.

Taxed enough already?

States ranked by state and local government revenue per capita:

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7 comments on “Newspaper column: Nevada collects more per capita in taxes than 38 states, but spends less per pupil on education than 44 states

  1. Steve says:

    If I ever move back east, it will be to New Hampshah!

  2. Athos says:

    Implement another layer of administration to the CCSD, and give all the administrators a raise!!

    That’s the ticket!!

  3. […] Nevada collects more per capita in taxes than 38 states, but spends less per pupil on education than… Cowboy humorist, philosopher and rope-twirling raconteur Will Rogers once said, “It isn’t what we don’t know that gives us trouble, it’s what we know that ain’t so.” […]

  4. agent provocateur says:

    Reblogged this on Nevada State Personnel Watch.

  5. If it were that simple says:

    Quarterly tax revenue is subject to variation. A better measure is annual receipts. If you use the 2013 figures (http://www.census.gov/govs/statetax/), you’ll find that Nevada ranks much lower in taxes per capita.

    Taxes are only one source of government spending; for example, Nevada doesn’t have a lottery and is dead last in money from the federal government per capita. When you compare total state spending per capita, you’ll find that Nevada is near the bottom (usually around 45, see http://www.census.gov/govs/state/ ). Not surprisingly, that is also where Nevada ranks on education spending.

  6. Those appear to be state taxes only. Local governments are wholly owned subsidiaries of the state.

  7. […] we looked at the second quarter state and local tax collections per capita for Nevada compared to other states, and Nevada was 12th […]

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