Nevada

State Budget Practice Report Cards and Budget Resource Guide

In the five budgetary categories evaluated for fiscal 2016 through 2018, Nevada received a combination of C and B average grades, never ending up at the top or bottom. 

The state’s C average in budget forecasting stemmed from its failure to provide multiyear forecasts of expenditures or revenues. Since its dependence on revenue from tourism, gambling, and minerals creates a volatile income stream, long-term projections might be particularly helpful for planning.

Nevada’s pension funded ratio of only 74.4 percent as of 2017 contributed to its three-year C average in legacy costs, as did its lack of adequate annual funding for other postemployment benefits, primarily health care. 

In the reserve funds category, Nevada earned a B average. It missed getting an A because it does not tie its rainy day fund policies to revenue volatility—a best practice followed by nineteen states in 2018. 

The state received B averages in budget maneuvers and transparency. Its budget maneuvers mark resulted from its shift of governmental services tax dollars to the general fund. For example, in fiscal 2016, $66.7 million was transferred to the general fund from the highway fund. The practice continued in fiscal 2017 and was to end in fiscal 2018, but the governor’s budget moved $19.2 million to the general fund that year.

The transparency mark reflected Nevada’s lack of disclosure of deferred infrastructure replacement costs. The state received credit for having a consolidated budget website, but some financial information, including the debt capacity report, proved difficult to find.

Download Printable State Report Card

To emphasize the need for clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability, the Volcker Alliance in 2016 began a study of budgetary and financial reporting practices of all fifty states. The Volcker Alliance’s mission is to improve the effectiveness of the administration of government at all levels. Making state budgeting more transparent and accountable is an important part of that goal.

The report cards presented here are taken from the 2018 Volcker Alliance report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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