Nevada’s budget basics

According to the National Association of State Budget Officers (NASBO), Nevada’s total expenditures in fiscal year (FY) 2021 were $16.3 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Nevada’s combined state and local direct general expenditures were $25.3 billion in FY 2019 (the most recent year census data were available), or $8,177 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,161.

Nevada’s largest spending areas per capita were elementary and secondary education ($1,602) and public welfare ($1,508). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Nevada’s combined state and local general revenues were $26.2 billion in FY 2019, or $8,492 per capita. National per capita general revenues were $10,563. Nevada does not levy an individual income tax or corporate income tax but does have a gross receipts tax. (Census counts this revenue as either general sales tax revenue or selective sales tax revenue.) Nevada’s largest sources of per capita revenue were general sales taxes ($2,045) and federal transfers ($1,854). Nevada also collects a relatively large amount of revenue from taxes related to gambling. Census categorizes much of this revenue as amusement tax revenue. In 2019, Nevada’s per capita amusement tax revenue was $314 while the nation’s was $28.

Nevada’s politics

Governor Steve Sisolak, a Democrat, was elected in 2018 with 49 percent of the vote. The next gubernatorial election is in 2022.

Democrats control both the Assembly (26 Democrats to 16 Republicans) and Senate (11 Democrats to 9 Republicans). Control of the governor’s mansion and each house of the legislature gives Democrats a trifecta in Nevada. All Nevada Assembly seats are on the ballot in 2022 because members serve two-year terms. Senators serve four-year terms; roughly half the senatorial seats are on the ballot in 2022, and the other half will be up for election in 2024.

Nevada’s budget institutions, rules, and constraints

Nevada uses a biennial budget. The legislature must pass a balanced budget, but it can carry a deficit over into the following year. Nevada further limits both spending and revenue with a budget formula based on inflation and population growth. The rules are binding and require a legislative supermajority or vote of the people to override. A two-thirds supermajority is also required for all tax increases. The state also limits total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Nevada’s current budget

Governor Sisolak has not released a FY 2023 supplemental budget proposal (the state uses a biennial budget). He gave his state of the state address in February 2022.

Nevada enacted its FY 2022-2023 biennial budget in June 2021. The enacted budget included total spending of $23 billion in FY 2022 and $21.9 billion in FY 2023, and general fund spending of $4.6 billion in FY 2022 and $4.6 billion in FY 2023.

Under the American Rescue Plan, Nevada will receive $2.7 billion in direct state fiscal aid and $890 million in local government aid from the federal government. As of January 2022, Nevada had spent part of its ARP funds on refilling its unemployment insurance trust fund, education spending, and public health programs.

According to NASBO, Nevada’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

• FY 2021: $4.5 billion/$16.3 billion

• FY 2020: $4.5 billion/$15.1 billion

• FY 2019: $4.5 billion/$16.1 billion

For more on Nevada’s budget, see

• the Nevada Governor’s Finance Office,
  
• the Nevada State Controller’s Office,
  
• the Nevada Legislative Fiscal Analysis Division, and
  
• the Nevada Legislature Research Library.

Nevada’s economic trends

Nevada’s per capita income (per the Bureau of Economic Analysis) was $58,233 in 2021, ranking 28th among the states. It was below both the national average of $63,444 and the Far West regional average of $73,053. The state’s median household income (five-year estimate) was $62,043 in 2020, ranking 26th among the states and below the national average of $64,994. Nevada’s poverty rate was 12.8 percent in 2020 (five-year estimate), equal to the national rate of 12.8 percent.

Although Nevada’s averages tell a story about the entire state, Nevada is composed of diverse localities. For example, the city of Carson City’s median household income was $58,305, and its poverty rate was 10 percent; the city of Henderson’s median household income was $75,430, and its poverty rate was 8 percent.

Nevada’s unemployment rate historically tracks the national average. However, during the Great Recession, the state’s unemployment rate rose above the national rate. (See how COVID-19 is affecting state employment and earnings data.)

Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. In Nevada, the average unemployment rate in 2021 was 6.6 percent for white residents, 15.3 percent for Black residents, and 6.6 percent for Hispanic or Latino residents. (This is preliminary data. See the 2020 data for a more detailed breakdown of state unemployment rates by race and ethnicity.)

The major industries that contributed the most to Nevada’s gross domestic product (GDP) in 2020 were finance, arts and entertainment, professional services, government, and retail. Finance, arts and entertainment, and retail contributed more to Nevada’s GDP than they did to the nation’s and region’s GDP, while professional services and government were less important to Nevada than they were to the nation and region in 2020. Gambling is included under arts and entertainment.

Looking at more specific industries, among those that accounted for at least one percent of Nevada’s GDP in 2019, accommodation produced far more for the state than for the nation, contributing 9.6 percent to Nevada’s GDP and 0.9 percent to the nation’s. Other industries that overperformed in Nevada relative to national averages in 2019 were mining, food services, retail, and real estate.

Nevada’s demographics

As of July 2020, Nevada’s population was 3,138,259. That was up 16 percent from 2010. The state’s population growth rate was faster than than the nation’s 6.5 percent growth over the same period. The Urban Institute estimates the state’s population will increase 50.3 percent between 2010 and 2030, more than the nation’s estimated growth rate of 16 percent.

Additional resources

• The State and Local Finance Initiative’s Backgrounders explain the tax and spending issues highlighted in these briefs.
  
• The State Economic Monitor presents updated data and customized visualizations of state economic indicators.
  
• State and Local Finance Data: Exploring the Census of Governments allow users to sort, customize, and download the Census of Governments State and Local Finance series data featured in these summaries.
  
• The State Tax and Economic Review series provides quarterly reports on state tax collections and underlying economic trends in all 50 states.
  
• The Urban Institute’s State Tax Data Subscriptions provide access to up-to-date revenue data in all 50 states.