• About Us
  • Activity
  • Advertising
  • Books
  • Business
  • Contact
  • Dashboard
  • EB5
  • Entertainment
  • feedback
  • Forgot Your Password?
  • Government
  • Home
  • Home 20723
  • Interviews
  • Login
  • Members
  • Meme generator
  • National
  • Nevada
  • Nevada News and Views
  • Newsmax
  • NN&V Ads
  • Opinion
  • Pick a New Password
  • Politics
  • Polls
  • Privacy Policy
  • Profile
  • Recent comments by me
  • Recent comments on my posts
  • Register
  • Submit post
  • Subscribe
  • Subscription Confirmation
  • Survey
  • Survey
  • Terms of Service
  • Today’s Top 10
  • Travel
  • Travel
  • Travel
  • Welcome!
  • Yop Poll Archive
Nevada News and Views
  • About Us
  • Contact
  • More
    • Opinion
  • Facebook

  • Twitter

  • Pinterest

  • RSS

Opinion

Knecht & Lawrence: Nevada Taxes and Other Revenues: The Facts You Wanted

Knecht & Lawrence: Nevada Taxes and Other Revenues: The Facts You Wanted
Chuck Muth
January 11, 2017

Ron Knecht, Nevada State Controller

(Ron Knecht & Geoffrey Lawrence) – This is the second column in a series presenting the findings and conclusions of Nevada’s 2016 Popular Annual Financial Report, posted at controller.nv.gov.  Here, we address state revenues.

The tax and other revenue figures reported in the PAFR and discussed here come from the actual numbers in the state’s official financial reports.  They are not estimates, future projections or budgeted or requested amounts.  Just the actual revenue numbers from state books and records.

Geoffrey Lawrence, Nevada Assistant State Controller

In our previous column, we concluded that Nevada has a spending problem driven by health and social services (HSS) and K-12 education outlays.  Over 2006-2016, total state spending grew 22 percent faster than the incomes of Nevada families and businesses, which are recorded in federal government accounts posted online.  So, state government spending has imposed an increasing real burden on Nevadans and our economy.

But where spending grew 22 percent faster than Nevadans’ incomes, state revenues – totaling $12.518 billion in 2016 – grew even faster, exceeding income growth by 26 percent.  Clearly, Nevada has a spending problem, not a revenue problem.  As discussed below, state “program revenues” grew 49 percent faster than Nevadans’ incomes, while tax revenues grew only two percent faster.

Program revenues include mainly federal government grants and contributions of $4.804 billion.  They have grown 102 percent faster than Nevadans’ incomes, and their growth comprises 62 percent of the growth in total state revenues over the last decade.  Much of these grants and contributions reimburse state Medicaid spending, food stamps and temporary assistance for needy families, all of which are also greatly driven by federal mandates.

A key fiscal risk for the state is that some federal grants are set to decrease in coming years, but related federal spending mandates generally do not decline on a compensating basis.  Hence, Nevada will have to supply tax revenues to cover the shortfall in federal support.

Other program revenues, $1.065 billion, derive from charges for services (both governmental and business-type services) and from grants and contributions to state business-type activities.  Revenues for these three categories grew 14 percent slower than Nevadans’ incomes.

The final part of program revenues, $1.211 billion, comes from (public and private) grants and contributions to the Nevada System of Higher Education (NSHE), plus charges for services it collects.  This total rose 33 percent over the last decade, or five percent faster than Nevadans’ incomes.  This reflects the fact that NSHE has increased tuition, fees and charges for services to offset the state’s reductions in general-fund support.

The remaining state revenues include $5.135 billion in taxes and $303 million in miscellaneous items, together totaling 44 percent of total state revenues, as compared to the 56 percent supplied by program revenues.

The burdens of state taxes on consumption (instead of savings, investment and employment) and on persons (instead of businesses) declined over the decade.  Declining taxes include large levies on sales and use and gaming, plus lesser taxes on property, motor and special fuels, liquor and tobacco, and minor items.  To the extent taxes must be collected, they are best levied on consumption and individuals.

To compensate for those declines, the state added new levies and increased taxes mainly on savings, investment, and employment and on businesses, mainly via the modified business tax, the new commerce tax, and unemployment assessments (driven also by federal mandate).

The shift of tax burden from consumption to investment and employment and from individuals to businesses diminishes tax neutrality.  Neutrality is important because maximizing economic growth and fairness requires that taxes affect as little as possible the spending-versus-savings, investment and employment decisions people would make without the taxes.  The choices they would make in markets without taxes would maximize economic growth and thus human well-being and fairness.

The burden shift also diminishes transparency because businesses don’t so much pay taxes as they collect them for the government from consumers and from employees via reduced pay and employment.

There’s one spot of good news.  With eleven taxes each accounting for three percent to 24 percent of general revenues, and with their burden resting mainly on persons and consumption, Nevada’s tax base is reasonably diversified.  Diversification helps balance revenue stability and the restraint that limited revenue growth should place on state spending.

 

Ron Knecht is Nevada’s State Controller. Geoffrey Lawrence is Nevada’s Assistant State Controller.

Prev postNext post

Related Items
Opinion
January 11, 2017
Chuck Muth

Related Items

More in Opinion

Amodei Statement on Debt Ceiling Bill

Chuck MuthJune 1, 2023
Read More

Tark: Trans “Rights” … and Wrongs

Chuck MuthMay 26, 2023
Read More

Stone: The Truth About AB 250: Will Patients Really Benefit?

NN&V StaffMay 26, 2023
Read More

“Ungrateful Miscreants”: Miller, Segerblom Insult Local Small Business Owners

NN&V StaffMay 24, 2023
Read More

Quarter-Million Dollar Ad Campaign Targets Nevada Legislators for Trapping Hispanic Families in Unsafe Schools

NN&V StaffMay 22, 2023
Read More

Nevada News & Views: May 20, 2023

NN&V StaffMay 20, 2023
Read More
Scroll for more
Tap

Subscribe Free By Email

Looking for the best in breaking news and conservative views? Let Chuck do all the work for you! Subscribe to his FREE "Muth's Truths" e-newsletter.

* indicates required
Nevada News and Views
Nevada News & Views is an educational project of Citizen Outreach Foundation, a non-partisan IRS-approved 501(c)(3) organization. It is not associated or affiliated with any political party or group. Nevada News & Views is accessible by the public at no cost. It funds its operations through tax-deductible contributions from donors and supporters and does not accept government money or grants.

TAGS

Featured Article Muths truth

Copyright © 2023 Citizen Outreach | Maintained by VirtualAlly

Muth’s Truths: January 10, 2017
Joecks: School district’s bill proposals highlight hypocrisy on regulations