(Patrick R. Gibbons) – The Nevada state legislature meets next month to discuss the state’s budget shortfall and the future direction of the Silver State. Will the state continue the tax and spend model that created our massive budget shortfall or will our elected officials vote to use our scarce resources more effectively?
Among the more pressing issues is what to do about K-12 and higher education. The most vocal groups in Nevada have called for more spending. Unfortunately, state legislators will be subjected to hours upon hours of testimony from the “tax and spend” special interest groups.
One excellent example of misleading information from such special interests was the Lied Institute’s report “Nevada: Ranked 50th in Education?” Released in December and based on a roundtable discussion of forty leaders in Nevada, the paper concluded that in order to diversify and improve Nevada’s economy, the state must improve K-12 and higher education first.
Drawing from an old narrative that Nevada’s low-tax status won’t improve the economy, the paper argues that more taxes are necessary so additional investments can be made in K-12 and higher education.
The Lied Institute’s white paper points to several states for Nevada to emulate, including Utah, Arizona and North Carolina. According to the paper these states have generated an educated class of adult professionals that are helping to attract high tech industries (interestingly and conveniently, the report excludes Texas – a state with no corporate or personal income tax that is also attracting many high tech jobs).
The Lied Institute’s conclusion sounds plausible, but when you examine the facts the Lied study was specious at best.
First, it is a myth that Nevada is a low-tax state. While it is true that residents aren’t taxed as much per-capita as in other states, Nevada’s total tax burden ranks 24th in the nation according to the left-of-center Brookings Institution.
Incidentally, Nevada collects more in tax revenue than Utah, Arizona and North Carolina – states the Lied study suggests we copy. Of Nevada’s regional neighbors, only California collects more in taxes per-capita than Nevada.
This leaves a very pressing question – if Nevada collects more than the states the Lied Institute suggests we copy, what exactly are our leaders doing with all that money?
Next, according to the latest data from the U.S. Department of Education, Nevada’s total per-pupil spending on K-12 education is higher than that of Utah, Arizona and North Carolina. When excluding capital costs and debt repayment, Nevada’s per-pupil spending is still higher than Utah and Arizona and just $1 per child less than in North Carolina.
Again, if these states are worth copying and spend less than we do, what are we doing with all that money? Embarrassingly the results are very similar with higher education.
According to the Delta Cost Project’s study “Trends in Higher Education Spending,” Nevada ranks 15th in the nation for per-pupil spending on higher education. Nevada spends more than Utah and Arizona, but less than North Carolina (by $515 per pupil). Interestingly, Nevada spends more per-pupil on higher education than Texas – the high performing, high tech state the Lied study ignored.
At best, spending more money won’t produce greater results. At worst, spending more money on institutions that have failed to use the resources effectively may delay Nevada’s economic recovery further.
Nevada’s elected officials will soon be inundated with pleas to increase spending, but they need to remember it’s not how much we spend that matters, but how effectively we use the resources that are already available.
Patrick R. Gibbons is an education and policy consultant in Las Vegas, Nevada