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.
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 found here contain grades of the state's budgetary practices during the fiscal years of 2016 through 2018. Each state received marks in five critical categories, based on their adherence to best practices in several key budgeting indicators. The five categories covered methods used to achieve budgetary balance as well as how budgets and other financial information are disclosed to the public.
States received grades of A to D-minus (there are no “failed states”) for their procedures in estimating revenues and expenditures; their use of one-time actions to balance budgets; how they oversee and use rainy day funds and other fiscal reserves; the adequacy of their funding of public worker retirement and other postemployment benefits; and the quality of transparency of budget and related financial information. The grades are based on research conducted by public finance and budgeting professors and students at eight US schools of public administration or policy. The universities’ research efforts were augmented by Volcker Alliance staff, data consultants at Municipal Market Analytics, and special project consultants Katherine Barrett and Richard Greene.
State Budget Sources
State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses is a resource published by the Volcker Alliance designed to help public officials, policy advocates, journalists, academics, and concerned citizens fully understand the critical fiscal decisions that governors and legislators must make. The guide includes the links below to budgets for this state as well as legislative analyses of budget bills and treasurers’ or comptrollers’ monthly state cash-flow statements; capital spending plans; reports on public-worker pension funding and returns; and reports by local and national fiscal research organizations, bond rating firms, and associations of state fiscal and finance officials.