State Budget Practice Report Cards and Budget Resource Guide
Tourism is Nevada’s lifeblood, with 18 percent of general fund revenues generated by gaming and 29 percent from sales taxes. With no guarantee that gamblers will flock to the state every year, Nevada would benefit from a policy that accounts for revenue volatility in the funding of its rainy day fund, the Account to Stabilize the Operation of the State Government. But it doesn’t have such a policy, and the lack of attention to volatility in managing the rainy day fund limited the state’s average reserve funds grade to B for fiscal 2015 through 2019. Even so, Nevada steadily increased funding of the reserve. It was empty in 2015–2016 but rebuilt to $304 million by 2019, equivalent to 6.9 percent of general fund expenditures.
The state averaged a B in budget maneuvers, generally shunning one-time actions to achieve balance save for transfers of money from special funds to the general fund.
Nevada averaged a C in budget forecasting because it provides a revenue and expenditure outlook that covers only the years of the biennial budget. In legacy costs, the state improved public worker pension funding practices during the study period, making actuarially determined contributions in 2016–19. That was not the case with other postemployment benefits (OPEB), primarily health care, which were not funded along actuarial lines for the entire study period. As a result, Nevada’s average grade in the category was held to a C. The pension funding ratio was 76 percent in 2019, 5 percentage points above the total for all states.
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 2015 through 2019. 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.