By Ron Knecht and Geoffrey Lawrence
This column is the first in a series presenting the findings and conclusions of Nevada’s 2016 Popular Annual Financial Report, which we wrote and issued (online at controller.nv.gov) as part of the Controller’s office normal activities and duties. Here, we address state spending.
The spending figures reported in the PAFR and discussed here are taken from the actual numbers from the state’s official financial reports. They are not estimates, future projections or budgeted or requested amounts. Just the actual spending from the state books and records.
The central fact is that, over the long term (2006 to 2016), total state spending grew 22 percent faster than the incomes of Nevada families and businesses. It also grew 32 percent faster than the overall Nevada economy (gross state product, or GSP). The income and GSP figures we use for comparison to state spending are taken from official federal government accounts posted online.
These figures show that state government spending has imposed an increasing real burden on Nevadans and our economy. That is, while state spending grew 55 percent, Nevadan’s incomes grew only 27 percent in nominal terms. Adjusting for population growth and inflation, the incomes of Nevada families and businesses actually fell nine percent per person over the decade. Nevada’s GSP grew only 17 percent on a nominal basis, so with population and inflation adjustments, it fell 16 percent (that is, on a real, per-person basis).
Two spending areas – health and social services (HSS) and all of education (K-12 and higher) – accounted for 82 percent of total state spending of $10.943 billion in fiscal year 2016.
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