Speaking for Nevada - October 2003

These Are a Few of My Favorite Statistics…

by Bob Beers

My dad – who is an engineer, not a businessman – taught me you could lay all of America’s statisticians from end to end and still not be able to reach a conclusion. I went a different direction, and instead, believe you can reach any conclusion you want to.

Still, you can’t live without statistics. Here are three that have played a big part in my life this year:

Nevada has the 13th-highest tax burden. The Tax Foundation (.taxfoundation.org) has a 65-year history of educating Americans about taxes. They have long published this annual ranking of the 50 states’ tax burdens, calculated as the amount of each state’s government revenue divided by the total income of its residents.
Nevada has the third-lowest percentage of citizens living below the federal poverty standard compared to all other states. This one comes from the Census Bureau, and really makes my more freely-taxing colleagues edgy. (http://ferret.bls.census.gov/macro/032002/pov/new25_001.htm)
Nevada ranks 51st in poverty spending. (No one’s ever offered me the source on this one, but it was a mantra for increased spending during the last session.)

Let me discuss each of these three in turn:

13th-highest tax burden:

The Tax Foundation separates federal versus state/local taxation, and Nevada’s state/local tax burden is light at 41st. However, only Wyoming has a higher federal tax burden per capita than Nevada, and the sum of the two brings us up to 13th-highest. The Tax Foundation’s ranking was done before the 33 percent taxing and spending hike this year, so we’re headed higher.

Our low per-capita state/local ranking does not mean Nevada’s state and local governments are funded poorly on a per-capita basis, by the way. The Tax Foundation has accounted for the state/local taxes that we offload onto our visitors and tourists. If all of our state/local taxes were attributed to just our citizens, we’d be ranked higher.

Since federal taxes are almost entirely based on income, our high federal tax burden means we have high taxable income per capita. Indeed, the unemployment rate in Nevada (in June 2003) is more than 15 percent smaller than the national rate (5.3 percent vs 6.4 percent) and over 20 percent smaller than California (6.7 percent). In Nevada, we work.

Third-lowest percentage of citizens living below the federal poverty standard:

This one just drives my liberal colleagues crazy. But it’s pretty hard to argue with the U.S. Census Bureau. Really, our low poverty rate and high federal tax burden are part of the same characteristic of the Silver State: here, we work. If you work, you are not in poverty. If a state has low unemployment and high taxable income, it makes sense that we would also have one of the lowest percentages of citizens living in poverty.

51st in poverty spending:

This is a "dishonest" statistic. In fact, since we rank 49th (third-lowest poverty rate of 51) in poverty per thousand citizens, an "average" level of poverty spending should rank us at the bottom in poverty spending per thousand citizens. When you rank poverty spending per enrollee, we are generous. Our per-enrollee Medicaid benefit is over 30 percent richer than California’s, with several optional services beyond what the feds require.

Why then, do we find ourselves executing a 35 percent increase in general-fund spending on Nevada’s war on poverty?

The Guinn administration eased eligibility for welfare in the wake of Sept. 11.

Several new programs have been added over the past five years. They pay cash to families who adopt nieces, nephews and grandchildren who are wards of the court. These programs are not means tested, so wealthy families sign up. In the past, many of these families would have taken the children in on principle even without the government’s cash payment.

The number of people on welfare increased rapidly under the looser standard and expanded programs, but the feds only fund to a moderate level, equal to each state’s poverty rate. Now we have to use extra state taxes to make up for having spent our federal dollars too quickly.

In addition, economists (see cprnevada.org) say the budget exaggerates caseload growth. Though we have funded growth in both TANF and Medicaid caseloads, both have decreased since we left Carson City, just as the private economists predicted.

Nevada is already doing better in its war on poverty than other states. Let us hope that by putting the screws to taxpayers, we don’t end up compromising the employment market and causing our poverty and unemployment rates to go up.

Bob Beers
Bob Beers, CPA, is a Republican representing Clark County District 4 in the Nevada Assembly. For more information on Nevada proposed taxes go to: http://nevadabudget.com/