The Nevada Legislature is now winding down, and with an upcoming meeting of the Economic Forum the state will know how much revenue to expect as it closes budgets for the next two years.
Those in the state during the recession remember the massive cuts and modest fee increases used to staunch our budgetary bleeding during the Great Recession. But from Obamacare to the Commerce Tax, big changes during the recovery may leave you wondering: how is Nevada doing? How does inflation-adjusted revenue and spending compare to the pre-recession peak, and how have things changed?
Thankfully, a recent analysis by Pew provides some of these answers in appealing visualizations. Today we’re going to focus on revenue:
Nevada is grouped with other West Coast states whose revenue has actually increased from peak levels, by 11.1% in Q2 2016 in our case. Meanwhile the rest of the Mountain West is still below a full recovery.
The percentage of Nevada’s revenue from federal sources has moved from a pre-recession average of about 20% to a recovery average of around 25%. States saw a spike in federal funds through the stimulus, and are generally still at higher levels, regardless of whether or not they opted for Medicaid expansion. However, Nevada is fairly leveled out while Utah and Idaho, states without expansion, see federal funding share continue to decline.
While we talk about the need for diverse revenue to escape the boom and bust cycle, Nevada’s revenues are not as volatile as other states. With a volatility score of 5.7 Nevada is above the national average of 5.1 but below almost every other western state.
Still, the swings have been wild. With the potential for major dips, there is a need for adequate rainy day funds to stabilize the budget. Nevada has actually performed above average in setting aside those funds, and now is the time to begin socking that money away again: