Tax Dollar Performance in Nevada

| February 24, 2009

Key Findings

The current state budget shortfall in Nevada has sparked a debate over whether to increase taxes. However, few attempts have been made to measure the effectiveness with which tax dollars are being spent in Nevada.
Quantitative analyses performed in this study provide empirical evidence suggesting that tax dollars are being spent quite ineffectively in Nevada. Indeed, across a range of performance measures, the quality of services may have deteriorated as tax rates have increased in Nevada.
There is at least limited evidence to suggest that for every additional $100 in per-capita tax revenues:
- Graduation rates decline by 0.37 percent while SAT scores improve by 0.81 points.
- The quality of healthcare deteriorates—to the tune of an additional 16.6 years lost to premature death per 100,000 in population.
- The crime rate increases by 0.64 percent over the national average.
- Nevada’s national ranking of highway system performance falls by 0.5 places.
The ineffectiveness of state and local government to translate higher tax revenues into improved performance is likely due to structural deficiencies that fail to encourage efficiency.
The average quality of life in Nevada may improve if structural reforms are implemented to expose government agencies and their workers to market forces that encourage greater efficiency and effectiveness.

Geoffrey Lawrence is director of research at Nevada Policy. Lawrence has broad experience as a financial executive in the public and private sectors and as a think tank analyst. Lawrence has been Chief Financial Officer of several growth-stage and publicly traded manufacturing companies and managed all financial reporting, internal control, and external compliance efforts with regulatory agencies including the U.S. Securities and Exchange Commission. Lawrence has also served as the senior appointee to the Nevada State Controller’s Office, where he oversaw the state’s external financial reporting, covering nearly $10 billion in annual transactions. During each year of Lawrence’s tenure, the state received the Certificate of Achievement for Excellence in Financial Reporting Award from the Government Finance Officers’ Association. From 2008 to 2014, Lawrence was director of research and legislative affairs at Nevada Policy and helped the institute develop its platform of ideas to advance and defend a free society. Lawrence has also written for the Cato Institute and the Heritage Foundation, with particular expertise in state budgets and labor economics. He was delighted at the opportunity to return to Nevada Policy in 2022 while concurrently serving as research director at the Reason Foundation. Lawrence holds an M.A. in international economics from American University in Washington, D.C., an M.S. and a B.S. in accounting from Western Governors University, and a B.A. in international relations from the University of North Carolina at Pembroke. He lives in Las Vegas with his beautiful wife, Jenna, and their two kids, Carson Hayek and Sage Aynne.

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