Nevada’s received a C grade for its financial health in a new report from The State Data Lab, a project of Truth in Accounting (TIA).
The Chicago-based government financial watchdog analyzes each state's debt and compares it to its annual income to come with the score.
Nevada currently has bills of $8.5 billion and revenue of $5.5 billion. The $3 billion difference means a “due bill” of $3,100 per taxpayer. TIA gives states a C when they have created a taxpayer burden between $0 and $4,900.
“The C grade is a warning sign to lawmakers that public finances are trending in the wrong direction," Sheila Weinberg, founder and CEO of TIA, said. "Most voters would be alarmed to learn how much money their state needs in order to cover promised expenses.”
Nevada’s grade and taxpayer “burden” have placed it near the center of the 50-state ranking. Alaska's finances top the list with a surplus of more than $74,000 per taxpayer. New Jersey sits on the opposite side with a deficit of nearly $65,000 per taxpayer.
Part of the income/spend differential in Nevada can be found in how the state manages its books. According to TIA, “Nevada's reported net position is inflated by $273 million, largely because the state defers recognizing losses incurred when the net pension liability increases.”
The state is currently responsible for $12.3 billion in yearly retirement benefits. Of this, $2.7 billion in pension payments and $1.3 billion in healthcare coverage for retirees remains unfunded.
“Many state governments struggle to close budget gaps resulting from benefit programs that have been promised to public employees but not fully paid for," the report says. "These unfunded retirement and healthcare obligations represent real expenses that fall on taxpayers. Still, politicians often find it expedient in the short term to kick the can down the road to future generations thereby forfeiting their fiduciary responsibilities.”
The state also has more than $3 billion of bond debt.