Fiscal Analysis Center

FISCAL Analysis Reports:

• The Relative Stability of Nevada's State Tax System
  FISCAL Analysis Brief Volume 1 | Issue 5
  

  + Report Summary

  The report looks at tax structure from a variety of angles. The report reveals that Nevada is the 9th most stable nationally on inflation-adjusted tax collections per capita. It also finds that Nevada ranked 27th nationally for state tax collections per $1,000 of personal income; and ranked 43rd nationally in state tax collections as a percent of gross state product.
  
  The report finds that although there has been substantial decline in Nevada's general fund revenue over the past year, "the reality is that every state's tax system is a function of consumption, productivity and/or wealth. When the economy suffers broadly, as is the case in the vast majority of states today, there is no tax system in the nation that is immune to its effects."
  
  The report also examines whether or not local government revenues are more stable than state government revenues. In Nevada, there is a common belief that local governments have an advantage over the state in terms of revenue stability because local government is more dependent upon property taxes, while the state relies more on sales and gaming taxes.
  
  The report finds that this belief is unfounded, and that "the idea that simply trading sales tax for property tax between the state and local level will somehow improve the state's lot lacks foundation."
• An Overview and Comparative Analysis of Nevada's State Retiree Health Insurance Subsidy
  FISCAL Analysis Brief Volume 1 | Issue 4
  

  + Report Summary

  PEBP gives state public employee retirees and their dependents a monthly subsidy toward their retirement health insurance, a benefit widely unavailable in the private sector. The State Retiree Health Insurance Subsidy currently has a $4 billion unfunded liability and has no mechanism in place to fund this commitment, according to the report.
  
  Nevada treats the subsidy on a pay-as-you-go basis, making payments from the General Fund to pay only the current year's premium for current retirees. The current year premium for FY2009 is $44 million, representing just 15 percent of the $287 million Annual Required Contribution (ARC), the actuarial amount necessary to pay the unfunded liability in 30 years. This 15 percent is the third lowest contribution rate in the nation.
  
  If Nevada continues to pay for this benefit on a pay-as-you-go basis, the $44 million FY2009 cost will rise to approximately $200 million in 2023 and $600 million in 2038.
  
  Retired employees are eligible for the subsidy with as little as 5 years of service, and there is no lifetime cap on the subsidy. Retirees with 20 years or more of service receive a monthly stipend of $564.41, or nearly $6,800 per year for the remainder of their life. In many instances, they receive the subsidy for more years than they have worked for the state.
• An Overview and Comparative Analysis of the Nevada Public Employees' Retirement System
  FISCAL Analysis Brief Volume 1 | Issue 3
  

  + Report Summary

  The report reveals that PERS is only 77 percent funded, leaving a $6.3 billion unfunded liability, and placing the state in the bottom third of the nation in terms of funding level. The report states that "large underfunded long-term liabilities put future budgets at risk, potentially affecting state funding for education and health care."
  
  Nevada's contribution rates of 20.5 percent of salary for regular employees and 33.5 percent of salary for fire and police employees rank as the nation's 2nd and 3rd highest, respectively.
  
  After between 28 and 30 years of service for regular employees, 25 years for police and fire, PERS guarantees public employees a pension of at least 75 percent of their highest 3 years of salary per year for the rest of their lives.
  
  Nevada PERS has one of the highest "service credits," otherwise known as a "formula multiplier," in the nation at 2.67. A high service credit effectively increases benefits and/or decreases the service time required to receive full benefits. For example, Nevada recently increased the service credit from 2.50 to 2.67 with the effect of lowering the necessary service time to receive full lifetime benefits from 30 years to 28 years.
• State-to-State Comparison of Public Employee Compensation Levels - Revised
  FISCAL Analysis Brief Volume 1 | Issue 2
  

  + Report Summary

  This report compares Nevada's public employees' salaries to the national average. It compares as combined state and local employees to national average, and also compares state public employee salaries and local public employee salaries separately to the national average. The research compared wages only and did not include any benefits.
  
  Nevada's average public employee pay ranks 8th highest among public sector pay in the 50 states and the District of Columbia. For example, a public sector parks and recreation employee in Nevada makes an average of $42,645 a year. The average compensation for a public sector parks and recreation employee in the United States is just $35,757.
  
  On average, Nevada's state and local government employees report wages and salaries 12.1% higher than their public sector counterpart in other states.
  
  The state of Nevada's average public employee makes 102.4% of the national average paid to public sector employees, while local government employees in Nevada, excluding teachers, make 131% of the national average. Teachers in Nevada make 93.5% of the national average.
  
  Local government employees are paid 124% more than the national average in 15 out of 24 major job categories.
  
  Nevada's number of public sector employees per capita is the lowest in the nation.
• Comparative Analysis of Public and Private Employee Compensation Levels
  FISCAL Analysis Brief Volume 1 | Issue 1
  

  + Report Summary

  This report studied disparity between pay in the private and public sectors. It compared median and average annual wages in 324 classifications and sub-classifications for which data was available for both public and private workers. The study compared wages only, and did not include benefits such as health care insurance or retirement benefits.
  
  In the 22 major occupational classifications that were compared, state and local government employees report higher median annual wages in 21 categories compared to their private sector counterparts.
  
  96.3% of all state and local workers are employed in major occupational classifications in which the median pay is higher than the median pay for private sector workers in the same classification.
  
  While a government employee in Nevada is paid an average $47,450 a year, a private sector employee is paid an average of $37,040 a year.
  
  On average, a Nevada public sector employee is paid roughly 28% more than a private sector employee in a similar job classification.
  
  For the 324 occupational classifications and sub-classifications, state and local employees median wages are at least 10-percent higher than those in the private sector in 63.2% of occupational classifications; at least 25% higher in 35.5% of classifications; and at least 50% higher in 13.6 percent of occupational classifications.

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