October 9, 2018

#10 | Ranking the States by Fiscal Condition: Nevada

Summary

On the basis of its solvency in five separate categories, Nevada ranks 10th among the US states for fiscal health. Nevada has between 1.46 and 2.69 times the cash needed to cover short-term obligations. Revenues exceed expenses by 16 percent, with an improving net position of $521 per capita. In the long run, a net asset ratio of 0.03 indicates that Nevada does not have any assets remaining after debts have been paid. Long-term liabilities are lower than the national average, at 37 percent of total assets, or $1,697 per capita. Total unfunded pension liabilities that are guaranteed to be paid are $83.92 billion, or 65 percent of state personal income. OPEB are $1.45 billion, or 1 percent of state personal income.Share this

Key Terms

  • Cash solvency measures whether a state has enough cash to cover its short-term bills, which include accounts payable, vouchers, warrants, and short-term debt. (Nevada ranks 24th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Nevada ranks 1st.)
  • Long-run solvency measures whether a state has a hedge against large long-term liabilities. Are enough assets available to cushion the state from potential shocks or long-term fiscal risks? (Nevada ranks 16th.)
  • Service-level solvency measures how high taxes, revenues, and spending are when compared to state personal income. Do states have enough “fiscal slack”? If spending commitments demand more revenues, are states in a good position to increase taxes without harming the economy? Is spending high or low relative to the tax base? (Nevada ranks 1st.)
  • Trust fund solvency measures how much debt a state has. How large are unfunded pension liabilities and OPEB liabilities compared to the state personal income? (Nevada ranks 45th.)

For a complete explanation of the methodology used to calculate Nevada's fiscal health rankings, download the full paper and the dataset at mercatus.org/statefiscalrankings.

To read all our work on Nevada, go to mercatus.org/states/nevada.