Nevadans lose $3 billion a year to government

Benjamin Grove

Wednesday, Dec. 15, 1999 | 11:17 a.m.

Federal spending

How much federal money is spent in Nevada, per resident:

$894

$1,335

$584

$366

$1,136

$4,315

WASHINGTON -- Nevada sends $3 billion more tax money a year to Washington than the federal government sends back to the state in dollars for programs.

That's according to a joint publication of the Kennedy School of Government at Harvard University and Sen. Daniel Patrick Moynihan, D-N.Y., that was released last week.

The report said Nevada residents in 1998 paid $3 billion more in federal taxes than they received back in money for a variety of programs ranging from federal housing and Social Security to education. That means Nevada paid about $1,763 more per resident than the state got back.

The figure represents the third worst rate in the nation, the report said. Only Connecticut and New Jersey paid out more money per capita than the states got back.

New Mexico gets the highest return on its tax dollar. Residents there receive $3,697 per capita more than they pay in federal taxes. New Mexico ranks last in per capita income and first in poverty, so the state pays less in federal income taxes. The federal government also spends $1.2 billion a year on the Department of Energy's Los Alamos National Laboratory in New Mexico.

Personal income rates drove the report's results. The report said Nevadans earn an average $27,099 a year, 16th highest in the nation, which means Nevadans pay more in federal income taxes.

"You look at Connecticut, they have the highest per capita income in the nation so they are at the bottom of the list," Harvard professor Herman Leonard, co-author of the report, said in an interview. "Most people would like to have these kinds of problems."

Nevada also receives less than most states in Social Security payments and Medicare because only 13 percent of Nevadans are older than 65. Despite an increasing number of retirees, Nevada is still the 10 youngest state, according to the report.

"You've got a boom economy and a relatively young population," Leonard said.

Still, Rep. Shelley Berkley said, "If we are giving to the federal government, we ought to get it back."

Berkley said the state had done well this year securing money for flood control, land at Nellis Air Force Base, buses, water projects and after-school programs.

But Berkley said Nevada's four-member delegation should go after even more money for highways, schools and health care.

"We're going to continue to fight for fairness and equity by educating my colleagues in Congress about the needs of our community and the extraordinary growth in Nevada," Berkley said. "We cannot be content."

Rep. Jim Gibbons, R-Nev., said the report outlines an "alarming trend."

"As we look to the future, we must secure our fair share of federal dollars for important programs such as education and health care, which are critical as our state continues to grow in population," Gibbons said in a written statement.

Sen. Richard Bryan, D-Nev., former state lawmaker and governor, said Nevada traditionally has not chased after federal programs because the funding often dries up after a year or two.

"Nevada, being a very conservative state, rather than looking into these things ... was always somewhat wary of some of these federal programs," Bryan said. "You ask if Nevada is getting its fair share -- the numbers certainly raise the question."

Others said the report wasn't necessarily bad news.

"To kind of echo the authors of the report, this is a good problem to have: we have a higher per capita income and a higher income average means Nevadans send more to Washington than they get back," said Mark Schuermann, spokesman for Sen. Harry Reid, D-Nev. But Schuermann said the state could chase after more federal money, citing federal money available for more after-school programs and teachers.

Generally, poorer states got higher returns on their tax dollar because residents pay less in federal income taxes and use more federal programs for low-income residents such as food stamps, Medicaid and housing assistance.

Nevada joined 18 other states that had a per capita "payment deficit," the report said. Nevada has had a deficit for the last 16 years, except in 1986. The deficit has grown steadily since 1983.

Moynihan first commissioned the report for New York in 1977 and over the years it grew to include all 50 states.