Nevada lagging in federal aid

Friday, May 4, 2001 | 4:59 a.m.

In Clark County

These were the top 10 federally funded expenditures in Clark County in fiscal 2000, according to the U.S. Census Bureau's Governments Division.

Nevadans on average received less money from the federal government than other Americans last year, according to two reports.

A Commerce Department report for the fiscal year that ended Sept. 30 revealed that Nevada received only $622 per person in federal aid to state and local governments for programs ranging from Medicaid to highway construction. The national average was $1,016.

Nevada was last in fiscal 2000 in federal spending that went to individuals, such as retirees and other recipients, such as contractors, as well as state and local governments. That figure, $4,316 per person, was well below the national average of $5,739, according to figures compiled by the U.S. Census Bureau's Governments Division.

There are several possible explanations for Nevada's poor showing.

"Part of the funding is based on census figures, and since Nevada is one of the fastest-growing states, we're constantly being undercounted," Nathan Naylor, spokesman for Sen. Harry Reid, D-Nev., said. "Every time they don't take into consideration everyone who calls Nevada home, we get the short end of the stick."

One can argue that Nevada's low ranking had nothing to do with its small population because other lightly populated states such as Alaska, Wyoming, North Dakota and Montana ranked high in both reports. The per capita calculations were based on populations as of April 1, 2000. Nevada's was 1,998,257.

But Keith Schwer, director of UNLV's Center for Business and Economic Research, and Don Hataway, deputy state budget administrator, said Nevada has unusual characteristics that set it apart.

"A lot of it is based on income," Schwer said. "Nevada is in the top 10 in personal income, and more money goes to low-income states than high-income states. We've had a very strong economy here in comparison to other areas in the United States, so we don't have as many groups of people who profile as aid recipients."

The Commerce report was no fluke as far as Nevada was concerned. For fiscal 1999, the state ranked 49th in federal aid, surpassing only Virginia. In the latest report, they switched rankings.

The federal aid included direct cash grants to state and local governments, money passed to those governments through regional commissions and organizations, research-and-development money and matching revenues. Not included were federal expenditures to its own agencies in Nevada.

Other factors

Nevada's lack of government contractors, such as in the defense industry, and its comparatively low volume of research and development, because it only has two universities, were cited as other factors.

"But UNLV and (the University of Nevada, Reno) have come up quite a bit," Hataway said. "They work very hard to get research dollars."

While the federal government spent $423 per person for health care programs such as Medicaid, Nevadans on average received only $164. For family-support programs such as Aid to Families With Dependent Children, the national average was $46.47 per person, but only $19.72 for each Nevadan. The Highway Trust Fund directed $83.32 to the average American, but only $74.66 per Nevadan.

The government spent $91.39 per person on housing programs nationally, but only $61.37 for each Nevadan. The Office of Elementary and Secondary Education allocated $44.67 per American, nearly double the $23.43 per Nevadan.

Walt Rulffes, Clark County School District chief financial officer, said it would probably help if the state hired more grant writers to go after federal dollars.

"I believe a little more aggressiveness will pay off," he said of the state's ability to attract education funds. "We should step it up to receive more dollars for our boys and girls."

But the link between poverty and federal funding cannot be underestimated, he said. Rulffes said he has worked in other parts of the country where 60 percent of the children were eligible for free or discount lunches, while it's 35 percent to 40 percent in Nevada.

"We know we're low in funding, and we continue to be frustrated by it," Rulffes said. "But we're told we don't have the poverty factor in this area."

The Health and Human Services Department spent $563 on the average American last year, but only $250 per Nevadan.

Per capita aid

One explanation is that Nevada, which has long maintained fiscal conservatism in its budget, has tougher standards to qualify for Medicaid than many other states, Hataway said. Each state sets its own guidelines to qualify for the subsidized health care. Because federal Medicaid funds must be matched by state dollars, Nevada doesn't get as much per capita as other states.

But Hataway said Gov. Kenny Guinn's proposed biennium budget loosens Medicaid qualifications.

"Every eligibility requirement we liberalize comes with a price tag, and this state has been relatively conservative," Hataway said. "As the state gets larger, there is a belief that certain benefits will have to be enhanced to make sure basic needs are met. There is recognition that we have to put more money into education and human resources, and there's recognition of that in the governor's budget."

Among federal departments, Nevadans came closest to the national average last year with $105 per person from Transportation -- $6 less than average. But Education spent $91 per American, compared to only $54 per Nevadan, and Housing and Urban Development averaged $112 per American, but only $73 per Nevadan.

Newer units

Betty Turner, Clark County Housing Authority executive director, said HUD tends to divert more money to communities such as Chicago, where public housing conditions are poor. Las Vegas, by comparison, has much newer units.

Some HUD reimbursements are tied to average rents in a given community, she also said. "The fair market rent here for a two-bedroom unit is $757 a month, but in Los Angeles it's $1,012."

The census report revealed that federal money spent in Nevada on grants, salaries and wages, procurement contracts and direct payments to individuals has dropped by nearly $500 per person since 1993.

Even though the actual amount diverted to Nevadans climbed from $5.77 billion in 1993 to $8.62 billion last year, per capita spending dropped from $4,808 to $4,316.

Nationally, however, those federal expenditures rose from $5,039 per person in 1993 to $5,739 last year, a per capita increase of $730.

"This is why Sen. Reid has been struggling all these years to make sure we have a fair system for counting every citizen in the state," Naylor said. "It's not only important for representation, but for funds for roads and education and other services."

The largest chunk of federal money allocated to Nevadans last year -- about $3.77 billion -- represented retirement and disability payments such as Social Security, and benefits for retired federal employees and veterans. The next largest slice -- about $1.7 billion -- went to individuals for food stamps, Medicare, unemployment compensation benefits, excess earned income tax credits and lower-income housing assistance.

But Amy Spanbauer, spokeswoman for Rep. Jim Gibbons, R-Nev., said it is not surprising that Nevada ranks among the bottom 10 states in per capita Social Security and disability benefits.

"Because of the huge youth population in Nevada, we're not taking in as much Social Security," she said. "We also don't have as many disadvantaged communities as do other states."

Naylor said Nevada doesn't need funding from agencies such as the Agriculture Department, that may have contributed to its low ranking. Schwer agreed.

"In some ways we don't have the breadth of programs you have in other states," Schwer said. "Because we're a small state we don't have programs that other states have. Whatever federal program comes down the pike may not fit us well."

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