The stimulus bill enacted on Tuesday is supposed to give some relief to a nation battered by unemployment, home foreclosures and state budget shortfalls. Yet Nevada, where all of those problems are intense, is getting less help from the federal government than most other states on a per person basis.
In total stimulus funds, the state has a per capita rank of 50th out of 51 (that’s 50 states plus Washington, D.C.); in education funding, it’s 51st; in transportation, it’s 48th; and in Medicaid funds, it’s 47th.
There is some good news. The White House estimates that 34,000 jobs will be created or saved in Nevada, putting the state second in the nation for per capita job creation.
How Nevada could benefit so greatly in terms of jobs despite the relatively low level of federal funds wasn’t clear, as the White House didn’t explain its calculations. But the administration contends that more than 90 percent of the jobs the bill creates will be in the private sector, meaning they’re not directly funded by government spending. In addition, more than two-thirds of the spending in the legislation doesn’t go to states — it goes to national undertakings such as renewable energy, an industry that could benefit Nevada.
But when it comes to the $1.5 billion that’s earmarked for the state in a variety of areas, Nevada falls near the bottom. Only Utah’s total haul from the American Recovery and Reinvestment Act, the official name of the stimulus bill, was less than Nevada’s on a per capita basis, according to an analysis of federal data by the state budget office.
Nevada’s total haul from the $787 billion federal bill was about $560 per person. Utah, with $1.4 billion for 2.7 million residents, got $530 per person.
The No. 1 state in per person stimulus cash was Delaware, where each of the 590,000 residents reaped $1,360. The national per capita average was $750.
In Nevada, where the state is trying to make up a $2.3 billion shortfall between how much money it has for the next two years and how much it would need to fund the government at the levels in the 2007 budget, any aid from the feds is welcome, said Daniel Burns, the spokesman for Gov. Jim Gibbons.
But considering the dire straits the state is in, the governor is surprised and disappointed that Nevada didn’t get a fairer share of the stimulus bill, Burns said.
“We’re awfully far down the list from where we should be given the severity of our economic downturn,” Burns said. “A lot of people are aware of the severity of it, but it doesn’t seem like that counted for much when the list was put together.”
Some Republican governors have talked about turning down some or all of the federal money on philosophical grounds. Gibbons espouses a creed of low taxes, small government and reduced spending, but he is embracing the stimulus money.
“I know some states are talking about not accepting the money, but Nevada is not in that position,” Burns said. “Our budget crisis is very, very severe. The governor is well aware of the fact that there are thousands of families sitting at their kitchen tables every night looking at their checkbook, looking at their bank account, looking at their bills, trying to figure out how they’re going to make it. If this stimulus package will help those people, then the governor supports it 100 percent.”
The state budget office and legislative committees are still studying which gaps the stimulus money could fill. For the most part the $1.5 billion isn’t a lump sum, but a bundle of checks for different accounts, such as school construction, Head Start, Medicaid, unemployment, home weatherization, highway construction, clean drinking water and mass transit, to name a few.
Part of the stimulus, the State Fiscal Stabilization funding, does go directly to the state budget.
“We’re certainly not ungrateful,” Burns said of the funds from Washington. “This money will help a lot of people. Just look at that money for Medicaid. Say you’re unemployed, you don’t have health insurance, and your young child’s tooth has an abscess. Government has an obligation to help that person. It’s not their fault they got laid off.”
The $450 million Nevada’s getting in Medicaid assistance from the stimulus bill represents the largest percentage increase of any state, even though, on a per capita basis, Nevada comes in 47th of 51.
The Medicaid funds are a good example of why Nevada ranks so low in all those categories, said Jason Levitas, policy analyst for the nonpartisan, Washington-based Center on Budget and Policy Priorities.
States decide how generous to make their medical assistance programs by setting eligibility criteria. The federal government then pays a percentage known as FMAP, or Federal Medical Assistance Percentage. Nevada extends medical assistance to the smallest proportion of needy people of any state in the country.
In the stimulus bill, the percentage of the Medicaid bill paid by the federal government was temporarily increased, but since the state’s medical assistance tab was already the smallest in the country on a per person basis, the increase was also one of the smallest per person. The Medicaid formula in the stimulus bill also took increases in unemployment into account, Levitas said.
“The Medicaid program right now is so skimpy that getting the federal government to pay a larger share doesn’t bring that much money to the state,” he said.
That logic applies in many other areas, he said. “Nevada has long been one of the states that provides the least in terms of public services,” he said. The state has the lowest level of state and local government spending as a share of income. “In a state where many social services are already relatively starved, it makes it that much harder to cut them back now.”
The state budget director, Andrew Clinger, concurred with that analysis. Nevada’s fiscal conservatism, which many in the state view with pride, is the reason many analyses have shown over the years that state residents pay more to the federal government in taxes than they get back in spending — about 65 cents on the dollar as of 2007, according to the Washington-based Tax Foundation.
Similarly, Nevada’s low spending on both K-12 and higher education appears to be part of the reason the state came in last in per capita education funding from the bill. The $543 million the bill directs to the state for various education purposes is dead last per person.
Nevada’s per capita allocation of education funding is just 74 percent of what first-place Alaska is getting, according to rankings compiled by the Congressional Research Service.
Even that amount is up in the air, because the state may be forced to seek a waiver from a provision that requires states to spend at least as much on education as they did in 2006 to trigger the federal contribution.
Another major piece of the stimulus is money for transportation and other infrastructure projects, which can put people to work at the same time as they create a public good.
Nevada has a backlog of more than $5 billion in road construction projects, according to the state Department of Transportation. But the state got just $270 million in infrastructure grants, $201 million of which is for highways. Transportation Director Susan Martinovich told the Legislature last week that that’s only going to pay for repaving some of the state’s existing roadways.
On a per capita basis, Nevada is 48th of 51 in infrastructure money from the stimulus, getting less than one-fourth of the amount received by No. 1 Delaware and less than one-third what No. 2 Alaska is getting. Nevada’s share is better, however, than what Arizona, North Carolina and Florida are slated to receive from the bill.
The investigative journalism nonprofit ProPublica took the analysis a step further, measuring the infrastructure grants against states’ relative levels of unemployment. Nevada has the fifth-highest unemployment rate of any state, according to the Bureau of Labor Statistics.
By that measure, Nevada is getting the lowest amount of infrastructure funding per unemployed worker, ProPublica reported.
Martinovich said the bill didn’t apportion transportation funding based on the length of a state’s transportation wish list or the amount of unemployed people who need to be put to work. Rather, it used formulas similar to those Congress uses to issue annual federal highway funding.
The normal formula takes into account a variety of factors, including some — growth, the size of urban areas and the amount of federal land in a state — by which Nevada does well. But on other metrics, Nevada fares poorly: overall population, number of total road miles, and traffic congestion, which, believe it or not, is low here compared to other states.
To Sen. John Ensign, R-Nev., a vocal critic of the stimulus bill, these inequities are disturbing, said spokesman Tory Mazzola. Ensign opposed the bill principally because of what he saw as wasteful spending that was included in it.
“$150 million for a fish hatchery — is that really the stimulus we need?” Mazzola said. “Some of that could have gone to more worthwhile projects. But when it comes to the things that are worthwhile, like education and roads and bridges, it doesn’t seem like Nevada got its fair share.”
President Barack Obama pushed Congress to get the bill done by Feb. 13, saying it was urgently needed to dampen the economy’s free fall. But to Ensign, Congress could have used more time to tinker with some of the formulas that ended up giving Nevada the short end of the stick.
“If it (the bill) wasn’t rushed through and more people had time to analyze it and take a good look at what was coming out, that’s what he (Ensign) would have preferred,” Mazzola said.
Senate Majority Leader Harry Reid, D-Nev., worked hard to get Nevada as much benefit as possible from the stimulus package, according to spokesman Jon Summers. “One of the reasons Senator Reid appointed himself to be one of the conferees (negotiating the final bill) was to make sure Nevada gets its fair share,” Summers said. “The truth is, Nevada actually did really well.”
Reid couldn’t do anything about state funding levels, Summers said, but he did help get the provision that will allow Nevada to seek an education funding waiver in the final bill.
Other provisions in the bill are not state-specific but stand to benefit Nevada disproportionately, he said, such as renewable energy investments. “That’s diversifying our economy so that we have another industry to create jobs and contribute to the state budget through taxes,” he said.
Summers noted that many of the critics of Nevada’s stimulus funding are merely partisans who didn’t want the bill to pass anyway.
“It is a bit disingenuous for people who opposed this in the first place to then come out and say we’re not getting enough,” he said. “If congressional Republicans had their way, Nevada wouldn’t be getting anything. It’s because of Senator Reid that there’s an economic recovery package in the first place.”
Burns, Gibbons’ spokesman, said he hopes the state will see effects of the package beyond the amount of money that’s going into the budget.
“The governor is hoping the stimulus package does what the name says, and that is to stimulate,” he said. “It’s not meant to cure all our problems. It’s meant to kick-start the economy, get some projects going and create jobs.”
Review-Journal writer Francis McCabe contributed to this story. Contact reporter Molly Ball at email@example.com or 702-387-2919.Nevada’s share of theAmerican Recovery and Reinvestment Act of 2009
Total funds to state
Per capita rank (out of 51): 50
Education funds to state
Per capita rank: 51
Transportation funds to state
Per capita rank: 48
Medicaid assistance to state
Per capita rank: 47
Jobs created or saved
Per capita rank: 2
SOURCES: Nevada State Budget Office; Congressional Research Service; ProPublica; Democratic Policy Committee; CNNMoney.com