Better Budgeting for Better Results

Executive Summary

Executive Summary 

A difficult path lies ahead for Nevada lawmakers in the 2011 Legislative Session. State agencies have requested $8.35 billion in state General Fund spending to continue operations into the 2011-13 budget cycle.

At the request of the state budget director, agency directors have identified strategies for reducing costs by 10 percent, bringing total requests down to $7.53 billion. Yet, this amount still far exceeds available revenues, which are projected at $5.34 billion.

Reconciling state finances will require Nevada lawmakers to embrace an entirely new approach toward budgeting. The baseline budgeting methodology currently followed by the state is fundamentally flawed. It assumes perpetual spending increases, irrespective of revenues, and exacts no accountability for how taxpayer dollars are spent.

Nevada needs a new approach. In other states, performance-based budgeting has regularly produced significant savings — while also making it much more likely that the real priorities of lawmakers are met. Legislators can ensure that state agencies pursue savings and efficiencies in behalf of taxpayers by giving agency directors — in exchange for increased personal accountability — the incentives and autonomy to actually do so.

The system-wide accountability born of performance-based budgeting will increase the efficiency with which Nevada lawmakers' priorities are met. When legislators allocate funding toward accomplishment of some particular policy objective, they want assurances that any funding increase will translate into a proportional increase in performance. However, this has rarely been the case.

Legislative intent has often been sabotaged by the very policy designs lawmakers themselves have imposed — designs inadequate to accomplish the results intended. So, from a performance-based budgeting perspective, this analysis offers specific policy reforms. They would greatly increase government efficiency in the high-priority areas of K-12 and higher education, health care and public safety.

Finally, the analysis recognizes that government labor costs in Nevada, particularly at the local level, greatly exceed those of other states. Significant savings are available if Nevada's collective bargaining law is reformed to allow local governments greater flexibility with regard to personnel compensation. If local government employees in Nevada were merely compensated at the national median, lawmakers could extract approximately $2.3 billion in biennial savings — an amount directly fungible to the state General Fund.

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Geoffrey Lawrence

Geoffrey Lawrence

Director of Research

Geoffrey Lawrence is director of research at Nevada Policy.

Lawrence has broad experience as a financial executive in the public and private sectors and as a think tank analyst. Lawrence has been Chief Financial Officer of several growth-stage and publicly traded manufacturing companies and managed all financial reporting, internal control, and external compliance efforts with regulatory agencies including the U.S. Securities and Exchange Commission.  Lawrence has also served as the senior appointee to the Nevada State Controller’s Office, where he oversaw the state’s external financial reporting, covering nearly $10 billion in annual transactions. During each year of Lawrence’s tenure, the state received the Certificate of Achievement for Excellence in Financial Reporting Award from the Government Finance Officers’ Association.

From 2008 to 2014, Lawrence was director of research and legislative affairs at Nevada Policy and helped the institute develop its platform of ideas to advance and defend a free society.  Lawrence has also written for the Cato Institute and the Heritage Foundation, with particular expertise in state budgets and labor economics.  He was delighted at the opportunity to return to Nevada Policy in 2022 while concurrently serving as research director at the Reason Foundation.

Lawrence holds an M.A. in international economics from American University in Washington, D.C., an M.S. and a B.S. in accounting from Western Governors University, and a B.A. in international relations from the University of North Carolina at Pembroke.  He lives in Las Vegas with his beautiful wife, Jenna, and their two kids, Carson Hayek and Sage Aynne.