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Nevada’s Leaders Prepare for a Challenging Future


• Dr. Matthew Ladner

Nevada has a growing population with a big fiscal problem on the way—huge projected increases in both the youth and elderly populations by 2030. Translated, this means a coming demand for more services to accommodate these populations, with a proportionately smaller percentage of working-age Nevadans to pay the bill. Thankfully, Nevada’s leaders from Governor Brian Sandoval to the legislature understand this looming crisis is on the way, and they are working to address it.

Let’s check the U.S. Census projections:

06-01-2015 growth of school aged_Nevada

 

The Census Bureau projects almost a 300,000 increase in the number of 5-17 year olds between 2010 and 2030. Just for a bit of perspective, Nevada currently has 439,634 students enrolled in public schools, making an increase even half the size of that growth projection a titanic problem—with the need to provide a K-12 education the main cost driver.

Simultaneously, the Census projects an increase of more than 450,000 elderly residents by 2030, more than double the 2010 numbers. Elderly people generate less tax revenue on average, as they have typically long passed their peak earning years and have retired to fixed incomes. The elderly also generate costs to state budgets through Medicaid programs, required payouts in public pensions, etc.

In 2012, the Nevada Demographer’s Office published a more recent estimate of age projections. These projections had the opportunity to incorporate the effects of the Great Recession on the state, which was especially noteworthy in terms of a decline in the rate of people moving into the state and in the rate of people moving out. The state estimates, however, a sizeable increase in both the youth and elderly populations.

06-01-2015 Nevada State Demographers Office Age Estimates

 

Since the publication of the state estimates in 2012, the Nevada economy has seen increases in home sales, with single family home sales increasing 37% from March of 2014 to March of 2015 in Las Vegas. In March of 2015, Nevada had exceeded the national rate of job growth for 31 straight months. Nevada also had a record number of visitors in 2014 at 41 million.

Population estimates represent a moving target, with something falling between the state estimates and the Census Bureau estimates being far more likely than the state precisely landing on either set of estimates. Both sets of estimates project very large increases in Nevada’s youth and elderly populations, varying only by degree.

Moreover, Nevada public schools currently face severe overcrowding. National Public Radio recently profiled Forbuss Elementary school in Clark County. Architects designed the building for 781 students, but it currently has 1,230 students, spilling out into 16 trailers. The Nevada public school system has been unable to keep up with either physical or human capital needs. In the same NPR piece, a teacher in Bertha Ronzone Elementary School reports having 33 students in a trailer classroom.

Nevada enrollment growth stretches as far into the future as any demographer can forecast. What will be different over the next decade and a half is that Nevada’s elderly population will also surge alo06-01-2015 Nevada Chartng with the youth population. Economists study age demographics with age dependency ratios. The idea behind the total age dependency ratio holds that both young and elderly people consume public services primarily financed by working age people. The formula runs (under 18 + 65 and over)/(18 to 64 year olds). Low age dependency ratios are equivalent to high working age populations, which is great for economic growth. High age dependency ratios equate to low working age populations. Economists have found high age dependency ratios to be associated with lower rates of economic growth.

The Census Bureau projects the total age dependency ratio to increase by 20 points between 2010 and 2030. Nevada’s K-12 overcrowding problems, in short, will not be getting any easier to deal with in the next decade and a half and require innovative solutions.

Much of the workers of 2030 and beyond either are currently enrolled in school or are recent graduates. The National Assessment of Educational Progress shows the percentage of Nevada eighth graders reading at Proficient or better between 1998 and 2013.

06-01-2015 Nevada Students Scoring Proficient or better on 8th grade Reading

 

All of these figures are well below the national average, and further still below what Nevada will need to secure a prosperous future. Summing up:

  • Nevada faces a projected crushing level of student enrollment growth, and has challenges educating the current student population to a competitive level.
  • Nevada’s elderly population projects to increase by an even greater amount—serving as a drag on state revenue growth and creating increased demands for health care spending.

These two points lead to the following conclusion:

  • Nevada needs to substantially improve the academic and cost effectiveness of the public school system as quickly as possible.

Fortunately, Gov. Sandoval and Nevada legislators understand the issues and need for action.

This year they adopted a $5 million corporate scholarship tax-credit program. Research from demonstrates that these scholarships can increase graduation and college enrollment rates and do so at lower costs. The Washington D.C. Opportunity Scholarship program, for instance, banked a 21percent higher high school graduation rate for voucher users at a fraction of the per pupil cost of the DC Public School system.

Florida lawmakers created the largest set of private choice programs in the country starting in 1999. Today they collectively educate around 100,000 students in a state many times larger than Nevada. Independent academic research studies have demonstrated that these programs have improved academic outcomes and have provided a nudge for improvement in the district schools, which have more students than ever.

Nevada also has wisely improved its charter school law, which can also help to create new high-quality school space.

And this session the Nevada legislature passed historic universal Education Savings Accounts, the first of its kind in the nation providing all Nevada parents the opportunity to customize their child’s education to better meet their unique learning needs. This commitment from the Governor and legislative leaders will ensure the future of the Silver State is prepared for the challenges the state will face in the coming years.

Such a program could relieve public school overcrowding, create healthy competition for students and allow parents to choose the best education for their child.

When parents are empowered to make decisions, their children are more likely to succeed. This creates the foundation for the diversified economy that Gov. Sandoval has made a hallmark of his administration.


About the author


Dr. Matthew Ladner @MatthewLadner

Matthew@excelined.org

Dr. Matthew Ladner is the Senior Advisor of Policy and Research for the Foundation for Excellence in Education. He previously served as Vice President of Research and Goldwater Institute. Prior to joining Goldwater, Dr. Ladner was director of state projects at the Alliance for School Choice. Dr. Ladner has written numerous studies on school choice, charter schools and special education reform. Most recently, Dr. Ladner authored the groundbreaking, original research Turn and Face the Strain: Age Demographic Change and the Near Future of American Education, outlining the future funding crisis facing America’s K-12 public education funding. He also coauthors the American Legislative Exchange Council's annual Report Card on American Education: Ranking State K-12 Performance, Progress and Reform. Dr. Ladner has testified before Congress, the United States Commission of Civil Rights and numerous state legislative committees. He is a graduate of the University of Texas at Austin and received both a Masters and a Ph.D. in political science from the University of Houston. Dr. Ladner is a Senior Fellow with the Foundation for Educational Choice. He lives in Phoenix, Arizona.