CARSON CITY, Nev. (AP) — A panel of fiscal experts Friday projected Nevada tax revenues will bring in $5.8 billion over the next two year budget cycle, about $343 million less than current spending levels.
The forecast by Nevada's Economic Forum is based on existing law, under which a number of taxes would expire June 30. Gov. Brian Sandoval has said his budget proposal for the 2013-2015 biennium will extend at least some of those taxes, which would essentially maintain existing revenue levels, perhaps add a small cushion, if the economy continues to improve.
State agencies have submitted budget requests totaling $6.4 billion, slightly above the current $6.2 billion budget.
Forum projections are a major step in building Nevada's general fund budget to pay for schools, social services and other government programs. Under state law, the governor and lawmakers cannot exceed the revenue forecast unless they identify and approve a specific funding source to pay for added services.
Sandoval will release his budget plan to state lawmakers in January, before the Nevada Legislature convenes Feb. 4.
The forum on Friday adopted moderate growth revenue projections for sales and casino taxes, which combined account for roughly half of the state general fund.
For gambling taxes — the bulk of which are based on how much casinos win from gamblers — the forum projected revenues would increase 3.3 percent in 2014 to $727.3 million and 4.3 percent in 2015 to $758.8 million. Sales and use tax collections of $968.6 million and $1 billion were forecast for the next two years, representing increases of 4.7 percent and 4.1 percent, respectively.
Looming over the session was the political discourse in Washington and efforts to avoid the "fiscal cliff," a package of automatic spending cuts and tax hikes set to take effect in January unless Democrats and Republicans can reach accord. Many economists believe failure to forge an agreement could send the country back into recession.
"This period of time at least from my perspective is perhaps the greatest period of economic uncertainty that we've experienced, certainly that I've experienced," said Ken Wiles, forum chairman and managing director of Acceleron Group, a financial and restructuring consulting firm.
Wiles said whatever happens in Washington "will have an effect on our state budget," influencing consumer confidence and consumer spending — critical elements in Nevada's tourism-dependent economy that was hard hit by the Great Recession and is still trying to recover.
"All of those items will affect any of the ultimate outcomes that we project," Wiles said of the forum's projections.
The Economic Forum will meet again May 1 as the Legislature heads into its final month of session to re-evaluate its numbers based on economic conditions and make any changes before a final budget is passed.