Forecast: No big increases seen in Nevada revenues
CARSON CITY, Nev. (AP) — An independent panel of fiscal experts Wednesday predicted Nevada will have $5.8 billion in tax revenues to support state government in the upcoming budget cycle, about $36 million more than originally projected by the Economic Forum in late November.
In a daylong hearing, forum members weighed trends in casino gambling and unemployment and pondered the unknown consequences of federal health care reform in trying to predict how much money will be available to fund state government.
The forum also revised its projections for the remaining two months of the current fiscal year, adding $7.7 million to mix.
Republican Gov. Brian Sandoval has included extending some taxes that would otherwise expire in June to balance his $6.5 billion general fund spending plan.
Sandoval, in a statement late Wednesday, said the forum's forecast "is a sign that we have made progress in creating jobs, diversifying our economy and getting Nevadans working again."
He said he'll propose that the combined $44 million in extra revenue be directed to K-12 education, health and human services, economic development and to the state's rainy day fund.
The extra money is a pittance in the overall budget picture and is far short of what Democrats say is needed to restore some of the deep cuts to education made in past years. Nevada's economy crumbled under the weight of the recession.
Democrats were awaiting the forum's final forecast and said they will introduce their own plan to bring in more money. Early in the session, they unveiled an education agenda that included full-day kindergarten statewide, expanding English language learner programs and reducing class sizes — priorities that carry an estimated price tag of more than $300 million.
On existing taxes, forum members projected sales and use tax collections, the largest source of the state general fund, will grow 5.4 percent in 2014 and 5.5 percent in 2015, bringing in a total of $1.98 billion.
Casino taxes, the second largest source, were forecast to increase 3.1 percent and 4.3 percent in the upcoming two years, generating nearly $1.5 billion.
Forum members struggled over projecting insurance premium tax revenues, the next largest generator, because of uncertainty over how the federal Affordable Care Act will affect predictions.
Ken Wiles, forum chairman, said states still don't know the final rules for implementation or whether employers will respond to mandates to provide insurance by cutting full-time employees to part-time status to avoid providing insurance. Such actions could alter patterns of purchased insurance policies.
"With all these unknowns, we don't even know the things we don't know," Wiles said.
After approving the tax projections, Wiles again cautioned that economic uncertainty will continue and there is a "considerable amount of information we just don't know."