General Fund revenue collections are $37.99 million ahead of the forecasts used to build the state budget, according to reports presented to the Economic Forum on Tuesday.
Actual collections for the fiscal year so far total $861.2 million, according to legislative fiscal staff. But LCB Economist Russell Guindon pointed out that that isn't the whole revenue picture since some of those revenue sources have only reported the first quarter of the fiscal year's collections even though we're half-way through the sixth month. Only the sales tax and gaming taxes are reported monthly, but even sales tax has only been reported from July through September and gaming collections through November.
Of the state's major revenue streams, sales, the modified business tax, real property transfer tax and live entertainment tax are all ahead of projections year to date.
Guindon also made clear that, while a bit ahead of projections, state government is far from rolling in dough.
With reversions and transfers added in, Senate Fiscal Analyst Mark Krmpotic told the forum the overall ending fund balance in the state treasury is about $79 million ahead of what it was projected to finish fiscal year 2011 - a total of $323 million. He said reversions of unspent money came in $36 million higher than expected, totaling $84 million.
Members raised questions about the $155 million line of credit from the Local Government Investment Pool in the budget. Guindon told them essentially the goal is not to use that line of credit, that it was included to mathematically balance the budget as required by the state constitution. Guindon pointed out it was contained in the last two-year budget as well but never drawn down and that the goal is the same this biennium.
Reports by professors from both the University of Nevada, Reno and the University of Nevada, Las Vegas on everything from the tourism economy to housing gave forum members a picture of an economy beginning to recover from the recession - but made it clear that recovery won't be fast, especially in the housing market and construction industry.
Stephen Brown of UNLV's Center for Business and Economic Research said housing prices are dramatically lower than at the peak but that once the economy recovers somewhat, "we're going to be seeing depressed home prices as something that moves people into Las Vegas."
He said he expects the gaming industry to show growth in the coming years.
Rossi Ralenkotter, head of the Las Vegas Convention and Visitors Authority, said visitor volume is up, as is spending both by individuals and convention delegates. He said the room tax is also generating more than budgeted - some $43 million.
Member Matt Maddox pointed out that Guindon's economic model projects the state could decline by 7.4 percent in the second half of this fiscal year and still hit the forum's May 2 projections. He termed that projection "fairly draconian."
Guindon agreed, saying the model produces that result but that a "reality check" quickly makes that very unlikely.
The forum, a body of five business professionals appointed to help the state project revenues, didn't meet this time to project but instead to get an interim update on where the state stands financially. This meeting was added to their biennial agenda by the 2011 Legislature. Its projections before and at the end of each legislative session must be used in building the state budget.