Some sunsets may be extended to make up revenue losses
November 2, 2012
Nevada Budget Director Jeff Mohlenkamp conceded Thursday that at least some of the one-time tax hikes approved by lawmakers and Gov. Brian Sandoval in 2011 won’t “sunset” as of next July and will have to be extended to balance the state’s 2014-2015 budget.He made the statement after the Technical Advisory Committee that analyzes the so-called minor revenues for the state Economic Forum projected those revenue sources will generate a half-billion dollars less over the next two fiscal years than they are bringing in this biennium.After the advisory committee adopted the staff recommendations generated by the legislative fiscal staff, budget office and state agencies, LCB economist Russell Guindon said the total revenue projection for the coming two years was $986.5 million. He said that compares with the actual collections for fiscal 2012 and projected collections for this fiscal year totaling $1.47 billion.The difference: $469.2 million less to the state’s General Fund.“We’re going to need most of it,” said Mohlenkamp referring to the one-time revenues. “Once we get the numbers we’ll sit down and get serious about what’s in and what’s out.”He said there’s a strong possibility that the governor will keep some of the taxes from sunsetting, but let other levies expire.“He hasn’t made that decision yet,” Mohlenkamp said, adding that the administration will know more after the Nov. 9 initial meeting of the full state Economic Forum.Most of the shortfall is caused by the scheduled tax sunsets and other one-time legal changes the 2011 Legislature and governor backed in their efforts to balance the current state government budget. Since the law requires the Economic Forum to build revenue projections using existing law and not speculate on what changes might be made by the governor and Legislature, the revenues scheduled to sunset must be deducted from projections.“It’s hard to look at this as apples to apples because so much has been changed,” said Bill Anderson, chairman of the Technical Advisory Committee.Guindon agreed, saying, “I can’t give you apples to apples.”He said the sunsets include the loss of more than $100 million in Net Proceeds of Mines revenue which, under current law, will go back to coming due at year’s end instead of being paid a year in advance. The result: no money from that source in 2014. The changes also include, among others, a return of a Governmental Services Tax to the highway fund for a net loss to the General Fund; cutting the business license fee in half to its original $100 a year; loss of Governmental Services Tax commissions and penalties; and a one-time $60 million drop in unclaimed property revenue.The projections approved Thursday don’t consider the major state revenue generators which are set directly by the full Economic Forum. Those include sales taxes, casino-related taxes, live entertainment, Modified Business, Real Property Transfer and Insurance Premium Tax. Those revenue streams are not affected by the sunsets.