State agencies turned in recommendations Wednesday detailing how they could reduce general fund spending by 8 percent this year and next if tax revenues don't recover.
Sales taxes and the seven other revenue sources, which combine to make up 90 percent of general fund revenues to the state, are down 7.4 percent overall, according to budget office estimates.
That is a difference of $57.57 million in just the first three months of the state's two-year budget cycle.
Director of Administration Andrew Clinger said those recommendations are just that, recommendations, and are considered confidential. He said the public will be told where and how deep the actual cuts are once the governor makes those decisions.
He said his staff has already begun reviewing the recommendations. Gov. Jim Gibbons expects to announce his decisions in January.
Agencies were told in mid-October that sales tax revenues, which make up 32 percent of the general fund, were lagging behind projections used to build the state budget. Initial numbers, Clinger said, showed the state might have to cut spending by 5 percent.
That was revised upward to 8 percent in November as the sales tax numbers continued to slump. That revenue source is now $19.68 million - 7.5 percent - behind the projection.
Clinger said an 8 percent cut would total about $285 million.
Since then, the situation has gotten worse with other major state revenue sources also falling behind projections made by the Economic Forum in May.
Clinger said the other big piece of the puzzle, gaming percentage fee collections, is off 5.7 percent but is expected by Gaming Control Board analysts to recover in the coming year.
He said no reduced projections have been made for gaming revenue, which accounts for 26 percent of the general fund.
Budget office officials said the shortfalls were estimated by comparing actual collections for each revenue source with projected first-quarter collections.
Projections are determined by figuring out what percentage of the total revenue for each revenue source is actually collected in the first quarter of the fiscal year, then applying that percentage to the total for the year.
A spokesman said that calculation is necessary because different taxes generate more or less than 25 percent in each quarter. Sales taxes, for example, generate a much larger percentage during second quarter, which includes Christmas shopping.
First quarter collections in both the Modified Business Tax and Real Property Transfer Tax are down double-digit percentages from projections, while the Insurance Premium Tax is 9.6 percent - $6.9 million - short.
The business tax, which produces just under 10 percent of general fund revenues, was off 11 percent - a total of $7.98 million. The Real Property Transfer Tax, which produces 4 percent of revenue, was down 19 percent - a total of $6.2 million behind projections.
In addition, the Live Entertainment Tax is off 1.6 percent, the cigarette tax 1.3 percent and liquor tax revenues 4.4 percent but all three together make up just 9 percent of total revenues and their share of the deficit totals just $1.3 million.
Gibbons has said the cuts won't be 8 percent across the board. He said he and his cabinet will review the recommendations from all agencies to determine how much of a reduction each can absorb and what that will do to programs. He said the goal is to do the least damage.
He has also exempted several areas from cuts, including K-12 education, prisons and public safety.
• Contact reporter Geoff Dornan at firstname.lastname@example.org or 687-8750.