Economic Forum cuts state revenues $110 M
The Economic Forum cut state revenue projections back $109.5 million Tuesday – $21.2 million from the current fiscal year and $88.3 million from the coming two-year budget.
But that still leaves lawmakers with a record $6.83 billion in general fund revenue to spend in the budget they’re now working on.
Budget Director Andrew Clinger said, however, those cuts don’t include the more than $81 million the state owes K-12 education budgets, which also fell short because of weak sales tax revenues or the potential $31 million shortfall in property tax revenues to public schools. The state, by law, guarantees per-pupil funding to the schools so the Legislature must make up those amounts.
Senate Finance Chairman Bill Raggio, R-Reno, said he has heard the Legislature may get some good news on the property tax issue.
Clinger said earlier in the day that $31 million deficit may disappear and actually reduce the state’s obligation to schools.
Clinger said that after the more than $112 million state agencies have already cut anticipating the shortfall, the forum’s action means they will have to cut another $74.2 million to balance the budget.
The largest single share of the cut was to projected gaming revenues which were reduced $6.8 million for the remainder of this year and $38 million over the coming budget cycle for $44.8 million of the total reduction.
The sales tax projections were cut back $12 million this fiscal year and $17.6 million over the biennium for another $29.6 million. And the Modified Business Tax projections were cut back $6.25 million this year and $24.5 million over the biennium for a total of $30.75 million.
Assembly fiscal analyst Mark Stevens told the Ways and Means committee that doesn’t include the business tax reduction Gov. Jim Gibbons is supporting, which would reduce revenues there by another $14 million each year of the biennium.
In addition, a long list of smaller revenue sources were cut back by $21.8 million. The biggest change there was in revenues collected by the secretary of state’s office where projections were revised downward by $17.6 million.
There were a few bright spots, however, including interest income collected by the treasurer’s office which was increased by $11.4 million and the casino live entertainment tax which was increased more than $18 million.
When everything was added up, the total reduction in projected revenues was $109.5 million for this year and the coming biennium.
Assemblyman John Marvel, R-Battle Mountain, said the news was depressing for lawmakers throughout the building who had hoped to fund programs including all-day kindergarten.
“We don’t have the money,” he said.
Gov. Jim Gibbons said his staff should have numbers on the amount of sales and property tax the state will need to make up for school districts later this week.
But he wasn’t ready to give up on permanently lowering the business tax rate.
“I’m still committed to tax reductions, but let me talk to you tomorrow.”
He said the forum’s cuts weren’t as steep as he had feared they would be.
“We had heard it was going to be a lot worse than it was,” he said.
He also pointed out that the reduction is only a tiny fraction of the state’s $6.8 billion general fund budget.
• Contact reporter Geoff Dornan at email@example.com or 687-8750.
By the numbers
Revenue 2007 2008-9
Sales tax $1 billion $2.24 billion
Gaming $821 million $1.79 billion
Business tax $280 million $642 million
Insurance $262 million $609 million
Cigarette $115 million $232 million
Real estate $124 million $259 million
Entertainment $129 million $292 million
Other $396 million $776 million
Total $3.1 billion $6.83 billion
NOTE: Columns may not total exactly because of rounding.