Nevada Economic Forum adds $42.8 million to what lawmakers can spend this session
The Economic Forum added just $42.8 million to the total General Fund revenue lawmakers and the governor can spend this session.
Of that, $31.4 million is in revised projections for the remaining months of Fiscal Year 2019 that ends June 30. The added 2019 funding can be used for one-shot and supplemental expenditures this year or carried forward into Fiscal Year 2020 and used there.
Forum members voted to increase revenue projections they made Dec. 3 by just $11.4 million for the coming two-year budget cycle.
That raises total General Fund for 2019 to $4.26 billion. For the 2020-2021 budget cycle, the total General Fund available is $8.847 billion. For the three years combined, that is a total of $13.4 billion. That reduces to $13.1 billion after $338.2 million in tax credits are deducted.
Of the $42.8 million increase, $24 million came from the Sales Tax revenues that exceeded December projections.
Linda Rosenthal, chairwoman of the five-member forum, said outside of that, the forum pretty much stuck with the projections they made in December for the coming two fiscal years.
The governor’s office is planning to seek legislation that eliminates the scheduled reduction in the Modified Business Tax. That would generate something on the order of $100 million more for Gov. Steve Sisolak to spend. He has also recommended not sending the 25 percent of Governmental Services Tax that now goes to the General Fund back to the Highway Fund, adding another $20-plus million to the available cash.
Exact projections on how much those two proposals would generate are still being worked out by Finance Office staff.
The forum was created after the 1991 over-projected General Fund revenues that, because of a recession, didn’t materialize. It consists of five appointees, all experts with business and public finance expertise.
The projections the forum makes must be used by the governor’s office and Legislature in building the state’s budget. If they want to spend more than the revenues projected, they have to identify a source for those extra revenues.
The largest single piece of revenue comes from the sales and use tax which is projected to bring in $2.63 billion in the coming biennium and a total of $3.86 billion when FY2019 is added in. Second is gaming percentage fees at $1.57 billion, $2.34 billion when FY2019 is added in. Those two and the other five major revenue sources combine for a total of $3,57 billion in 2019 and $7.47 billion in the coming biennium — $11 billion of the $13.1 billion total.
The other major revenue streams are the Live Entertainment Tax, Modified Business Tax, Real Property Transfer Tax, Insurance Premium Tax and Commerce Tax.