$217M added to revenue total
The Economic Forum on Monday added $217.69 million to the total amount of revenue the state has to spend this budget cycle.
Of that total, $97.9 million is in this current fiscal year. The remaining $119.73 million is added to revenues projected for the coming two-year budget cycle.
The forum’s actions will raise the $5.34 billion they projected for the General Fund in December to about $5.45 billion. That raises the governor’s total budget – including the other revenues he shifted to the proposed budget – to just more than $6 billion in General Fund spending.
The total General Fund available this fiscal year is $3.18 billion. For fiscal 2012, the total is $2.66 billion and in 2013 $2.79 billion.
Forum member and former state budget director Mike Alastuey said the adjustments “are relatively minor in terms of overall revenues.”
He said they amount to only about 2 percent net difference.
Chairman John Restrepo said the forecasts are “realistic.”
“This is where we thing we are heading over the next two years,” he said.
The biggest increase was in the state’s share of the sales tax, projected to rise $68.99 million for the 2012-2013 biennium and $27.4 million this fiscal year.
And that amount doesn’t include the estimated $113 million in sales tax revenue the forum’s sales tax projections will add to the Local School Support Tax. If lawmakers and the governor choose, they could back some of that added revenue out of the state’s contribution to K-12 education budget.
Among the items driving the sales tax increase are the purchases by mining companies and purchases for the Ruby Pipeline project, construction of a major natural gas line across Northern Nevada.
Altogether, the state portion of the sales tax will generate $784.8 million this fiscal year and $1.628 billion for the coming budget cycle.
The only revenue categories that were projected to come in lower than the amounts the forum projected in December are the gaming tax, the state’s second largest revenue generator, at $1.34 billion during the biennium, and the portion of the business tax paid by banks. While the decrease in the business tax was just $1.1 million, the loss in gaming revenue was more significant – $10.6 million for the rest of this fiscal year and $32.8 million in the coming biennium.
“Consumer confidence is still at near record lows,” Budget office analyst Janet Rogers told the forum. “It does seem to be affecting what we’re bringing n in gaming.”
One revenue stream, the insurance premium tax, was so stable according to analysts that the forum stuck with their December projections of about $240 million a year.
The totals include not only the eight revenue sources which feed the General Fund but more than 100 smaller revenue streams referred to as the minor revenues. One of those – the net proceeds of mining tax -provided the forum with a pleasant surprise Monday as Fiscal Division analyst Russ Guindon informed members because gold prices remain at $1,500 an ounce that Nevada mines were increasing their tax payments by $23.8 million.
Overall, those minor revenues are projected to increase $72.3 million compared to December, bringing in just less than $1.2 billion of the total.
Gov. Brian Sandoval plans to give a speech tonight discussing the actions of the forum and Nevada’s revenue status. He said the forum projections are a strong indicator Nevada’s economy is on the road to recovery.
Sandoval pledged that he will direct the additional money to K-12 education.
Democratic leadership plans to close K-12 education budgets in a joint money committee session today. Ways and Means Chairman Debbie Smith, D-Sparks, and Senate Finance Chairman Steven Horsford, D-Las Vegas, made it clear they believe all of the new money should go to public schools.
Horsford said with more than a billion in overall cuts to K-12 funding, the $217 million is a drop in the bucket and that lawmakers will find the money to restore those budgets.
“The first step is to determine the level of funding to protect the education of our children,” he said.