First state revenue projections anticipate $792.2M
October 25, 2006
The technical committee that advises the state Economic Forum on Wednesday projected the so-called “minor” revenue sources feeding the state treasury will produce $792.2 million over the next biennium.
The advisory committee, consisting of fiscal experts from the Legislative and executive branches as well as the university system, also estimated those revenue sources would produce $386.3 million this fiscal year, which ends June 30, 2007.
The advisory committee produces projections for all state revenue sources. The Economic Forum then reviews and adopts the official estimates for both the major and minor revenue streams.
By law, those projections must be used in developing the state budget.
But the forum, appointed by the governor and legislative leadership, spends most of its time reviewing the major sources: The sales and gaming taxes, live entertainment tax, modified business tax, real estate transfer tax, insurance premium tax and tobacco tax.
There are more than 100 other revenue sources that go into the general fund but those sources all together make up less than 15 percent of total state revenues.
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Sales taxes, for example, will generate more than $2 billion over the next two years and gaming taxes some $1.7 billion.
Normally, the members of the forum accept the minor revenue projections developed by the budget office, legislative fiscal division and the agencies that administer those revenues without major debate or changes.
Fully a quarter of those “minor” sources are fees collected by the secretary of state’s office from corporations registered in Nevada.
According to the projections adopted Wednesday, those fees will total $105.4 million this fiscal year and just over $235 million for the 2008-09 budget cycle.
The only real debate during Wednesday’s meeting centered on projected interest income the state can count on during the coming two years and the projections for money from the unclaimed property account.
The panel agreed the FY 2007 estimate of $48.5 million in interest would drop in the following years. Deputy Treasurer for Cash Management Mark Winebarger told the panel consultants expect the interest rate the state receives on its investments to drop from 4.77 percent to about 4 percent or even a bit less next year and the year after.
The panel settled tentatively on projections of $35.8 million and $29.4 million in interest income for the next two years.
They decided not to project unclaimed property revenues until they review the projections developed by the treasurer’s office. Panel members pointed out there was a huge increase in that account in fiscal 2006, leaving more than $22 million for the general fund even after using $7.6 million out of it to bolster the Millennium Scholarship program.
Because that is more than double the usual projections for unclaimed property, panel members said they weren’t willing to project that will continue and decided to take a much closer look at those projections before voting.
The projections for all revenue sources by the agencies, budget office and legislative fiscal analysts will be presented to the Economic Forum at its Nov. 1 meeting.
The forum makes its final projections Dec. 1. But the panel returns near the end of the Legislature in May to adjust those projections so lawmakers and the governor’s office can fine tune the state budget.
• Contact reporter Geoff Dornan at email@example.com or 687-8750.