Revenues projected to fall $500 million
Experts on Wednesday projected the state will receive hundreds of millions less from the so-called “minor” General Fund revenues in each of the coming two budget years.
Most of the reduction is caused by sunset clauses that eliminate or reduce several of those revenue sources at the end of this fiscal year.
The Technical Advisory Committee to the Economic Forum projects the minor revenues in advance of the Dec. 1 forum meeting. They make up just about a quarter of the money flowing to Nevada’s General Fund each year – a total of $811.6 million in fiscal 2010.
For the first year of the coming budget cycle, the estimate for the minors drops to $509.66 million, a decrease of $301.9 million compared to 2010. For the second year, fiscal 2013, the committee projected revenues of $573.27 million, a $238.3 million difference.
While those decreases are 30 percent or more, most of the drop is caused by the fact the forum and its advisory committee must project based on existing statute. That means they must assume the tax increases and one-time fund sweeps approved by the 2009 Legislature and the 26th special session last February will sunset and the revenues generated by them go away.
They range from sweeping the Indigent Accident Account to taking two different categories of property tax from Clark and Washoe counties, taking the voter supported room tax hike dedicated to public schools and the so-called temporary increases in fees such as on mining claims.
If those sources of money are continued, the decrease is very small. In this fiscal year’s projection, which includes those sunseted revenues, the decrease is less than $40 million.
The forum is an independent panel of five business finance experts appointed to project state revenues. Both the governor’s office and lawmakers are required to use those projections in developing the state’s two-year budget.
If the governor and lawmakers want to spend more than the forum projects, they have to propose tax increases and other revenue generators to pay for it.
The forum meets Dec. 1 to officially make those its projections.
While the forum members project the six major revenues themselves, they normally accept the technical advisory committee’s estimates for the “minors.”
The major revenues include the sales and use tax, the gaming percentage fee and casino live entertainment tax, which between them bring in two-thirds of total General Fund cash. They also include the Modified Business Tax, Real Property Transfer Tax and Insurance Premium Tax.
The rest of the roughly 100 revenue streams that flow to the General Fund are grouped in the minor category.