State revenues: Not good news, but not as bad as predicted
Even though state revenues continue to fall short of what they were a year ago, through October they are running ahead of the Economic Forum’s most recent projections.
According to figures compiled by the Budget Division, state revenue collections from both gaming and the sales tax have been above the most recent projections every month of this fiscal year.
The gaming Live Entertainment Tax and liquor tax are also above what was expected. Only the cigarette tax and commercial recordings collections are below those projections.
Director of Administration Andrew Clinger said, however, the state is still running well short of the revenue projections originally used to build the current biennial budget.
“But we’re finally at the point where revenue is coming in better than our forecasts,” he said.
He said his office and the Legislative Fiscal Division have made four or five forecasts since September 2007.
“This is the first time in over a year we’ve seen revenues actually exceeding forecasts,” he said.
Added together, that means the state has just shy of $30 million more in revenues for the first five months of this fiscal year than the forum predicted.
And because a large portion of that is in the sales tax category which also funds public schools, the state can add another $20.5 million to the pot that it won’t have to use to keep school districts whole. School district per pupil funding is guaranteed by the state.
Clinger quickly pointed out that doesn’t mean the state’s financial picture is suddenly rosy again.
“It’s still negative. We’re still seeing revenues decline. But they’re not declining as bad as projected.”
And he said it doesn’t mean anything can be put back in the budget because his office is required by law to use the forum’s December projections to build the budget.
Any additional revenue would have to be held in the treasury until the forum authorized its use at its May meeting.
Clinger’s office is in the process of trying to build a budget for the coming biennium which fits within the Economic Forum’s projections for the coming two years. The total projected General Fund revenue for fiscal 2010 and 2011 is just $5.65 billion. That is $1.2 billion less than the $6.8 billion originally authorized this budget cycle. And that doesn’t include an estimated $1 billion in “rollups” ” costs that will have to be added to cover unavoidable increases caused by contract increases for such things as rent and inflationary increases in other areas.
The challenge for Clinger and executive branch agencies is to build that budget without tax increases since Gov. Jim Gibbons maintains he will veto any tax hike that comes across his desk.
Contact reporter Geoff Dornan at email@example.com or 687-8750.