Nevada state budget news better than expected
Lawmakers who feared they might have to cut another $100 million from state programs to balance the budget got some good news this week.
Property tax revenues they feared would come in $37 million lower than originally projected, instead came in $64 million higher than projected.
Mostly because of weak sales tax collections, the Economic Forum had already scaled back projected revenues $109.5 million. Anticipating that reduction in revenues, state agencies had already cut back budgets by about $100 million.
But the state was bracing for another hit because it is legally required to make up any shortfall in the portion of sales taxes and one-third of any shortage in property taxes, which go to school districts. That law was passed to protect public school funding from any economic downturn in the middle of a school year.
The shortfall in the Local School Support Tax revenues was actually worse than the $81 million fiscal experts predicted a week ago – $118.6 million.
But Budget Director Andrew Clinger said the property tax projections reversed themselves, instead coming in $64 million higher than projected.
That means the added hit to the state treasury is only $54.6 million.
And Clinger said Gov. Jim Gibbons has already made more than $20 million in added cuts.
The bottom line, he said: lawmakers only need to find $29.6 million in additional cuts to balance the budget for the next two years.
Or, as one legislative expert pointed out, lawmakers could increase revenues by about that amount if they reject Gibbons’ proposal to permanently reduce the Modified Business Tax from .65 percent to .62 percent. All they have to do is nothing, because the one-time reduction in that tax approved by the 2005 Legislature sunsets July 1 and the tax automatically goes up.
That would add an estimated $27.3 million to the state’s revenue from that source over the next two years.
• Contact reporter Geoff Dornan at firstname.lastname@example.org or 687-8750.