TAC OK’s $1.34 billion in ‘minor’ General Fund revenues for coming biennium
The Technical Advisory Committee on Wednesday approved projections for a long list of so-called “minor” General Fund revenues.
That is a total of $1.34 billion for the coming two-year budget cycle.
Legislative Economist Russell Guindon told the members of the technical panel that is $32.8 million more than analysts thought would be available just a month ago. The numbers were updated with first quarter figures for the revenue sources and one additional month for those streams that report to the state monthly. There are some 70 different revenue streams in the minors including licenses and fees and levies such as the liquor and cigarette taxes.
But because of the economic shutdown caused by the pandemic, that total is significantly lower than the $1.5 billion in minor revenues projected by the 2019 Legislature for the current biennium.
Guindon told the panel the difference comes to about $164 million but he said with legislative actions — primarily collecting two years of the net proceeds of mines tax this year and taking the entire Government Services Tax for the coming year, nearly all of that shortfall is erased. The year-in advance of mining tax is estimated at $62 million based on what the major mines in the state expect their tax would be for next year. Taking the entire General Fund share of the Government Services Tax instead of 25 percent of that piece would net the state another $71 million to cover the shortfall. Normally, that extra 75 percent of the GST goes to the Highway Fund.
Both those decisions are one-time actions. The GST will return to 75-25 the following year and the state will collect zero net proceeds of mines after the first year of the coming biennium.
On top of those two revenue decisions, Nevada is projecting it will collect $14 million from the one time tax amnesty letting people who owe the state money escape interest, fines and fees if they volunteer to pay up this coming year.
The recommendations will be presented to the five-member Economic Forum when it meets Dec. 3. At that meeting, the forum members will review the TAC projections and make their projections for the seven so-called “major” General Fund revenue streams.
The largest piece of the pie is the sales and use tax that generates more than $1.2 billion a year followed by gaming taxes, the largest of which is the gaming percentage fee. The other majors are the Live Entertainment Tax, Modified Business Tax, Insurance Premium Tax, Real Property Transfer Tax and the Commerce Tax that also generate significant amounts of revenue.
The forum’s projections must be used by the governor and the Legislature to develop the state’s biennial General Fund budget unless the governor and lawmakers support increasing or creating new taxes.