Published Wednesday, May 1, 2013 | 4:16 p.m.
Updated Wednesday, May 1, 2013 | 5 p.m.
State legislators got $36.7 million more to play with today as they work to craft the state’s budget.
The state’s Economic Forum, a nonpartisan group of independent financial experts, updated its economic forecast for Nevada’s next two year budget in a meeting at the Legislature. The added money projected by the panel barely changes Gov. Brian Sandoval’s $6.5 billion budget.
And the funds don’t help Democrats, who plan to introduce a tax plan sometime soon as they search for ways to pay for an additional $300 million in education. Should the forecast have come in significantly higher, they would’ve been able to push for a smaller tax increase to pay for education programs that Sandoval has not funded in his budget.
But the story’s not done yet. There’s a few more million dollars available as soon as state fiscal staff calculate a separate group of forecasts that are split from the Economic Forum’s work.
Even the $6.5 billion in the governor’s original budget is no longer accurate. There have been more than 780 amendments to the budget since the governor introduced it in January, said Rick Combs, director of the Legislative Counsel Bureau, which processes the amendments for the Legislature.
Sandoval has already introduced a budget amendment worth $77 million.
The shifting budget sands are in part due to the nature of the budget — how much revenue will actually come in over the next two years is all a prediction.
Noting the inherent uncertainties of predictions, the forum made its decision after a six-hour meeting during which the forum heard from state economists, fiscal experts and independent analysts.
“We do live in a period of tremendous economic uncertainty,” said Ken Wiles, chairman of the Economic Forum. “We’ve seen even throughout discussions that are subject to a considerable amount of information that we just don’t know.”
The process is essentially like an updated weather forecast. But instead of cold fronts and chance of precipitation, the four-member economic forum considers things like growth in sales tax revenues and the illnesses of Celine Dion. (If the singer doesn’t perform, the state doesn’t collect any live entertainment tax revenue.)
The forum met last November and approved the $6.5 billion Sandoval has used in his budget.
Economic conditions have changed since last November, so this group met to adjust the forecast to better reflect the current economy.
But in some cases they had trouble with the forecasts.
“On this particular one we are sort of just at a dartboard and we’re throwing darts at it,” said Marvin Leavitt, a member of the forum, in regards to the uncertainty surrounding Obamacare’s insurance mandate and its effect on state insurance premium tax collections.
General economic trends were positive, hence the added money to the budget. Most of the new money comes from increases in taxes collected on property transfers as well as more in payroll and sales tax collections due to increasing employment and tourism numbers.
Those trends also helped the current budget that continues through June of this year. The Economic Forum added $7.9 million to this year’s budget.