Nevada expected to bring in $6.2B in taxes in next two years

By Las Vegas Sun Staff (contact)

Friday, May 1, 2015 | 6 p.m.

A panel of fiscal experts determined the state will collect about $6.2 billion in taxes in the next two fiscal years — a baseline figure lawmakers will use to finish the biennium budgeting process.

The Economic Forum, a five-member, independent panel of tax and economic experts selected by the governor and legislative leaders, announced the tax estimate at a meeting in the Legislature today.

The forum in December had projected a higher figure that did not take into account more than $150 million in tax credits for a Tesla battery factory and a film incentive program, among others.

Lawmakers and lobbyists were eagerly awaiting the news, because the forum’s predictions will propel ongoing conversations about raising new taxes or cutting state spending for the 2016-2017 budget.

“If somebody was hoping for additional money, it’s not happening,” said Marvin Leavitt, a forum member.

The forum’s figures are the result of forecasts of revenues in gaming, retail, mining, insurance, payroll and other areas that support the state’s general fund through taxes. It also assumes $600 million in taxes set to expire July 1 will be extended.

Sandoval has called on lawmakers to make the $600 million in “sunset” taxes permanent. He’s also proposed a tax that would raise $438 million annually.

The forum’s $6.2 billion projection is more than $1 billion less than what Gov. Brian Sandoval and state agencies are asking to spend.

Sandoval requested a $7.3 billion budget — a $700 million increase from the current budget. The agencies requested $7.7 billion.

Data from numerous sources help the forum create its projections.

A handful of state economists and Moody’s Investor Service provided the forum information about how the national and local economies impact the tax revenues the state collects for the general fund.

The forum considered factors ranging from gaming to oil prices, interest rates, weather patterns, a high-profile boxing match, outdoor festivals, real estate, construction and unemployment.

The forum’s projections don’t show huge economic gains in the coming years but anticipate a continuing slow climb. The forum will send its analysis to the governor and lawmakers to examine.

Much of what was said by economists is good news for the state: Nevada is growing jobs faster than 46 states — adding 100,000 since 2010.

By 2016, the state will recover 175,000 jobs lost during recession and should add an additional 97,000 positions by the end of 2017, Bill Anderson, an economist in the Department of Employment, Training and Rehabilitation, said in a presentation to forum members.

Nevada still has one of the nation’s highest unemployment rates at 7.1 percent. The rate is 1.6 percent higher than national rate, down from a 4 percent gap during the recession, he said.