Why today’s economic forum matters for Nevada’s future

By Kyle Roerink

Friday, May 1, 2015 | 2 a.m.

It’s a day state budget wonks anticipate every session. And it will ignite the endgame discussion about funding the state budget and levying new tax proposals.

Lawmakers, bureaucrats and lobbyists will tune in for presentations and data analysis at today’s Economic Forum meeting in Carson City. And they’re all waiting for the forum to provide one estimate: How many billions in taxes will flow into the state’s coffers during the next two years.

The forum — a five-member, independent panel of economic and tax experts picked by the governor and legislative leaders — will offer its best predictions about how the economy will perform in the next two years. That insight will pave the way for lawmakers to fund each agency in state government. It will also provoke more discussions on the new tax proposals that have disrupted the GOP, which currently holds the majority in both legislative chambers, and are expected to help fund new programs for the state’s bottom-tier public education system.

The meeting kicks off the end of the session, Mike Willden, Gov. Brian Sandoval’s chief of staff, said.

“You get the baseline final set of projections [for the budget],” he said.

WHAT THE FORUM DOES

The forum uses factors like oil prices, gaming wins, employment, housing sales and a swath of other data to offer government an accurate economic diagnosis.

The forum last met in December to give politicos a revenue blueprint to use for the beginning of the session, saying the state is likely to collect $6.3 billion. That figure is about $1 billion less than Sandoval’s proposed budget, which he unveiled in January. That gap will continue the ongoing debate about raising $438 million in new taxes for education and extending a more than $600 million sunset tax package set to expire in July.

In the past five months, the forum has been working on its latest forecast. The numbers will weigh heavily on how lawmakers appropriate money for state agency budgets in the final days of the session. The forum will also reaffirm the size of the state’s budget deficit, which state officials last estimated at $162 million. If that number holds true or increases, lawmakers will have to either cut programs or find new revenues — no matter which side they take on the existing tax proposals offered by Sandoval and lawmakers.

THE ENDGAME

The numbers will add to the growing speculation about the tax fight in the Assembly. Republicans, which have the party majority, have an ideological divide driving through their caucus. Some are firmly in the no-new-tax wing and others are willing to vote for a plan that raises money for education. A handful are pushing for different tax proposals.

With the two-thirds vote necessary to pass a tax in the state, the anti-tax wing needs 15 out of 42 votes to kill the Sandoval plan.

There’s “no appetite” for Sandoval’s plan among Assembly Republicans, Derek Armstrong, R-Henderson, and chairman of the Assembly tax committee, said.

That means Sandoval’s tax plan, passed by the Senate last week, won’t likely last in its current form in the Assembly and will likely combine with others out there. One, proposed by Armstrong, calls to boost the rates and expand who pays the state’s payroll tax (only 3,000 of the 330,000 businesses in the state pay it). A proposal from Democratic Assemblywoman Marilyn Kirkpatrick would tax music festivals, NASCAR and other outdoor events currently protected from the state’s entertainment tax.

With the Assembly in limbo, there are also questions about a special session the governor would have to call if impasse takes over and lawmakers can’t pass a budget by June 2. The conflicts over taxes have made that a likely scenario.

“We don’t know yet. We’re hoping for an end,” Willden said.

GAMING REVENUE

A gaming tax funds 27 percent of the general fund (combined with other taxes that go to other funds, gaming offers the state nearly half its revenue). And, as reported earlier this week, revenues have seen a decline in the past year in Clark County. That’s an important factor for the forum to predict and one that state agencies rely on.

The Gaming Control Board said casinos won $916.1 million in March, down 1.08 percent from the same month a year ago. Gaming revenue is also down for the fiscal year, which began July 1, by 1.99 percent.

On the Strip, where a large portion of the state’s gaming revenue is generated, casinos won $531.3 million, a decrease of 4.38 percent from 2014. Baccarat revenue there dropped 22.58 percent to $120.9 million.

“The forum is going to have to grind through ... right now the numbers are looking flat,” Willden said.