Friday, May 2, 2003 | 10:59 a.m.
CARSON CITY -- There's a tiny bit of good news about the state's financial future but it's peanuts in the overall gloomy budget picture, officials said Thursday.
The latest Economic Forum projections are that tax collections over the next two years will increase by $10 million more than the forum predicted five months ago.
Gov. Kenny Guinn welcomed the news that the more tax revenues are expected but he called it "small change in a $4 billion budget."
Guinn cautioned that the forum did not have any information from March, April and May, the months when the Iraq war was under way and when the health threat of SARS hit.
But Cary Fisher, chairman of the forum, said that even with those factors, the forum members "see the economy as getting better unless there is a major shock. But there is a lot of uncertainty."
He said there should be a "nice healthy biennium and we will get back on track."
Guinn said the prediction by the forum "does not change the fact that Nevada is facing a $700 million revenue shortfall in the 2003-2005 biennium."
The forum predicted that tax collections next fiscal year will be $1.901 billion and $1.997 billion the following year.
Guinn presented a $4.8 billion budget for the next two years but the economic forum is forecasting tax revenues of $3.9 billion.
Guinn said that "while Nevada's two major revenue sources -- sales tax and gaming tax -- have been declining, our population continues to soar."
However the taxes from casinos are coming in higher than predicted in November when the forum made its last calculation. The gaming tax is expected to yield $576.8 million this fiscal year, up about $4 million from the previous prediction.
The forum suggested that gaming revenues will grow 3.7 percent next year and 4 percent the following year for an extra yield of $10 million over the previous prediction.
Fiscal experts from the legislative and executive branch said two hotels in Las Vegas are adding towers and Steve Wynn's Le Reve resort is due to open in March 2005.
Past meetings of the economic forum took on more importance because the figures were used by the Legislature to either cut or add more to the budget.
If the forum's May predictions were higher than its November projections, the lawmakers had more money to spend. If it lowered its expectations, the Legislature had to scale back.
But this year, there is a $700 million shortfall already in Guinn's budget. And he wants a $1 billion tax increase to pay for $300 million in additional programs.
And some legislators are talking about adding to the Guinn budget.
Assemblywoman Chris Giunchigliani, D-Las Vegas, the chairwoman of a legislative budget subcommittee, started discussion Thursday about adding 10 days to the school year of 180 days. Each extra day would cost $10 million.
Giunchigliani also proposed looking at a starting salary of $30,000 for teachers. The current starting salary is about $25,000.
"We're not competitive," in teacher recruitment, she said.
Assemblyman Morse Arberry, D-Las Vegas, endorsed the $30,000 salary saying, "We must look at trying to recruit more teachers."
Senate Majority Leader Bill Raggio, R-Reno, said the proposed $100 million from lengthening the school year would be above the budget suggested by the governor. "We're really talking big dollars," he said of the proposal.
"We don't even have even have a tax plan in focus yet," Raggio said. "So it's a little early to be talking about adding hundreds of millions of dollars over and above what the governor suggested.
"The governor is already being criticized for asking for $900 million," Raggio said.
Giuchigliani said if taxes are raised they should "be put in education." She said five days might be added in the second year of the biennium. But that issue will be discussed next week at a meeting of the subcommittee.
The Economic Forum predicted the state will collect $687.8 million this year from the sales tax and that will grow by 5.1 percent next year and 5.6 percent the following year.
Gaming taxes will yield $608.7 million this fiscal year and rise by 3.5 percent next fiscal year and jump by 4.6 percent the following year, according to forum projections.
The casino entertainment tax is predicted to show a healthy increase. It is expected to yield $70.9 million this fiscal year and then increase by 7.3 and 7 percent respectively in the next two years.
Frank Streshley, senior research analyst for the state Gaming Control Board said the hotel-casinos in Las Vegas have added nightclubs that charge an entrance fee of $10 to $20 plus $5 and up for a drink. And he said there is sometimes a more than two-hour wait to get in.
The state is expected to collect $168 million this year from the insurance premium tax and it will grow by 7 percent in each of the next two fiscal years.
Collections from the cigarette tax are expected to remain stagnant during the next two fiscal years. Lynne Knack of the state Taxation Department, said although there is an increasing population, the per capita consumption of cigarettes is declining.
Those collections are expected to be $41.8 million in each of the next two fiscal years.
The business license tax that will yield $78.7 million this year is expected to rise 3.2 percent in each of the next two fiscal years. An employer pays $100 a year per worker for this tax.
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