CARSON CITY -- Nevada's slowly improving economy has produced $21 million more in tax revenue than anticipated when the Legislature and the governor passed a $6.2 billion general fund budget in June.
If the improvement continues, the state might not have to take out a $160 million loan to balance the current budget. Instead, state government could end up with hundreds of millions of dollars in extra revenue when the Legislature next meets in February 2013.
The surprising comments came Tuesday during a four-hour state Economic Forum meeting.
Forecasters and state analysts predicted a modest economic improvement. The state unemployment rate, now at 13.4 percent, is expected to drop by 1 percentage point by the end of next year.
A legislative report also showed that state tax revenues for the first three months of the fiscal year that began in July have brought in $861 million. That is 2.5 percent, $21.2 million, more than the Economic Forum projected when it met last on May 2.
Revenues for the fiscal year that ended June 30 were $38 million above the forum's projections. State agencies also returned an unexpected $40 million they did not spend in the last fiscal year to the current budget. State Senate analyst Mark Krmpotic said the unappropriated state budget balance on June 30 was $324 million, $80 million more than anticipated.
Forum member Matt Maddox said that potentially the state could end up with $400 million more than the projections used in building the budget.
Because of the good economic news, legislative fiscal analyst Russell Guindon said the state might not have to take a $160 million line of credit, a borrowing step that legislators authorized if it were necessary to balance the budget.
Guindon said he feared sounding too optimistic about building a huge surplus because some people might conclude the "fiscal nightmare" of the past few years is over.
"We don't want people to say we are $500 million to the good and we are saved for the 2013 session when we are not," he said.
The Economic Forum is a group of five business leaders who decide how much money is available for state government to spend. Their projections are binding on the Legislature and the governor in preparing the state budget. Forum members will not be making any projections until their December 2012 meeting.
At the start of Tuesday's meeting, which was teleconferenced between Las Vegas and Carson City, members named Ken Wiles of Las Vegas as chairman of the Economic Forum. Wiles, managing director of Acceleron, was appointed to the forum by Gov. Brian Sandoval in August. He previously spent 17 years as a finance professor at the University of North Carolina.
Contact Capital Bureau Chief Ed Vogel at email@example.com or 775-687-3901.