Casino tax revenues may mean more cuts

CARSON CITY -- More state budget cuts could be on the table for next fiscal year because of a dismal March gaming revenue report, Nevada Budget Director Andrew Clinger said Tuesday.

The March gaming numbers, released Friday, helped put the state budget in the hole by nearly $30 million below previously revised casino tax revenue estimates, Clinger said.

State officials will wait until the March sales tax and other revenue figures are released later this month before deciding how to proceed, he said. But if those revenues also are lower than the already revised projections, more cuts are expected to be needed by June 30, Clinger said.

Gov. Jim Gibbons would discuss any new, lower revenue projections with lawmakers, as well as cutting options, before deciding how to proceed, he said. But there aren't many ways left to reduce spending short of cutting operating budgets, he noted.

"We're probably looking at early June before we have the new forecast," Clinger said. "If the March numbers for taxes the Department of Taxation collects don't make up the difference, we're looking at another round of budget cuts."

The May tax report, which will also include critical third-quarter business tax and real estate transfer tax numbers, is unlikely to erase the new $30 million hole in the gaming tax collections, he said.

Clinger said any necessary budget reductions would be made as quickly as possible to spread them out over the entire 2008-09 fiscal year which begins July 1.

Assembly Speaker Barbara Buckley, D-Las Vegas, said legislative fiscal analysts are not as concerned yet that further budget cuts will be warranted as a result of the March gaming figures.

"Our analysts do not come to the same conclusions as the Budget Division," she said. "Certainly the numbers are not good. But their (legislative analysts') conclusion is the gaming numbers are not sufficient to justify re-projections."

The end of the month report from the Department of Taxation will be key, Buckley said.

"We're not alarmed yet," she said.

Gaming revenue collections for March were down 1.5 percent over the same month in 2007, according to the Gaming Control Board. But gaming tax collections were off by a much greater 11.1 percent.

Gibbons and lawmakers have already cut or raided various funds to come up with $913 million in savings to what once was a two-year, $6.8 billion budget. The cuts included 4.5 percent reductions in most state budgets, including the university system and public education.

Ben Kieckhefer, press secretary to Gibbons, said no decisions are near on the need for another round of budget cuts.

"We're waiting for the March tax numbers and we hope they will be decent so we won't have to go back and do more cuts," he said.

But if the news isn't good at the end of May when the March report is released, any necessary cuts will be implemented quickly, Kieckhefer said. "It's better to spread them out over time."

Further potential budget cuts for the current two-year spending plan are just one challenge facing Gibbons and the Legislature.

The planning process for the new two-year budget, for 2009-11, is now under way and Gibbons has told state officials and education representatives that cuts will be needed there as well, as much as $400 million a year.

"It's well-known we have a hole to fill in that budget," he said.

Asked how he will bridge the funding gap, Gibbons said that he will do it without new taxes.

The Nevada Saving and Government Efficiency Commission that is just being formed might provide some assistance, Gibbons said. The panel will look at efficiencies and ways to save money in the state budget.

Gibbons said he will have a better picture of what the next two-year budget will look like after the Economic Forum produces its projections later this year. The tax projections by the panel of business and fiscal experts must be used by Gibbons in balancing his next budget.

"Right now we're just looking at the projection of $400 million, and trying to get some ideas early, some preliminary ideas and suggestions from departments," the governor said. "We're simply in the preliminary planning stages as we speak."

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900.