CARSON CITY — A revised state revenue forecast gives lawmakers $42.8 million more to work with for the two-year budget cycle that begins in July, a nominal increase equal to 0.3 percent of general fund state spending through mid-2021.
The revised projections on revenue from sales, gaming, business and real estate taxes approved Wednesday by the state Economic Forum form the basis of the 2019-21 biennial general fund budget state lawmakers are now assembling.
Other economic data presented at the forum’s meeting showed state job growth continuing to outpace the national rate, while the state unemployment rate of 4.2 percent remains above the national rate of 3.8 percent.
The new revenue numbers do not reflect changes Gov. Steve Sisolak included in his proposed 2019-21 biennium budget. Sisolak, a Democrat, wants to raise an additional $140 million from postponing planned reductions in the modified business tax and governmental services tax. Both were slated for reduction or phase out starting with the 2020 fiscal year that begins in July. His proposed budget includes outlays for new or enhanced social welfare programs as well as proposed raises for state and school system employees.
The governor’s budget assumptions have been called into question in a report by the Guinn Center, a non-partisan research group, which determined that the state would need an additional $107.5 million to fund the governor’s education initiatives.
Sisolak Wednesday called the forum’s action “positive” and said he remained committed to his budget initiatives for educators and “working families.” In a statement, he said he and the Legislature would work to “build a structure upon which we can transform the way we fund our schools in the years ahead.”
Assembly Republicans, also responding to the forum, said the adopted increase in projected revenue was “a small drop in the bucket” and not enough to cover all the additional spending Democrats are seeking. A bill introduced Wednesday by Senate Republicans seeks to protect the state’s rainy day fund from being raided to balance the budget.
“In its simplest terms, the governor and the Democrats are trying to spend more money than is available,” Assembly Minority Ledaer Jim Wheeler, R-Minden, said in a statement. “How will Democrats keep their promise to teachers and unions while still balancing the state budget?”
The forum’s action Wednesday builds on the forecast it approved in December — a 7.2 percent, $591 million jump over the previous two-year cycle. Anticipated revenue for the 2019-21 biennium is up another $11.4 million, with the total now projected at approximately $8.847 billion, from $8.835 billion in December.
The rest of the $42.8 million increase comes from $31.4 million in additional revenue now projected for the current fiscal year.
The state general fund represents about 30 percent of the total state budget. Sales tax is its largest revenue component. The forecast adopted by the forum Wednesday sees sales tax increasing by $24 million through mid-2021, with annual increases declining from 7.8 percent in the current fiscal year to 3.1 percent in two years as a decade-long economic expansion finally begins to slow.
The biggest revenue decline appears in new projections for real estate transfer tax collections. The new figure is $21 million less through mid-2021 — about a 6 percent drop — reflecting a slowing sales market driven by higher housing prices and slower migration into the state.