Nevada’s budget getting a bigger boost amid ‘booming’ economy
CARSON CITY — Nevada is expected to have even more cash on hand in the upcoming biennium than the state’s economic experts predicted late last year despite concerns about high inflation that’s pinching pocketbooks nationwide.
The Nevada Economic Forum approved a projected budget of $11.6 billion for fiscal years 2024 and 2025, a more than $200 million increase from what the group predicted in December. The revised forecast, approved by the forum Monday, will be used by lawmakers as they work to finalize the state’s budget for the next two years.
Monday’s report is a more accurate forecast on the state’s economic future than the one the forum approved in December, which predicted that the state would have $11.4 billion in revenue. That preliminary figure was used by Gov. Joe Lombardo’s office to write his executive budget, the largest two-year general fund budgets in state history.
In response to the forum’s projection, the governor’s office said it would submit amendments to his executive budget to be considered by the Nevada Legislature, which must approve a budget before sending it back to the governor for final approval.
“Governor Lombardo remains committed to fiscal responsibility and not overspending,” Lombardo Chief of Staff Ben Kieckhefer said in a statement. “Significant portions of the new revenue forecasted today are one-time funds, and our office believes that they should be treated as such.”
Proposed amendments from the governor’s office are set to include $25 million for state office building renovations, an additional $6 million for provisions in the governor’s administration bill and an additional $3.3 million to fund the Office of School Choice, a measure contained within the governor’s sweeping education bill. The governor’s office also said it would propose amendments increasing unlisted amounts for charter school transportation and “critical social services infrastructure.”
Members of the forum also heard from Moody’s Analytics senior economist Emily Mandel, who said inflation, despite remaining high, has started to ease.
“Nevada, specifically, the economy here is just booming,” Mandel said. “Growth is very broad-based across industries. Unemployment remains stable and fairly low, at 5.5 percent.”
And the state is outperforming the rest of the country. According to Mendel, Nevada’s resiliency can be attributed to population growth and the state’s mix of industries, especially its robust tech sector.
But housing prices have increased more here than in most states, Mandel said.
The state has the country’s highest unemployment rate, a figure that can be attributed to the number of people entering the workforce rather than people losing jobs, said Nevada Department of Employment, Training and Rehabilitation Chief Economist David Schmidt.
Nearly all job categories are expected to grow between 2023-2026, with a leisure and hospitality a notable outlier. Those jobs are projected to stay flat because of instability, according to Schmidt.
“There’s been so much volatility in that sector,” Schmidt said. “(For casinos), I think that we will continue to see some growth but it might be the 90 percent recovered level instead of 100 percent. I do expect some shift. Exactly how much is really hard to say.”
Assembly Speaker Steve Yeager, D-Las Vegas, said the positive forecast reflects a “successful economic agenda of Legislative Democrats.”
“This additional revenue should be used to boost funding for critical public services such as education, affordable housing, mental health, public safety, and more,” Yeager said in a statement. “Assembly Democrats will continue to invest our state’s record revenue in programs that improve the lives of Nevada families because Nevada is stronger when Nevada families are prioritized.”
Senate Majority Leader Nicole Cannizzaro said the projection is an indicator that the state is in a position to address many “long-time unmet needs.”
“As we begin the final work on our biennial budget, we have the opportunity to make unprecedented investments in health care, housing, public education, and improving the quality of core services the state provides to Nevadans. That’s the work Senate Democrats will focus on in the weeks to come,” Cannizzaro said in a statement.
In a statement, Senate Minority Leader Heidi Seevers Gansert, R-Reno, said she was looking forward to “working together to responsibly budget for the next biennium.”
Assembly Minority Floor Leader Philip P.K. O’Neill, R-Carson City, embraced the positive forecast.
“I’m excited to see that the Economic Forum has come back with such a positive outlook for the upcoming biennium,” O’Neill said in a statement. “I’d like to hear more details on what could be done with that additional revenue in a beneficial and sustainable manner.”
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Contact Taylor R. Avery at TAvery@reviewjournal.com. Follow @travery98 on Twitter.
