Gibbons Administration Frets About Nevada Tax Revenues

Concerned about slumping tax revenues, Nevada Gov. Jim Gibbons has asked state agency chiefs to develop plans for 5 percent spending cuts.

State Budget Director Andrew Clinger said Monday that over the next several weeks he will try to develop new projections of the revenues that support Nevada's $7 billion, two-year budget to see whether the agency cuts will be needed to offset revenue shortfalls.

"We still have a lot of work to do before we know what's going to be required," Clinger said, adding, "We wanted to get out ahead of this so that once we do have a (shortfall) number we can act."

Clinger said that if cuts are ordered, the money that agencies aren't allowed to spend could be held in reserve in the event of an economic turnaround.

If that occurred, the agencies would be authorized to resume spending at levels approved by the 2007 Legislature.

He also said that the cuts, if needed in this fiscal year and the following fiscal year, would affect programs and not salaries of state employees.

The current state budget assumes revenue growth of 5 percent during the current fiscal year and 6.8 percent during the next fiscal year.

The state Economic Forum figured on those growth rates in developing revenue estimates followed by lawmakers in approving the budget.

But a report last week from the state Gaming Control Board showed a 4.4 percent statewide decline in casino winnings in August - the first decline in five months as all but a few of the major markets tracked by the board showed lower winnings compared with the same month a year earlier.

There was a decrease of 13.2 percent in percentage fee collections from resorts, which left the state 7.6 percent, or about $15 million, below its earlier projections for casino revenues.

The collections now total $182.8 million.

The casino report followed another report that showed Nevada merchants sold nearly $4 billion in goods during July for a 2.6 percent decline compared with the same month a year earlier.

Sales taxes that go to the state, local governments and schools totaled $294.9 million based on the July sales, down 2.3 percent.

The state's share was $78.6 million - and that's $10 million less than what the Economic Forum had projected last spring.

The two taxes are the biggest revenue sources for the state budget.