Nevada Agencies Face Deadline for Budget Cut Plans

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As various government agencies faced a Monday deadline for submitting 5 percent budget cut plans, state Budget Director Andrew Clinger cautioned against a "panic mode" and said he'll discuss the cuts with state lawmakers Nov. 14.

Concerned about slumping tax revenues, Gov. Jim Gibbons asked for the plans two weeks ago. He excluded public safety agencies, prisons and the K-12 school system, but included the state's universities and colleges - whose chancellor rejected the request.

Besides the resistance from Chancellor Jim Rogers, the Clark County Family Services Department also declined to go along with the request. And key state lawmakers said the governor should confer with them before imposing any reductions.

"People are kind of in a panic mode about this, and it's really more about trying to get out in front of this so that we don't have to be scrambling at the end," Clinger said. "We want to plan for the worst and hope for the best."

"This doesn't mean we're necessarily going to be cutting 5 percent from every agency," Clinger said. "But we're beginning the planning process."

Clinger also said he will discuss the planning effort with lawmakers at their Interim Finance Committee meeting on Nov. 14. The cuts, if required, would strip about $184 million from a nearly $7 billion state budget.

Gambling and sales tax revenues so far this fiscal year are off nearly $35 million from what was projected when the state's two-year budget was approved in June. The two taxes made up 60 percent of the revenue going into the state's nearly $7 billion budget.

Clinger said there's no data yet on first-quarter collections of other important tax revenues, including business, real property transfer and insurance premium taxes. Those reports should be available in a few weeks.

As for the gambling and sales taxes, Clinger said this fiscal year's collections aren't the only problem. He said sales taxes in particular have declined for several months, and overall tax collections for the fiscal year that ended June 30 were down slightly.

Revenue improvements are anticipated as new Las Vegas megaresort
projects are completed over the next several years, but Clinger said, "That helps us in the long term. It's not going to help us in the short term."

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

But a recent report from the state Gaming Control Board showed a
decrease of 13.2 percent in August percentage fee collections from
casinos, which left the state 7.6 percent below its earlier projections for casino revenues.

The casino report followed another report that showed that taxes based on August sales paid to the state, local governments and schools were down 2.3 percent. The two taxes are the biggest revenue sources for the state budget.

(Copyright 2007 by The Associated Press. All Rights Reserved.)