An economic boom over the past quarter has produced enough revenue to boost state taxes slightly over projections made by the Nevada Legislature in May 2003, lawmakers have been told.
Through March, Nevada's state treasury had taken in $1.46 billion in taxes, a 24.3 percent increase over the same period last year.
In approving the state budget, the Legislature last year projected taxes for the fiscal year ending June 30 would increase by 23.7 percent over the previous year.
"All I can say is, so far hot diggity," state budget chief Perry Comeaux said Wednesday. "But it is too early to get excited. If there is another terrorist attack, our revenue will go into the crapper."
He noted the Legislature spent all but $1 million of the $136 million rainy day fund to balance last year's budget. If the economy turns down, he said, there is no financial cushion to fund state services.
The 23.7 percent revenue estimate was based on assumed revenue from new payroll and real estate taxes and increases in the tax rate on cigarettes, liquor and casino winnings. A record $833 million rate increase over two years was approved last July.
State Tax Director Chuck Chinnock told the Legislature's Committee on Taxation, Public Revenue and Tax Policy that revenue from the sales tax alone will exceed projections by $50 million.
He also expects real estate transfer tax revenue will exceed projections by 50 percent, or about $25 million.
Gaming Control Board spokesman Frank Streshley added casinos' winnings in March reached a record $930 million. That was driven in part by a 6.4 percent increase in visitor levels to Las Vegas, according to Streshley. Passengers arriving at McCarran International Airport climbed to 3.6 million, a 16.1 percent increase.
Streshley expects big gambling wins to continue at least until the summer months, when high gasoline prices might cut some tourism. He added the weak dollar has caused a boom in tourists from foreign counties.
But the optimism at the meeting was tempered by reports that the new live entertainment tax on nongambling businesses is producing about $4 million a month less than projected.
Chinnock said legislators projected the tax would be collected at 500 businesses. In March, just 23 businesses paid the tax.