Merchants report nearly $2.1 billion in February sales

Brendan Riley

Wednesday, April 21, 1999 | 9:29 a.m.

CARSON CITY - Nevada merchants had another good month- nearly $2.1 billion in February sales - and that in turn produced a 14.3 percent gain in sales tax collections compared with the same month in 1998.

The sales and revenue report Tuesday from the state Taxation Department follows a recent report that showed the state's cut of the money won by casinos in February was down slightly.

Combined, sales and gambling tax revenues account for two-thirds of the money needed to run state government.

The 14.3 percent sales tax increase brings the growth in the state's share of sales taxes for the fiscal year to date to a healthy 9.5 percent.

The average is higher than the 6.9 percent growth projected for the entire fiscal year by the state Economic Forum. The forum's dismal forecast last fall prompted Gov. Kenny Guinn to call for numerous budget cuts.

The forum will meet again late next week to revise its predictions based on the latest data on collections of sales, casino and other taxes.

A breakdown of the latest sales report shows the Las Vegas area was up 15.4 percent and Reno-area sales were up 6.5 percent.

Statewide, auto sales were up 13.6 percent; general merchandise sales were up 15.9 percent; clothing store sales were up 5 percent; and building supply sales were up 13.6 percent.

A tourism-related category, eating and drinking places, was up 13.2 percent statewide. A breakdown shows a 15.9 percent gain in the Las Vegas area and a 3.6 percent increase in the Reno area.

The state's share of sales taxes during February totaled $43 million.

Guinn chief of staff Pete Ernaut has said even though sales taxes are coming in at stronger levels than expected, the gains may not be enough to make more than a modest upward change in the Economic Forum's gloomy November revenue estimate.

There were hopes a predicted $140 million tax shortfall for the fiscal year could drop by up to $40 million. But Ernaut says a $33.5 million drop is more likely.

And based on this fiscal year's activity, revenue for the coming two fiscal years may be only $25 million more than initial projections made a few months ago, he said.

If the administration estimates hold up, Ernaut adds there will be enough money to restore cuts in some education and social service programs this fiscal year.

And some of the extra funding in the coming two-year budget cycle could go for benefit improvements for state workers. That's a top priority for Guinn.