Guinn’s $100 million surplus falls short

Friday, Dec. 1, 2000 | 11:02 a.m.

CARSON CITY -- Gov. Kenny Guinn will have slightly more than $100 million in extra money during the next two years to make improvements in state government.

But that's not enough to whet the appetite of groups already lined up with their demands.

Bob Gagnier, executive director of the State of Nevada Employees Association, says his group needs $100 million to adequately address the lagging salaries of state workers. And even that $100 million would not address all the deficiencies pointed out in a recent study of state pay.

Al Bellister of the Nevada State Education Association said the 1999 Legislature didn't give the schoolteachers any pay increase. He said it will take $126 million for cost-of-living increases for teachers over the next two years. And that doesn't make up for the lost ground in the past two years.

It requires about $23 million a year in state money to give a 1 percent raise to schoolteachers, university faculty and state workers.

The Economic Forum, a group of laymen, Thursday estimated the state will collect $3.743 billion in taxes during the next two fiscal years, which is 17.2 percent above the current biennial budget approved in 1999.

Guinn has said he needs $3.641 billion to finance current services and to take care of the growth in schools, prisons and Medicaid. That, according to estimates, will leave him $102.3 million.

The governor is bound by law to build his upcoming budget on the forecast of the Economic Forum. The forum, however, will meet April 30 to update its predictions, and there could be higher revenue collections forecast then.

Guinn's press secretary, Jack Finn, said, "Now that we have the Economic Forum's numbers, we will go back to revise our numbers and that is minor."

Finn said the governor will meet with leaders of the Legislature and discuss priorities in the budget. He said the governor's spending plans won't be revealed until the State of the State message on Jan. 22.

The forum took the middle ground in its prediction of $3.743 billion. The state Budget Office estimated the revenues would be $3.763 million while the Legislative Fiscal Analyst Office predicted $3.724.

Nevada's economy, according to the forum, will continue to grow but not at the rapid pace as in the past.

The receipts from the sales tax and the casino tax account for 70 percent of the state's revenue.

Steve Greathouse, a forum member and a vice president for Mandalay Resorts, said the gambling business "is extremely strong."

Indian gambling in California is "clearly an issue," Greathouse said. But he said Las Vegas has "diversified its customer base." California still is "the best feeder market" for tourists to Nevada, he said. "But it's a decreasing part of the mix."

The international market, he said, is growing in importance.

Gaming taxes this fiscal year are expected to increase by 6.6 percent to $631.7 million. But the growth will drop to 3.9 percent in fiscal year 2002 and 3.5 percent in the following year, according to the estimates of the forum, headed by Cary Fisher of Las Vegas.

There are no megaresorts now being built that will open in the near future.

Sales and use tax collections are expected to reach $646.2 million this year and will grow by 6 percent next fiscal year and 5.5 percent the following year, the forum estimates.

There will also be an estimated surplus of about $200 million of tax collections that came in higher than expected during this biennium. This cash is traditionally used for one-shot items, such as building construction or equipment.

Gagnier said he wants $18 million of the surplus to pay for "retention bonuses" for state workers who have 10 years of service or more.