Panel works on state’s expected revenues

Brendan Riley

Wednesday, Nov. 1, 2000 | 12:38 p.m.

CARSON CITY - Nevada's Economic Forum, trying to figure out how much money the state can spend in the coming two-year budget cycle, was warned Tuesday about potential problems from Indian and Internet gambling.

Members of the forum, whose estimates on state income must be followed by lawmakers when they adopt a budget next year, also came up with tentative estimates of about $3.73 billion in gambling, sales and other taxes.

Forum Chairman Leo Seevers said the rough estimates for the two-year budget cycle that will start next July are "guidance numbers" that'll be subject to change later on.

The panel based its estimates on reports from economists and budget experts for Gov. Kenny Guinn's administration, the Legislature, various state agencies and an outside economist. It will meet Nov. 30 to go over the numbers again.

Forum members based their $3.73 billion "guidance" figure on assumed sales tax growth of about 6 percent and casino tax growth between 4 and 5 percent in the coming budget cycle.

Casino-related taxes along with sales taxes account for three-quarters of all revenues needed to run state government.

The growth estimates came from the state Budget Office, the Legislative Counsel Bureau, Gaming Control Board, state Taxation Department and WEFA Inc., a forecasting company used by the state and LCB.

While no slumps in main revenue sources were seen, Jim Diffley of WEFA said there are some uncertain risks from Indian gambling in neighboring California and from possible Internet gambling activity.

Diffley said Indian gambling is a bigger concern for northern Nevada than for the Las Vegas area in southern Nevada.

Frank Streshley of the Gaming Control Board added there could be some 50,000 new slot machines in Indian casinos within a year or so. He also said there are plans for Indian resorts on both Interstate 80, leading to Reno, and on U.S. 50, leading to Tahoe's south shore.

Mike Clark of the Department of Employment, Training and Rehabilitation said that despite the potential for more competition from outside Nevada, another wave of casino construction in the Las Vegas area is about to start.

Clark and others mentioned the likelihood of projects by Steve Wynn at the old Desert Inn, by Mandalay Bay operators and others in the near future.

Economic Forum member Steve Greathouse asked about the impact of national elections on the economy, and Diffley said his bet is a short-term gain if Democrat Al Gore is elected president and a long-term gain if Republican George W. Bush wins.

But Diffley added any economic improvements stemming from the election outcome are contingent on either candidate being able to complete the difficult job of fulfilling campaign promises.

In a budget briefing in July, Guinn had predicted tax revenue would grow overall by about 6 percent a year, providing $3.7 billion in spending in the next two-year budget.

Of the $3.7 billion in revenue projected by Guinn, about $3.25 billion would fund existing operations of state government. About $395 million will be needed to fund increases in public school enrollments, Medicaid recipients and prison inmate growth.

The remaining $60 million, in addition to $30 million expected to be saved from current state government operations through the fundamental budget review process, would be directed to salary and benefits for state employees in Guinn's preliminary plan.

Guinn has also projected a surplus of $150 million from the current two-year budget.