State’s cash shortfall not as bad as expected

Monday, Dec. 24, 2001 | 9:54 a.m.

CARSON CITY -- Despite lagging tax collections, the state's finances are in better shape than expected -- better than larger states that are running in the red, Gov. Kenny Guinn says.

Nevada faces a deficit of only $7 million, Guinn said.

The $7 million deficit represents about 4 percent of the $1.8 billion budget this fiscal year.

"We can hiccup and spend more than that," Budget Director Perry Comeaux quipped Friday.

The latest figures on sales and gaming tax receipts -- October numbers released last week -- show the state is $34 million below predicted revenues. Casino and sales taxes make up more than 75 percent of the budget.

Comeaux said Nevada started the fiscal year in July with $20 million more than expected.

A statewide hiring freeze implemented in September has saved another $6 million, he said. Except in special cases, vacant positions are not being filled, and many of the new jobs created by the 2001 Legislature are remaining vacant for the time being.

It will be a few more months before budget experts can tell if the state is recovering after the Sept. 11 terrorist attack, Comeaux said.

Budget analysts will particularly be interested in December to see if the Christmas shopping season lived up to expectations. But those figures won't be ready until mid-February.

Meanwhile the state Division of Employment Security reported 41,750 people were drawing benefits as of Dec. 15. That's an 85 percent increase over a year ago. Division Director Birgit Baker said the trust fund that is tapped to pay unemployment is not in any trouble of going dry.

The fund, financed by premiums paid by employers, held $520 million as of last Sept. 30. Baker estimated it would fall $25 million because of the higher jobless rate, but she said there should still be $495 million in the fund next Sept. 30.

That's well above the $368 million needed in the fund for it to be considered solvent.

The state Welfare Division reported last week that the number of recipients jumped by 10.6 percent in November to 26,378. That's the highest number on public assistance in more than two years. But the division has a reserve fund of more than $20 million in federal money that it can use to continue payments.

The state also has delayed spending $66 million that was set aside by the Legislature for one-time expenses,such as equipment purchases, Comeaux said.

Some of that money will be released eventually, he said.

There is no intention of cutting into the pay raises given state workers, Guinn said, or into the allocations given school districts, despite rumors to the contrary.

The state is holding off on purchasing new vehicles for agencies, at a temporary savings of $1.3 million. The budget allocated $205,000 to the state Buildings and Grounds Division to help move agencies to new quarters, an expenditure that also is being delayed.

"We're slowing down the moving until we get a better handle" on whether revenue will recover, Comeaux said.

Another $25 million to $26 million was set aside to help pay higher utility costs for public schools; supplement health insurance premiums for school personnel; and to make sure no important courses were curtailed in the school districts.

Comeaux said it would be up to the Legislative Interim Finance Committee, which meets Feb. 5, to decide if it wants to save some of that money to help the state during tight times.

Among other delayed expenditures: