State gets more bad money news

Wednesday, March 13, 2002 | 10:58 a.m.

CARSON CITY -- The state earned $21.5 million from its general investment portfolio last year, nearly $10 million less than in 2000.

State Treasurer Brian Krolicki informed the state Board of Finance Tuesday that the state in December 2000 earned 6.05 percent on its investments, but that fell to 3.16 percent in December 2001.

Krolicki's report adds to the bad news already hitting state government.

Gov. Kenny Guinn, chairman of the finance board, estimated the state is down $30 million in expected revenues, not counting the return on investments report. "And we are not catching up as fast as we would like to," said Guinn, noting recent collections from sales and casino taxes are lagging what was predicted by the state Economic Forum.

Tax collections from the casinos for the first seven months of the fiscal year totaled $295.8 million, down 3.3 percent from the prior year. The amount is more than 6 percent lower than predicted by the Economic Forum. Receipts from the sales tax for the first six months of this fiscal year hit $324.4 million, up 3 percent. But the Economic Forum forecast a 6 percent increase in sales tax collections.

The governor said the state had been down an estimated $57 million. But he expects a $10 million saving from the state's hiring freeze; $9 million from a transfer from the state Department of Motor Vehicles and extra money from a higher than expected ending fund balance from the last fiscal year that ended June 30.

Krolicki also said there may be "several million" dollars less than predicted in this fiscal year from the state's investments. "There is not much we can do," he said.

The interest rate was cut by the Federal Reserve Board last year in an effort to keep the economy from falling into a further slump.

The treasurer said, however, the general portfolio outperformed the one-year Constant Maturity Treasury Index by 98 basis points.

As of Dec. 31, 2001, the state had $1 billion invested in such things as U.S. treasury and agency securities, commercial paper and negotiable certificates of deposit.

Krolicki said the local government investment pool also took a hit last year. It earned $9 million in interest, down from $13.2 million the previous calendar year. More than 75 cities, counties, school districts and special districts invest their money through the treasurer's office in this pool.

Krolicki had one piece of good news for Guinn. He said he may be able to transfer $5 million to $7 million of unused money in the bond repayment fund. He said receipts from the 15-cent property tax, used to pay off bonds, have come in faster than expected.