Analyst’s program helps planners with projections

Friday, Oct. 25, 2002 | 5:04 a.m.

WEEKEND EDITION: Oct. 27, 2002

With a few keystrokes on a laptop computer, economic analyst Jeremy Aguero can find projections on Nevada's 2004 prison population, the funding needed in 2007 for welfare programs or the percentage of casino revenues in 2009 from food and beverages.

Aguero and his Las Vegas company, Applied Analysis, have developed an elaborate computer program designed to help the governor and state budget planners make more educated projections about the caseloads for state programs and the money needed to fund them.

The advantages of the program, which he developed as an adviser to the Governor's Task Force on Tax Policy in Nevada, are that it is easy to use and can provide detailed data in seconds that otherwise could take hours if one had only paper files and a calculator. And if the user wants the information presented in a bar chart or pie chart, that can be done, too.

Mike Hillerby, Gov. Kenny Guinn's deputy chief of staff, said the governor thinks highly of the new program.

"He was surprised by what it could do," Hillerby said. "The governor thinks it could be beneficial to the budget process."

Aguero constructed the program by compiling caseload and budget numbers for each state program from at least 1990 to develop a historical basis for projections that run through at least 2010. He also relied on data provided by the 2000 Census and the federal Bureau of Labor Statistics.

The state already makes long-term budget projections but they aren't nearly as detailed as those emanating from Aguero's laptop.

The program assumes that inflation will be 2.6 percent annually through 2010, and that Nevada's population growth will have decreased from 4.5 percent annually in the late 1990s to 1.5 percent eight years from now. "Over a 10-year period there will be spikes and valleys," he said. "For instance, we expect labor growth, which is now at 2 percent, to go back up to 3.6 percent in 2003 and 2004 and then go back to 2 percent by 2010."

The reason for that particular spike is an anticipated increase in jobs caused by such new developments as Steve Wynn's proposed $2.5 billion Le Reve resort on the Strip.

But if inflation or growth projections change, Aguero said the new figures can be fed into the computer program to change the revenue and caseload data accordingly.

"I can change the projections for 2006 and it will change everything from the number of kids who will be in school to the number of people depending on welfare services," Aguero said.

There is information on roughly 800 line items. For instance, he can predict that Nevada's visitor count, a projected 48.4 million this year, should reach 56.3 million by 2010.

To test the accuracy of his model, Aguero's program calculated that Nevada should have raised $1.747 billion last year. The actual revenue collections, $1.751 billion, were a mere $4 million above his projection, or two-tenths of 1 percent.

State economist Bill Anderson said the computer program will be a helpful tool for the state Budget Division.

"It'll be a supplemental factor as we put together our budgets for the future," Anderson said. "What it will be is another piece of input that we will take into account when we put together our own forecasts."