Beer and cigarette use drops, liquor and smokeless tobacco up

By Cy Ryan

Wednesday, Nov. 24, 2010 | 5:10 p.m.

CARSON CITY – Nevadans and tourists are drinking less beer but are continuing to gulp down hard liquor, wine and cordials.

And cigarette smoking is declining in the state but there’s an increase in the use of cigars and smokeless tobacco.

Those are the findings of financial experts in predicting part of the state's tax collections in the next two years.

The Technical Advisory Committee made its forecast Wednesday of smaller taxes to be collected in the next two fiscal years. The Economic Forum meets next month to predict how much the state will receive from major revenue sources, such as the sales and use tax and gaming.

The governor and the Legislature cannot build a budget higher than the forecasts unless they agree to raise taxes.

Financial experts from the budget office, Legislature and state agencies forecast the state will receive $775.2 million this fiscal year from these smaller revenue sources, but that will drop to $509.5 million next fiscal year, then grow to $573.2 million in the 2013 fiscal year.

The Legislature increased taxes on mining and insurance, but those increases are due to expire this fiscal year, so the advisory committee couldn't build its estimates on any possible extensions of those taxes.

The committee is predicting liquor tax proceeds will increase by 1.1 percent next fiscal year and 1.2 percent in fiscal year 2013.

Russell Guindon, senior deputy fiscal analyst for the Legislature, said there’s been a “drastic decline” in the number of gallons of beer sold in Nevada, but there’s been a steady growth in the tax on cordials, wine and hard liquor. He’s quick to admit he doesn’t know the reason behind the change, but the committee is basing its estimates on that trend.

The experts predict the tax collection from cigarettes is dropping by 2.8 percent this fiscal year, then will drop by 2 percent next fiscal year and 1.8 percent in fiscal 2013. That’s following a national trend of a decline in those who smoke.

But the sale of “other smokeless products” is forecast to rise 0.9 percent next year and 2.2 percent in the following year. People appear to be smoking more cigars, using additional smokeless tobacco or rolling their own cigarettes, Guindon said.

And both the marriage and divorce businesses are predicted to continue in a downward trend. The committee is forecasting the revenue from marriage licenses will drop 2.7 percent in each of the coming two fiscal years.

Taxes collected from divorce fees will be off 0.7 percent in both fiscal 2012 and 2013.

Revenue from marriage and divorce may be dropping because of a decline in population. The state Department of Employment, Training and Rehabilitation said earlier this week that a number of workers are leaving Nevada because they can't find jobs.