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September 20, 2014

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Modest economic recovery predicted for next two years in Nevada

Nevada government financial experts are forecasting modest growth in Nevada's economy in the next two fiscal years.

Scores of pages of tax collections, employment estimates and population forecasts were presented Friday to the Economic Forum, whose job is to predict how much money the state will have to spend in the coming biennium.

At the close of the six-hour meeting Friday, forum Chairman Ken Wiles said he was "cautiously optimistic" about the state's recovery. He said the forum must pay attention to what's happening in the deadlock in Congress on the budget and spending.

There were some disagreements among the experts on how much will be collected on some of the taxes.

On the insurance premium tax, Sumiko Maser, deputy executive director of the state Department of Taxation, said collections would fall by 1.8 percent in each of the coming two fiscal years.

But Janet Rogers, deputy state budget director, said the federal affordable care act would result in more people buying insurance. She predicted the tax would grow 4.5 percent next fiscal year and 5.7 percent. The Legislative Counsel Bureau is predicting a 2.8 percent increase in fiscal 2014 and 3.1 percent the following year.

Even with the forecasts of recovery, the total revenues collected by the state will drop in the coming biennium because many of the tax increases enacted in 2011 will expire this year unless extended by the Legislature.

For instance, Russell Guindon, deputy fiscal analyst for the Legislature, predicts the state will collect $2.7 billion in taxes next year, down 10.1 percent from the current year due to the sunset of the 2011 tax increases.

According to Michael Lawton, senior research analyst for the state Gaming Control Board, there will be a 3.3 percent gain in collections from the casinos next fiscal year. The budget division forecasts a 2 percent increase and the legislative staff is forecasting a 4.1 percent jump.

The Economic Forum has set Nov. 30 for the next meeting to decide on its projections, which Gov. Brian Sandoval uses to help determine his budget for presentation to the Legislature.

The governor has already said he favors continuing the taxes increased in 2011.

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  1. Sounds like an excuse manufactured to NOT DO ANYTHING about excessive employee compensation at all levels of government. And before the Legislature thinks about endorsing the sanctuary state, they need to consider the impact on social welfare programs.