Gov. Brian Sandoval says he'll ask Nevada agencies to scale back their budget requests after the state's Economic Forum predicted less tax revenue than many had hoped for.
State agencies had requested $7.7 billion over the next two years, but the panel that makes the state's official revenue prediction estimated Wednesday that the state would only bring in $6.3 billion.
Continue Reading Below
"Today's Economic Forum report reminds us yet again that our revenue structure is not built to meet the demands of our changing economy nor our continued increase in statewide population," Sandoval said in a statement.
Wednesday's prediction is a drop from the $6.7 billion budget the Legislature approved for the current two-year period. That's because the forum's estimate doesn't include revenue from a set of temporary taxes that expire June 30, according to the Las Vegas Review-Journal.
Those "sunset taxes" have been extended beyond their deadlines in the past.
The Economic Forum, a group of five people chosen by the governor and legislative leaders, analyzes forecasts and decides which to use as the official projection of Nevada's upcoming revenue. Forecasts take into account worldwide economic factors, such as the European economy and the Affordable Care Act, as well as trends closer to home, such as the changing gambling habits of tourists.
Analysts predict Nevada gambling revenues will dip in 2015, but will be up 2 to 5 percent over the next few years.
The growth rates aren't stellar, according to legislative fiscal analyst Russell Guindon.
"But if you go back and look historically, this is growth," he said, according to the Las Vegas Sun.
Revenue from the live entertainment tax is expected to decline 15 percent in 2015 but rise 7 percent in the two years after. Sales tax revenue, meanwhile, is expected to rise about 5 percent annually over the next three years.
Sandoval's criticism of the tax structure comes after major Nevada business groups have expressed support for changes. But voters a month ago also overwhelmingly rejected a ballot measure that would have raised taxes on businesses to fund education, and they voted down a measure that would allow lawmakers the option of raising taxes on the mining industry.