For the first time since May 2007, general fund revenues are ahead of projections.
Director of Administration Andrew Clinger said Friday that as of the May reports to his office by the Gaming Control Board and Department of Taxation, "we are $36.6 million ahead of forecasts for Fiscal Year 2010."
The biggest contributors are sales and modified business tax collections. Sales tax collections to the state, Clinger said, are $17.3 million ahead of the Economic Forum forecasts made for February's special legislative session. The modified business tax collections for the first two quarters of this fiscal year are ahead by $13.2 million.
But Clinger said it's too early to begin celebrating.
"I would be hesitant to call it an economic recovery for us at this point," he said. "I think it's more that, if you lower the forecast enough, eventually you beat it."
But Clinger said there are hopeful signs in the latest numbers.
"The rate of decline on major revenues is getting smaller," he said. "I really believe sales tax collections from January this year will end up marking the bottom."
He said January collections of $220 million represented a drop of almost 47 percent from the peak collections in December 2005.
Gaming tax collections, he said, are still a bit below projections - $3.3 million as of March, the most recent month available. But the gaming "drop," the amount wagered by players, is climbing back up.
"While still in negative territory on a year-to-year basis, those negatives are getting smaller," he said.
Gaming Control Board Analyst Frank Streshley said resort operators have been telling him the "high-end play is coming back, conventions are getting stronger, bookings are getting stronger." He said he believes gaming is "sort of bouncing along the bottom" of the recession and will begin to recover.
Most of the other major revenue sources feeding Nevada's general fund are also ahead of projections. The Insurance Premium Tax is $5.5 million up, Real Property Transfer revenues $2.5 million ahead and gaming's Live Entertainment Tax collections $2.4 million above what the forum expected. Revenue from commercial recordings is up $1.2 million and Liquor Tax collections $300,000.
The Cigarette Tax and Lodging Tax, however, are down a total of $2.5 million.
When everything is added together, the general fund has $36.6 million more than expected at this point. As of May 14, the general fund had raked in $1.65 billion this fiscal year.
The adjusted budget approved by lawmakers and Gov. Jim Gibbons in February projected the state would have an ending fund balance of $226.8 million at the close of the fiscal year June 30. That is $74.5 million higher than the statutory minimum the state must keep to ensure its checks don't bounce.
If the revenue collections continue coming in above projections, Clinger said they will increase that pad and reduce the amount the state must borrow from the Local Government Investment Pool to balance the budget. The current budget includes a provision allowing the state to borrow up to $140 million from that fund if necessary, but both the administration and lawmakers want to reduce or eliminate the necessity of taking that loan.
Lawmakers met in February to cut the budget after an extremely pessimistic and conservative Economic Forum in January reduced revenue projections $580 million. In addition, the law requiring the state to cover any shortfalls in sales taxes supporting K-12 education added another $238 million to the gap between revenue and the original budget, bringing the total lawmakers and the governor had to cut to $818 million.
