CARSON CITY, Nev. (AP) -- A panel of financial experts on Wednesday projected Nevada revenues for the upcoming budget cycle at $5.3 billion, representing a $1.1 billion decrease, or 17 percent, from existing spending levels.
The five members of the Economic Forum took a cautious approach to predicting how much money the general fund will receive in sales, casino, business and other taxes and fees as the state tries to claw its way out of the Great Recession.
Republican Gov.-elect Brian Sandoval has said he won't raise taxes and will allow temporary tax hikes imposed two years ago to expire. He reiterated his stance after the forum made its projections, saying state government will need to close the gap with reductions.
"While the decisions which lie ahead will be trying, we must commit ourselves to them," Sandoval said in a statement. "Nevada families and businesses are suffering, and our budget cannot worsen the problem. State spending cannot get in the way of economic growth by imposing new taxes."
State agencies have submitted budget requests totaling $8.3 billion, an amount they say is needed to maintain services and abolish state worker furloughs.
The spending limit set by the Economic Forum is binding on the governor and state lawmakers who convene in February as they build a budget for the two years beginning July 1. Anything over forum projections must be tied to a tax increase or some other funding source.
The forum will meet again on May 2 to adjust their projections as the 2011 legislative session winds down.
Nevada's economy, highly dependent on the discretionary spending of tourists and gamblers, has been hammered by the recession. When those sectors plummeted, it crushed a once robust construction industry that had carried the state in previous downturns.
Nevada leads the nation in foreclosures and bankruptcies, and has had the highest unemployment rate in the nation since May. The jobless rate hit a record high 14.4 percent in September, and improved slightly to 14.2 percent in October.
But economists attributed October's dip more to workers leaving the state rather than meaningful job creation. About 70,000 people have left Nevada in the past year, according to the state demographer.
Bill Anderson, chief economist for the Nevada Department of Employment, Training and Rehabilitation, told forum members that while the jobless rate may have stabilized, there's "no catalyst that will put on a more pronounced growth projectory" soon.
Sales and casino taxes account for two-thirds of general fund revenues. Although steep, double-digit declines of the past two years have eased -- and in some months risen slightly from rock-bottom lows -- forum members were unwilling to project a sustainable upward trend.
John Restrepo, forum chairman and principal of Restrepo Consulting Group in Las Vegas, said the recession has spurred "changes in consumer behavior and spending patterns."
"This is our Great Depression," he said. "This could be a game-changer for a while."
Andrew Martin, a Las Vegas certified public accountant, said Nevada's foreclosure crisis is far from over and that thousands of people are leaving the state.
"I don't think people are going out there and spending, and I don't think they're going to," he said. "I think this is where we're most vulnerable," he said of sales tax projections.
The panel took the most conservative sales tax estimates, projecting revenue will increase 1.3 percent increase in 2012 to $767.4 million, and 3 percent in 2013 to $791.8 million.
Casino revenues were projected to rise 3.2 percent next year to $679.5 million, and 3.3 percent in 2013 to $702.1 million.
Forum members scoffed at a casino revenue forecast from Moody's Analytics, which estimated growth at 7.2 percent and 12.3 percent in each of the next two years.
Panel member Matthew Maddox, chief financial officer at Wynn Resorts, said there are no large casino projects on the drawing board in Las Vegas to spur double-digit growth.
"You're forecasting a significant increase in revenue and no increase in supply," Maddox told Moody's analyst Daniel White. "Never happened."
(Copyright 2010 by The Associated Press. All Rights Reserved.)