Posts Tagged ‘revenue’

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Legislative Panel Recommends Four Proposals as Finalists for Revenue Study

By Sean Whaley | 1:37 pm October 15th, 2009
CARSON CITY – A legislative panel today moved four proposals forward as finalists for a study of Nevada’s revenue structure, with a submittal by Moody’s Analytics at a cost of $253,000 receiving the highest rating from lawmakers.
The other three proposals recommended for further consideration are Willdan Financial Services, the second choice of the panel, with a study cost of $153,205; and two tied for third: the Center for Regional Studies at the University of Nevada, Reno, at a cost of $909,861; and Nevada Consultants Inc. of Las Vegas at a cost of $500,000.

Moody’s is based in West Chester, Penn., and Willdan is out of Sacramento, Calif.

Four other proposals were rejected.

The finalists were selected after each lawmaker picked their top three favorites. The top selection received three points, the second, two points and the third, one point. Lawmakers offered a number of reasons for their selections, including knowledge of Nevada and Nevada issues, the quality of the proposal, cost and the ability to meet the required deadlines.

The next step in the selection process will be oral presentations by the four finalists to the full Interim Finance Committee’s Subcommittee to Conduct a Review of Nevada’s Revenue Structure, likely in late October or early November. Ultimately the IFC, made up of the Senate Finance and Assembly Ways and Means committees, will pick the firm to perform the review. It must be completed by July 1, 2010, well ahead of the 2011 session of the Legislature.

A maximum budget of $500,000 has been set for the study, but the IFC can go higher if it decides it wants to do so.

Lawmakers want a study to provide guidance on how to deal with a two-year budget in 2011 that is expected to be as much as $2.4 billion out of balance.

Senate Minority Leader Bill Raggio, R-Reno, the chairman of the panel reviewing the tax study bids, said at a meeting Oct. 7 there is no preordained decision to increase taxes.

He also said it is critical that a study be performed without a hint of special interest influence. Because of that and the high cost, Raggio did not select the UNR proposal as one of his favorites.

Raggio said the presentation was outstanding, but that there might be a perception among some people that the end product would be biased, given that UNR is funded with general fund dollars by the Legislature.

Even so, the decision to move the UNR proposal was part of a unanimous vote of the panel.

Knight Allen, a resident of Las Vegas who testified as a Nevada citizen, asked the panel to reconsider including the UNR proposal because of the need for unbiased study results. Whether intentional or not, biases can creep into the best intentioned study when it is being performed by a public entity involving public revenue matters, he said.

The panel did not change its recommendation, however.

Steven Miller, vice president for policy at the Nevada Policy Research Institute, said the purported study will be biased no matter who performs the work.

“It’s the same old story,” he said. “The politicians spend every cent in sight. Then they try to fool the voters with a study that is never designed to get spending under control but to find new revenue.”

Given that the result is predetermined, the least costly proposal is the best of a bad lot for taxpayers, Miller said.

The study will go forward despite objections from Gov. Jim Gibbons that the inevitable result will be a recommendation for higher taxes. Gibbons voted against the funding request Tuesday at a meeting of the Board of Examiners, but the other two members of the board voted in favor.

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Funding for Tax Study Approved Over Governor’s Objections

By Sean Whaley | 11:28 am October 13th, 2009

CARSON CITY – Over the objections of Gov. Jim Gibbons, the Board of Examiners today approved a request to spend $500,000 on a study of Nevada’s revenue structure sought by a bipartisan group of legislative leaders.

The $500,000 figure is not guaranteed to be the final price of the study, an uncertainty that caused Gibbons to vote against the request.

Eight bids have been submitted to lawmakers ranging from a low of $32,200 to $909,861. Six of the eight were for $500,000 or less.

Lorne Malkiewich, director of the Legislative Counsel Bureau, presented the request to the Board of Examiners, saying the actual amount of the contract will be negotiated and approved by the Legislature’s Interim Finance Committee on Nov. 19 if not before.

But Gibbons said it was not appropriate to bring a $500,000 “carte blanche” request to the board. The legislative subcommittee reviewing the eight bids should make a selection and bring that amount to the board, he said.

“It seems to be premature to approve $500,000,” Gibbons said.

The Board of Examiners will meet again before the IFC meeting, and a specific proposal could be approved at that time, Gibbons said.

But the other two members of the board, Secretary of State Ross Miller and Attorney General Catherine Cortez Masto, voted to approve the request. Gibbons is a Republican, while Miller and Masto are both Democrats.

State Budget Director Andrew Clinger informed the board that any amount approved would be a recommendation only, and that the Legislature could appropriate any amount for the study it saw fit.

Malkiewich said lawmakers decided to seek the $500,000 now because of the urgency of the study, which is scheduled to be completed by July 1, 2010. The lawmaker panel is going to review the bids again on Oct. 15.

The $500,000 bid was submitted by The Nevada Consultants Inc., a Las Vegas-based company.

Lawmakers want a study to provide guidance on how to deal with a two-year budget in 2011 that is expected to be as much as $2.4 billion out of balance.

Senate Minority Leader Bill Raggio, R-Reno, the chairman of the panel reviewing the tax study bids, said at a meeting Oct. 7 there is no preordained decision to increase taxes. An impartial study of the state’s tax structure is needed, however, to provide guidance, he said.

His comments were echoed by Senate Majority Leader Steven Horsford, D-Las Vegas, who said the Legislature wants options on how to balance the budget in 2011.

The study is required to be performed by a qualified and independent consultant and will examine the allocation of tax revenues between the state and local governments, the adequacy of revenues and the stability of different tax revenues, among other issues.

A panel of citizens, not yet appointed by the Legislature, will also participate in the study process.

Gibbons vetoed a bill passed by the 2009 Legislature for an appropriation for a revenue study, requiring lawmakers to use their contingency fund instead.

After the meeting, Gibbons said spending $500,000 on a tax study is unnecessary.

If a study is to be funded, do it for the least amount of money possible, he said.

“We don’t have a tax problem in the state of Nevada, we have a spending problem,” Gibbons said.

(This story was updated at 2:08 p.m. on Oct. 13, 2009.)

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Gaming Revenue Down Again In August

By Sean Whaley | 4:22 pm October 8th, 2009
CARSON CITY – It could almost be considered good news.

For only the second time in the past 11 months, Nevada casinos reported a single rather than double-digit decline in gaming win, this one coming in August compared to the same month in 2008.

Nevada’s statewide casino industry reported a win of $847 million in August, a 9.3 percent decline from August 2008 when the win was $934 million, according to a report released today by the Gaming Control Board.

It was the 20th straight month of revenue decline for Nevada’s biggest industry.

While a single-digit loss was encouraging, Frank Streshley, control board Tax and License Division chief, cautioned that the casino industry is expected to continue to suffer for several more months before an anticipated turnaround sometime in the first half of calendar year 2010.

Baccarat, a card game preferred by high end players, saw a 48.5 percent increase in win by casinos in August to $109.5 million. Without this play, likely the result of international players drawn to the Las Vegas Strip due to a weak dollar, the Nevada gaming win would have been off by double digits yet again, Streshley said.

“I can’t say we’re at the bottom, not with a 9 percent decline,” he said. “Again it’s not double-digit. Without the baccarat play it definitely would have been. So we still have a ways to go.”

The revenue report shows the gaming win in Clark County in August was down 6.7 percent to $708 million. On the Strip, the win was off by 9 percent and totaled $450 million.

Two Clark County markets, both with new properties, were the only two regions in the state to show an increase in gaming revenue. North Las Vegas, where Station Casinos Aliante Station opened in November 2008, saw gaming revenues up 22 percent to $22 million. The Boulder Strip area, where the M Resort Spa Casino opened in March, saw an increase of nearly 22 percent to $63 million.

The numbers were even bleaker in other areas of the state.

Washoe County saw a nearly 21 percent drop to $74 million, while the South Lake Tahoe market was off nearly 29 percent to $22 million.

For Washoe County, it was the 26th straight month of revenue declines. The August win for the county is the lowest for any August since 1989, Streshley said.

For the South Shore Tahoe market, the August win was the lowest since the board started keeping monthly statistics in 1983. In August of 2000, gaming win in this market was $44.1 million.

One factor to consider in analyzing the August report is that the three-day Labor Day weekend fell entirely within September this year, Streshley said.

Overall it was a tough summer, he said. For June through August, revenues were off 11.9 percent.

The continued decline in gaming revenue will keep the pressure on Gov. Jim Gibbons and the Legislature to deal with lower than anticipated tax revenues. A special session of the Legislature is a possibility if revenues don’t show some sign of recovery or at least stability by later this year.

Gaming taxes, a major source of state general fund revenues, are off 7.85 percent for the first three months of this fiscal year and total $153 million.

The forecast for this revenue source was a decline of 4 percent for this fiscal year, but Streshley cautioned that the target could still be hit if the industry rebounds in the second half of the fiscal year.

State Budget Director Andrew Clinger said the August report doesn’t change the budget picture one way or the other.

“We’re down about $7.5 million in gaming revenues so far,” he said. “It’s nothing too alarming at this point. We still have to wait until we get the final first quarter numbers and then we will make a decision.”

Those first quarter numbers are expected by the end of November.

With sales tax revenues included, the state is off by about $10 million from its projections so far this fiscal year, which began July 1. As to whether a special session of the Legislature will be needed, Clinger said it will depend entirely on how severe the shortfall becomes over the next few months.

But any decisions on how to balance the budget will include the Legislature, either in a special session or in cooperation with the Legislature’s Interim Finance Committee, he said.

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