Revenue Forecasting for Nevada’s State Government

Prior to the 1980’s, the Nevada Legislature approached spending with a measured, responsible eye. Over a couple of years back then, it converted to push hard for more and more spending every session. This attitude was not a function of Nevada’s growth rate, which has run at a constant rate since the 1960s.

During the late 80s and early 90s, the Legislature’s zeal to spend led to an embarrassing series of “budget cuts” caused by the Legislature’s aggressive forecasts of revenue. They planned unrealistic increases in revenue, then planned to spend it, then found themselves having to “cut the budget” back down to fit the actual increases in revenue.

This led to the creation of the “Economic Forum” in 1993 – an independent group that is supposed to forecast revenue without the political addictions to spending that tormented legislative leadership.

Here is the economic forum’s website.

At the close of the 2007 Legislature, the forum was forecasting state tax revenue to be $6.8-billion for the two years starting July 1, 2007. Last week, they estimated state tax revenue will be $5.7-billion for the next biennium, a reduction of $1.1-billion or 16%.

Remember, these dollar figures and percentages are measured over two year periods.

The Economic Forum will make their final forecast for the next biennium at the beginning of May 2009; this will be the “final answer” to which legislators will adjust their spending budget for the next biennium.

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