Early trouble signs for Nevada budget

By Eric Neugeboren, The Nevada Independent, April 24, 2025

A Nevada panel that provides projections for the state’s non-major revenue sources for the next two years approved a less optimistic outlook on Wednesday than estimates it made in November, driven in large part by bearishness regarding Las Vegas tourism.

The meeting of the state’s Technical Advisory Committee on Future State Revenues — composed of economists and legislative fiscal staff — comes one week before Nevada’s Economic Forum meets to project the revenue from major sources such as the sales tax for the next two budget years. 

The governor and lawmakers are legally bound to pass a two-year balanced budget that relies on the Economic Forum’s tax revenue forecast — making its upcoming May 1 meeting a crucial juncture for Republican Gov. Joe Lombardo and Democratic legislative leaders, especially if expected revenues decrease and cuts need to be made. 

There is widespread angst surrounding the upcoming forum’s budget projections — and a handout provided at Wednesday’s meeting didn’t help. 

In the first nine months of the fiscal year, the state experienced a decrease of 3.2 percent ($102 million) of tax revenue compared with the same point in 2024, largely because of a roughly 9 percent decrease in revenue from the state’s sales and use tax.

Here are the highlights (or lowlights) from Wednesday’s meeting.

• The committee approved revenue projections for tax credits and non-major revenues — which make up about 12 percent of total state revenues and include sources such as insurance taxes and fees and fines  — that marked a significant reduction in its prior estimates for fiscal years 2026 and 2027.
  • Compared with the November projections, the latest estimates expect a roughly $16 million decrease in non-major revenues for both fiscal year 2026 and fiscal year 2027.
    • This represents a roughly 2.3 percent decrease in projected revenues compared to the November forecast.
  • The projections also indicate an expected decline in non-major revenues over the next two years.
• There was an expected $8 million increase in projections for fiscal year 2025, but that was only because of a recent $10.5 million fine assessed to Resorts World for money laundering violations.
• Some of the largest drivers of the decreased revenue projections were related to decreased tourism to Las Vegas — a significant red flag for the state’s economy — including a projected $7.5 million decrease in revenue estimates for fees related to rental cars.