(Sean Whaley/Nevada News Bureau) – The final economic report anticipated by the Gibbons administration before deciding whether a special Legislative session is needed to balance the budget was released today, and the news was not good.
The taxable sales report showed consumers and tourists purchased $3.2 billion worth of goods in September, a 17.7 percent decline over September 2008.
For the first three months of the fiscal year that began July 1, taxable sales are down 20.3 percent compared to the same period in the previous year.
It was the 11th straight month of double-digit declines.
The one bright spot in the report was sales taxes collected from bars and restaurants, which was up 5.5 percent in September 2009 over September 2008. All other major categories were lower, many by double digits. The construction category was off by nearly 57 percent.
Clark County taxable sales were down 16.5 percent, while Washoe County was off 20.6 percent.
Tax collections to the state general fund are down by $12.5 million compared to what was forecasted.
The report, released by the Department of Taxation, is the first to show how the modified business tax revenues are performing. The tax was hiked by the Legislature for large businesses to raise additional funds to balance the current budget. The tax rate was lowered for small businesses.
The report shows the business tax collections compared to estimates are down 3.4 percent, or $15 million from what was anticipated.
The news was not as grim for other state general fund revenue sources.
The insurance premium tax quarterly report shows collections are off by less than 1 percent for the first three months of fiscal year 2010. The real property transfer tax is actually up by 4.6 percent compared to projections.
Gov. Jim Gibbons said of the report: “September tax collections continue to reflect that Nevada is heavily impacted by the current national economic recession.
“We must all work together to stimulate our economy by creating jobs and getting Nevadans working,” he said. “My administration will also maintain our efforts to keep government spending in check and we will monitor and plan for the effects of the overall condition of the economy.”
Gibbons spokesman Dan Burns said the report completes the revenue side of the picture needed to assess the health of the budget. Spending information is still being gathered by the governor and staff, he said.
“Gov. Gibbons will use revenue and spending numbers and will seek input from legislative leaders and others before determining whether a special session is necessary,” Burns said.
The decision could come later this month or in January.