hr: Money

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A continuing downtrend in Nevada sales as of February has caused increased worries about the State’s budget deficit, Nevada Officials reveal. They are bracing for the worse to come and are expecting the shortfall to approach $1 billion by mid-2009.

Sales have gone down February to $3.62 billion, a 5.4 percent decrease from the same month the previous year. Since the start of the fiscal year last July, sales are down 2.3 percent compared with the same period in the prior fiscal year.

The report shows the state’s cut of sales taxes so far this fiscal year is $635.2 million, $75 million or 7.1 percent below forecasts. It follows a recent Gaming Control Board report that the state’s taxes on casino winnings are nearly $50 million, or 8 percent, below forecasts for the same period.

“The February economic numbers show that Nevada’s economy is experiencing many of the same challenges that are being seen in other states across the country.

“Clearly, the drop in consumer spending is having an adverse effect on revenues, as is the nationwide housing problem which is particularly acute in Nevada,” Gov. Jim Gibbons said.

Taxes on the casinos and on sales are the two largest revenue sources for state government. The slump in those revenues is a key part of an analysis that the state’s revenue shortfall will hit $914 million by mid-2009. An update of that analysis is expected in late May.

The current shortfall estimate hasn’t included the impact of a Nevada Supreme Court decision last month that a tax refund is due a hotel-casino on free meals provided to patrons and employees.