State sales increase 4.1 percent
Neither higher taxable sales nor lower budget expectations could nudge a key revenue indicator beyond previous forecasts, a Friday report said.
Nevada’s retailers and businesses rang up $4.47 billion in taxable sales in March, a 4.1 percent gain when compared with $4.3 billion in March 2006, according to the Nevada Department of Taxation.
Gross revenue from sales-and-use taxes was $337.03 million in March, up 1.94 percent from March 2006. Despite the increase, the portion of sales-and-use revenue committed to the state’s general fund for fiscal 2007 was $7.8 million, or 0.77 percent, below projections of the Economic Forum, which provides revenue estimates for budget recommendations.
Until the Economic Forum updated its forecast on May 1, sales-and-use taxes destined for the general fund, which covers functions including schools and prisons, were $22.1 million below projections for fiscal 2007. The Economic Forum’s month-old budget prognosis cut $88 million from November’s fiscal predictions, paring Nevada’s 2007-2009 revenue from $6.92 billion to $6.84 billion.
Gov. Jim Gibbons’ budget used November’s higher tax figures so the newer numbers have required state legislators to curb spending on new programs, such as all-day kindergarten, in the lawmaking session scheduled to end Monday.
"The Economic Forum has diminished our expectations somewhat, and that is good because it’s more realistic," said Brent Boynton, communications director for Gibbons. "We still have some concerns, because our economy is increasing at a slower pace than what we’ve become accustomed to during the past 2 1/2 years. But we’re hopeful because of the upturns we saw in last month’s figures."
March’s 4.1 percent sales growth was an improvement over 3.5 percent in February and 0.9 percent in January.
But the most recent month’s sales gains were unimpressive compared with the increases of 2004, 2005 and 2006, when sales often rose 10 percent or more a month year over year.
The slowdown began a year ago, when growth of taxable sales in Nevada tumbled from 11.4 percent in February 2006 to 4.1 percent in March 2006. Sales increases have languished in the single digits since.
Local economists have blamed slower sales partly on faltering residential construction.
New-home sales through April were down 42.4 percent, from 11,947 closings to 6,812 closings, when compared with the first four months of 2006, according to SalesTraq. The sluggish housing market has also forced down consumer spending, as slackened home equity means homeowners aren’t shelling out as much cash for major purchases such as cars or vacations, experts say.
Gibbons said in a statement that construction, mining and consumer spending are showing signs of renewed strength.
"The bottom line is that the Nevada economy remains strong," Gibbons said. "We’re only seeing smaller growth percentages than we’ve become accustomed to," rather than negative numbers.
Clark County posted $3.34 billion in taxable sales in March, a 3 percent increase from $3.24 billion a year earlier. Taxable sales in Washoe County rose 3.4 percent, from $596.6 million to $616.8 million.
Taxable sales fell in five of Nevada’s 17 counties, including Churchill, Douglas, Lincoln, Lyon and Pershing counties.
Nevada also collected $120.9 million in excise taxes in March on goods such as cigarettes, alcohol and live entertainment, the Department of Taxation reported.
Nevada’s taxable sales were $36.93 billion in the first nine months of fiscal 2007, which began in July 2006. That sales tally is up 2.9 percent from the $35.89 billion recorded in the first nine months of fiscal 2006.
