LAS VEGAS (AP) - Officials in county that includes Las Vegas have projected an 18% increase to its budget beginning in July, a sign they believe the economy will steadily recover after a downturn caused by the coronavirus pandemic.
Clark County Chief Financial Officer Jessica Colvin said projected revenue growth is also reflective of how much the county needed to make up as a result of the pandemic, the Las Vegas Review-Journal reported Tuesday. Colvin said revenue growth usually hovers between 6% and 7% annually.
“To say that the last 12 months have been a challenge is an understatement,” she said.
Lawmakers approved a $1.5 billion tentative budget for the upcoming fiscal year, which begins July 1, less than a year after passing a nearly $1.3 billion spending plan. The $230 million increase came after expected growth in sales taxes, gaming license fees and room tax collections as businesses slowly begin to reopen.
The budget will not use reserves, unlike the current fiscal year. It also calls for the rainy day fund to be restored to 10% of operating expenses.
“With a structurally balanced budget, the county is living within our means; however, the service demands out there far outweigh the resources,” Colvin said. She noted child welfare services are expected to cost $29 million above available revenues, and the county’s detention center is operating at a $19.3 million structural deficit.
Room tax continues to be the county’s hardest hit revenue source during the pandemic, with losses of nearly $88 million, officials said. The tax, which is affected by both occupancy and room rates, is also critical because it’s used to repay more than $2 billion in bonds.
County officials also estimate $149 million in losses in consolidated tax, primarily sales tax and gaming license fees, both expected to bring in $431.5 million and $34.8 million next fiscal year.
The tentative spending plan did not factor in the $439 million that the county is expected to see under President Joe Biden’s $1.9 trillion economic recovery package.
Colvin said county lawmakers will consider how to allocate that funding in the near future. The deadline for the final budget is June 1.
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