Nevada's state budget is structured around tax revenues and operates on two-year cycles known as a biennium.
The State of Nevada Economic Forum, a committee consisting of five economic experts appointed by the Governor, convened on Monday to provide forecasts for the state's primary general fund revenue sources.
Thanks to a post-pandemic increase in sales and significant entertainment events—such as the Super Bowl, Formula 1 racing, and the Las Vegas Sphere—Governor Joe Lombardo and state legislators have more tax revenue at their disposal.
The Economic Forum projects that the state's budget will grow to $12.4 billion for the 2025-2027 biennium, an increase from $11.5 billion in the previous biennium. This represents a 7% growth.
Nevada General Fund Appropriations 2023-2025
Economic Forum Forecast State Revenues 2025-2027
However, the economic advisor indicates that the state may experience a cooling down period.
While Nevada's hospitality industry is expected to remain stable, future tax revenues may struggle to keep pace. Economists believe stabilizing inflation and interest rates will positively impact the state budget. Nonetheless, Nevadans are consuming less, and the job market shows signs of cooling.
"Our forecast is slightly more conservative, particularly in the final 2025 and especially towards the start of the year and the next couple of quarters, gaining speed further out as we start to see those interest rates come down. So, still expecting growth here, but these numbers are going to be lower," said Mandel.
Mandel notes that there is some uncertainty regarding the new administration. While Trump's proposed corporate tax cut could benefit Nevada's economy, the state's high number of foreign-born workers means that his suggested mass deportation of undocumented immigrants could have a significant impact.
"If we have a more restrictive immigration policy, if we have deportations, or more restrictive legal immigration, for example, that will reduce some of this labor force potentially impacting leisure hospitality, potentially impacting home building, some of these other areas," said Mandel.
Another way to interpret Mandel's outlook is that, following three robust fiscal years, it takes time for the state to maintain the same level of growth. We reached out to the chair of the Economic Forum, but they did not comment.
