Teachers will be getting only half the 4 percent raise budgeted for other state workers July 1 because of the state's revenue shortfall.
Teachers were guaranteed a 2 percent raise by Gov. Kenny Guinn and the 2001 Legislature. But the remainder was tied to a "trigger" requiring the state to have an ending fund balance of at least $154 million for a 1 percent raise and $194 million for a 2 percent increase for teachers.
With general fund revenues now projected to fall $86.4 million below the estimates used to build the 2002 budget, the ending fund balance probably won't reach $120 million, Budget Director Perry Comeaux said Wednesday.
"I don't know exactly what it's going to be, but it isn't going to be $154 million," he said.
He said the Board of Examiners will adopt the new revenue and reversion estimates at its May 14 meeting.
Comeaux said the budget will be reviewed again in the fall to see if there is enough money for the teacher pay raises, but he doubts the state's revenue picture will improve that much over the summer.
The new revenue projections were made by the Technical Advisory Committee on Future State Revenues, a panel headed by Comeaux and composed of budget experts within the state and from outside government.
The committee accepted staff estimates that sales tax revenue will fall $22.7 million short of what the budget was based upon, growing 2 percent over last year instead of the projected 5.5 percent.
Gaming tax revenues are in even worse shape, according to Legislative Counsel Bureau analyst Russ Guindon. Gaming taxes are expected to finish this fiscal year 3.8 percent down from the previous year -- $41.4 million below the forecast used in the budget.
Shortfalls in business license, cigarettes, mining and casino entertainment taxes increase the red ink by another $12.7 million, and other revenue sources including those used to balance the budget at the end of last session will fall about $9.6 million short.
The bulk of that "other" category is increased fees charged by the secretary of state, which Guindon said will total $7.2 million less than projected.
Comeaux said the state is making up some of the deficit by increasing the amount of reversions by agencies in fiscal 2002. Reversions come from unused portions of the budget, including one-time expenses such as equipment purchases that can be postponed, or delays in starting or expanding programs.
The budget estimated reversions for this year at $38.9 million. With the added reversions, the committee adopted a new estimate of $46.5 million. Some of the larger pieces of those reversions include $2.5 million saved because the juvenile prison was shut down, $600,000 from University of Nevada, Reno because student fees came in higher than expected, and $2.7 million from the low-income home energy assistance program, which officials say will be replaced by a Housing Division grant.
Another $1.5 million will come out of money budgeted for the state's new integrated financial system.
Comeaux and University Vice Chancellor for Finance Dan Miles emphasized the reversions and the revenue estimates are estimates.
"Historically, these early estimates of reversions have proven to be understated," Miles said.