Tourism, economic development offices hit

Lawmakers heard testimony Monday about widening budget gaps for separate commissions that focus on Nevada's economic development and tourism, and debated what would happen if the two panels were merged.

Both the Commission on Economic Development and Commission on Tourism face budget shortfalls beyond what was anticipated in Gov. Jim Gibbons' proposed budget, because of rapidly declining revenues and because some items were mistakenly left out of when the plan was presented in January.

Even though lawmakers are expected to give final approval to a room tax increase, the Commission on Tourism is projecting less revenue from the room tax than what was originally expected. Part of that tax funds agency operations.

"The hits keep on coming," state Budget Director Andrew Clinger said during an Assembly Ways and Means hearing. "Obviously the increase in the (revenue) hole isn't something you can easily figure out."

Before factoring in the new projections on revenue losses, the tourism commission faced a 60 percent reduction in funding, including losing a third of its staff.

The staff of Nevada Magazine, which promotes tourism in the state, would be reduced to two employees. The office would eliminate its budget for postage, which means it would not be able to mail the magazine to potential tourists. Instead, people would be directed to a Web site.

"Without these positions, we will be less able to sell Nevada as a tourist destination," said Steve Woodbury, acting director of the Tourism Commission, adding that the commission generated $68 million in revenue for the general fund last year.

The Commission on Economic Development already is set to lose four positions, based on its original revenue projections, but will have to revise its budget to factor in the reduced revenues. That commission attracted 72 companies in the past two fiscal years, which created 1,961 jobs that pay an average wage of $20.59 per hour.

Lawmakers said they did not think it would be a good idea to combine the two agencies, and questioned whether it would actually save the state money. Both agencies generate revenue for the state, by attracting companies that create jobs and tourists who spend money.

Economic Development chief Mike Skaggs said the merger would save $98,000 for his agency. But he also said that the agency would have to bring on a deputy director to oversee the duties previously handled by the tourism commission director, at a cost of about $200,000. That's not in the governor's budget, according to Andrew Clinger, Gibbons' budget director.

If the merger went through, the Commission on Tourism would save $268,000 over two years, Clinger said.