Nevada's next two-year budget could grow by $900 million to $1.64 billion, according to new state revenue forecasts

What happened

Nevada's governor and Legislature could have at least $1 billion more to spend in the coming two-year budget than in the previously approved one, according to forecasts presented Wednesday, The Nevada Independent reported. The projections were shared with the state's Economic Forum, a panel of five private-sector economists that state law tasks with setting the size of the next budget.

Depending on which forecasts the panel chooses, lawmakers could have between $900 million and $1.64 billion more for the next two-year budget, according to the outlet. Two years ago, the initial budget was about $1 billion bigger than the year before.

How the budget number gets set

A final decision comes next month

The Economic Forum did not make final budget decisions at Wednesday's meeting. It will use the forecasts to finalize the size of the budget next month, and that number can change at the end of March as more economic data becomes available, The Nevada Independent reported.

The figure the forum approves will be the basis for the governor's recommended budget, which is due in January. The forum did approve another body's projections for minor revenue sources, which showed a decrease from the current budget cycle, driven largely by lower revenue from unclaimed property and cigarette taxes.

A contrast with 2025

Lawmakers faced a budget crunch during the 2025 legislative session amid broader economic concerns. According to the outlet, it was the first time since 2009 that the money available decreased mid-session, and Gov. Joe Lombardo's initial 2025 budget proposal had a deficit of $335 million.

Why revenue is rising

General fund revenues grew by about 7.5 percent in the 2026 fiscal year. Forecasters expect growth to slow slightly in the current fiscal year before rising again in time for the next budget cycle, The Nevada Independent reported. Economists noted that some of the growth comes from inflation and higher insurance premiums, meaning part of the added state money comes out of Nevadans' pockets.

Sales tax beat expectations

Sales and use taxes make up about 30 percent of annual general fund revenues. For the fiscal year that ended in June, those revenues came in about $113 million higher than forecast, though about a quarter of that was due to anomalies in tax collection processes. "That one surprised us all," Hayley Owens, an economist with the Nevada Legislative Counsel Bureau, said, according to the outlet.

The Nevada Independent reported that the growth was driven in large part by smaller sectors such as manufacturing and data centers. Owens added that while this could point to the benefits of a diversified economy, those industries are also more volatile.

Higher prices drive much of the gain

Kumael Bilgrami, an economist with Moody's Analytics, agreed with a forum member's view that about 90 percent of expected sales tax growth is due to the cost of goods. He said collections should keep growing, but "weak tourism and cost pressures on consumers will keep a lid on those gains," The Nevada Independent reported.

Tourism and the wider economy

The forecasts arrive against an uneven economic picture. Moody's Analytics said the state continues to struggle with declining tourism, though its job growth is on "solid ground," according to the outlet. Rising costs are straining Nevadans and making travel to the state less likely, while a wealthier visitor base in Las Vegas is providing some cushion.

Economists expected some trends, including higher gas prices and the decline in Las Vegas tourism, to ease in the next budget cycle. The state is also likely to see revenue surges from major sporting events, as Las Vegas is set to host the college football championship, the men's college basketball Final Four and the Super Bowl through early 2029.

The governor's race connection

The budget outlook matters for whoever wins the governor's race. Attorney General Aaron Ford, the Democratic candidate, has proposed many policies that would likely carry a price tag, The Nevada Independent reported. Lombardo, the Republican incumbent, has offered fewer specifics about legislation for a possible second term, and both candidates have pledged not to raise taxes. Voters can review the key early voting dates and recent coverage of Ford's criticism of Lombardo's policies.

What to watch next

• The Economic Forum is expected to finalize the size of the next two-year budget next month.
• The governor's recommended budget, based on the forum's figure, is due in January.
• The budget number can change at the end of March as more economic data becomes available.