Software allows instant budget analysis

September 10, 2002 - A computer model created to help the Nevada Task Force on Tax Policy will also allow Gov. Kenny Guinn to see several working forms of his state budget at any given time.

Guinn said the model, developed by task force chairman Guy Hobbs and economist Jeremy Aguero, will allow for analysis of a number of "what-ifs."

"This will allow me to bring a number of parallel budgets," Guinn said.

Hobbs and Aguero, who are not being paid for their services, will use the model to determine how changing variables - like tax increases - will change state programs.

"For the purposes of what we're trying to do with the task force, we modeled every agency of the state," Hobbs said.

Guinn appointed Hobbs, a Republican, to chair the task force. Aguero, an economist for Applied Analysis, was tapped to provide technical assistance and has been responsible for most of the documents supplied to the task force members.

The computer model will allow quick calculations based on the type of data submitted.

For example, Hobbs or Aguero could input a 3 percent growth in Medicare cases and instantly see what effect that would have on future budgets.

"We can say what would happen if assessed value grew by 1 percent or less," Hobbs said. "It just gives you instant feedback."

Guinn said changing the budget would be as simple as pushing a button.

"With cigarette taxes, if we want to double that, we'll get to see the bottom line right away," Guinn said.

Assemblywoman Chris Giunchigliani, D-Las Vegas, vice chairwoman of the Ways and Means Committee, said the governor's new tool may not be a godsend to lawmakers. It could be tough to work with different versions of a budget, she said.

"Our staff needs to be able to work off a like budget model," Giunchigliani said. "We are still all one state and we can't have two different sets of books out there."

Giunchigliani also said that while she appreciated the work Hobbs and Aguero are doing, she wants to be sure that state budget office and legislative staff do proper analysis of all numbers.

Nevada is facing an immediate $230 million shortfall that has caused Guinn to order all state agencies to cut budgets by 3 percent. The shortfall could grow to $2.4 billion in the next eight years, if the state only funds existing programs and offers no expansion of services.

The Economic Forum will present its final forecast on the state's economy Dec. 1. Guinn must submit his budget two weeks before the Feb. 3 start of the 2003 legislative session.

By creating at least two budgets Guinn is essentially readying a proposal with tax increases and keeping a status quo budget - something his Democrat opponent for governor thinks shows indecision.

"If what he is proposing to do is submit two to the Legislature, and if they select the one with the tax increase, then they're the ones raising the taxes," state Sen. Joe Neal said. "He as governor should make those decisions.

"He cannot as governor come to us and say the state of the state is two-pronged. That's a bad way to govern and shows indecision."

The task force, which has been meeting all year, must make recommendations to Guinn and the Legislature by Nov. 15. on how the state can solve what many believe to be a structural deficit in the budget.

The group is considering several tax options including raising tobacco and liquor taxes, instituting a gross receipts business tax, creating an entertainment tax and adding new services to be covered under the state's sales tax.

The task force will meet Friday in Las Vegas, and will convene again Sept. 18 if more work is needed.

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Article Copyright ©: E. Neff, Las Vegas Sun