GENERAL GOVERNMENT JOINT SUBCOMMITTEE CLOSING LIST #2
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GENERAL GOVERNMENT JOINT SUBCOMMITTEE
CLOSING LIST #2
April 9, 2021
EXECUTIVE
BUDGET ACCOUNT
BUDGET PAGE
Volume II
Department of Tourism and Cultural Affairs
Tourism Development (225-1523) TOURISM - 24
Tourism Development Fund (225-1522) TOURISM - 16
Museums & History (101-2941) TOURISM - 43
Nevada Magazine (530-1530) TOURISM - 26
Nevada Humanities (101-2894) TOURISM - 31
Stewart Indian School Living Legacy (101-2601) TOURISM - 11
Indian Commission (101-2600) TOURISM - 33
Lost City Museum (101-1350) TOURISM - 47
Nevada Historical Society (101-2870) TOURISM - 52
Nevada State Museum, CC (101-2940) TOURISM - 56
Nevada State Museum, LV (101-2943) TOURISM - 60
NV State Railroad Museums (101-4216) TOURISM - 64
Nevada Arts Council (101-2979) TOURISM - 72
Staff Closing Recommendations Summary
EXHIBIT B Senate Committee on Finance ID# 774
Date: 4-9-2021 Total pages: 45
Exhibit begins with: B1 1 thru: B45B2 2
BASN524 Nevada Legislative Counsel Bureau April 9, 2021
Budget Closing Action Report Page 1 of 3
General Government Joint Subcommittee
W01 - GOVERNOR RECOMMENDS
Title: TOURISM - TOURISM DEVELOPMENT Budget Page: TOURISM-24, Volume II
Account: 225 - 1523
2019-20 2020-21 % 2021-22 % 2022-23 %
Revenues Actual WP Chg GOV REC Chg GOV REC Chg
OTHER FUND 4,971 4,652 (6.42) 4,293 (7.72) 4,293
INTERAGENCY TRANSFER 100,000 100,000 50,000 (50.00) 100,000
BALANCE FORWARD (7,319) 124,171 (1796.56) 128,823 3.75 135,464 5.16
Total Revenues 97,652 228,823 134.32 183,116 (19.97) 239,757 30.93
Total FTE
Note: The work program year figures in the table above may not reflect all of the actions taken during the interim and approved by
the Governor’s Finance Office, the IFC, or by the 31st Special Session.
Adjustments to Revenue
Dec Unit Cat GL Description 2021-22 2022-23
Gov Rec Gov Rec
Sub-total 0 0
Line Item Changes to Revenues 0 0
Adjustments to Expenditures
Dec Unit Cat GL Description 2021-22 2022-23
Gov Rec Gov Rec
Sub-total 0 0
Line Item Changes to Expenditures 0 0
Total 0 0
Grand Total General Fund Impact of Closing Changes 0 0
Grand Total Highway Fund Impact of Closing Changes 0 0
Overview
This budget provides grant funds for the Tourism Development Grant program, which was created to support
rural tourism infrastructure development and is authorized in NRS 231.360. Grants are provided to counties,
cities, and local and regional organizations, and are awarded on a competitive basis with a 1:1 match generally
required from the local entity. Typical projects include visitor centers, kiosks and improving rest stops.
The budget is primarily funded with transfers of room tax revenues from the Tourism Development Fund.
Major Closing Issue
Reduction in Tourism Development Grants
B3
3Discussion of Major Closing Issue
Reduction in Tourism Development Grants (E-500, TOURISM-24)
Recommendation: The Governor recommends a $50,000 reduction in room tax transfers from the
Tourism Development Fund and a corresponding reduction in the Tourism Grants expenditure category in
FY 2022. While the narrative in The Executive Budget indicates this decision unit replaces room tax transfers
with General Fund appropriations, the supporting detail of the budget does not include such a replacement.
Summary of Issues: The recommended reduction would decrease funds available for the
Tourism Development Grant program in FY 2022 to $47,652, a reduction of 52.3% when compared to the
$100,000 legislatively approved for each year of the 2019-2021 biennium. This decision unit is related to
Decision Unit E-600 in the Tourism Development Fund budget.
Details Provided During the Subcommittee Hearing: The Tourism Development Grant program funds
tourism-related infrastructure projects targeted at improving the visitor experience, such as improving,
restoring, or creating signage, building improvements, and visitor kiosks. According to the agency, prior to
FY 2020, grants were awarded on a two-year cycle. During the 2018 grant cycle, the agency received
35 applications totaling $477,538, and 25 grantees were selected to receive a total of $200,000 in grants,
which were paid between FY 2018 and FY 2020. FY 2018 projects were matched with $180,000 in funding,
providing a total of $380,000 for tourism-related projects. During the FY 2020 grant cycle, 36 applications
were received for a total request of $481,388; however, the agency did not award grants due to COVID-19.
According to the agency, most grant applicants are small nonprofits that do not apply for federal grants, and
a reduction in available grants from the Department of Tourism and Cultural Affairs in the upcoming biennium
would not impact the availability of federal funds for the applicants.
Reserves: The Governor’s recommended budget for the 2021-23 biennium includes reserves of $135,464 in
FY 2022 and $142,105 in FY 2023.
Hearing Discussion and Post Hearing Update/Information:
During the February 23, 2021, hearing, the Subcommittee inquired about the anticipated impacts of the
Governor’s recommended reduction to the Tourism Development Grant program, and the agency indicated
this program is considered to be secondary to the Rural Marketing Grant program administered through the
Tourism Development Fund budget, recommended to total $730,547 in FY 2022 and $1.5 million in FY 2023.
The recommended reduction in this budget would impact rural tourism infrastructure projects. The
Subcommittee discussed whether it would be appropriate to utilize reserves to restore the recommended
$50,000 reduction in Tourism Development Grants in FY 2022, and the agency indicated it would consider
utilizing reserves to fund grants. The reserves in this budget are primarily comprised of room tax transfers
from the Tourism Development Fund unspent in previous fiscal years, and also include Nevada Tourism
license plate renewal fees and interest. It would be appropriate to utilize these funding sources to support
the Tourism Development Grant program. As this budget only supports grants, it is not necessary to maintain
a reserve for operational cash flow purposes.
Therefore, the Subcommittee may wish to consider utilizing a portion of reserves to restore the recommended
$50,000 reduction in Tourism Development Grants in FY 2022. Utilizing $50,000 in reserves would restore
grants to $97,652 in FY 2022, which is the same as FY 2020 actual grant expenditures and grants
recommended for FY 2023. Considering the Governor’s recommended budget includes reserves of
$135,464 in FY 2022 and $142,105 in FY 2023, if the Subcommittee wishes to approve this option, this
budget would have reserves of $85,464 in FY 2022 and $92,105 in FY 2023.
B4
4Options for the Subcommittee:
A. Approve a reduction in room tax revenues transferred from the Tourism Development Fund of
$50,000 and a corresponding reduction in Tourism Development grants in FY 2022, as
recommended by the Governor, resulting in authority of $47,652 for Tourism Development Grants
in FY 2022.
B. Approve a reduction in room tax revenues transferred from the Tourism Development Fund of
$50,000 and approve utilizing reserves of $50,000 in FY 2022, which would result in authority for
Tourism Development Grants of $97,652 in each year of the upcoming biennium.
Other Closing Items
None
http://lcbfiscal/Secretary Session Document/1523cls_NM_dt.docx
B5
5B6 6
BASN524 Nevada Legislative Counsel Bureau April 9, 2021
Budget Closing Action Report Page 1 of 10
General Government Joint Subcommittee
W03 - GOVERNOR RECOMMENDS
Title: TOURISM - TOURISM DEVELOPMENT FUND Budget Page: TOURISM-16, Volume II
Account: 225 - 1522
2019-20 2020-21 % 2021-22 % 2022-23 %
Revenues Actual WP Chg GOV REC Chg GOV REC Chg
OTHER FUND 19,113,615 26,616,307 39.25 17,245,452 (35.21) 23,220,686 34.65
INTERAGENCY TRANSFER 235,609 4,985,142 2015.85 14,603 (99.71) 14,603
BALANCE FORWARD 1,310,402 4,736,892 261.48 11,335,585 139.30 11,803,778 4.13
Total Revenues 20,659,626 36,338,341 75.89 28,595,640 (21.31) 35,039,067 22.53
Total FTE 27.00 27.00 27.00
Note: The work program year figures in the table above may not reflect all of the actions taken during the interim and approved by
the Governor’s Finance Office, the IFC, or by the 31st Special Session.
Adjustments to Revenue
Dec Unit Cat GL Description 2021-22 2022-23
B000 00 2511 Adjust transfer to Governor's Washington Office to align with (33,678)
revenue in that budget
Sub-total 0 (33,678)
Line Item Changes to Revenues 0 (33,678)
Adjustments to Expenditures
Dec Unit Cat GL Description 2021-22 2022-23
B000 42 9000 Adjust transfer to Governor's Washington Office to align with 33,678 33,678
revenue in that budget
B000 65 9000 Adjust transfer to Nevada Arts Council to align with revenue in that 60
budget
B000 86 9000 Adjust transfer to Governor's Washington Office to align with (33,678) (67,356)
revenue in that budget
B000 86 9000 Adjust transfer to Nevada Arts Council to align with revenue in that (60)
budget
Sub-total 0 (33,678)
Line Item Changes to Expenditures 0 (33,678)
Total 0 0
Grand Total General Fund Impact of Closing Changes 0 0
Grand Total Highway Fund Impact of Closing Changes 0 0
Overview
The primary mission of the Division of Tourism (Tourism) is to generate revenue for the State of Nevada
through activities that encourage both short-term and long-term tourist visitation. The division accomplishes
this through administering a marketing plan that consists of a research program, measuring visitation and
identifying salient consumer purchase behavior; public relations, public affairs and social media outreach;
traditional and digital advertising; web and mobile application development; domestic and international sales,
including a presence at consumer and travel trade shows; and grants, educational programs and conferences
designed to enhance business opportunities for Nevada's tourism industry. The division is mainly funded
through room tax revenues, with limited funds received through conference registration fees.
B7
7Major Closing Issues
1. Room Tax Revenue Projections
2. Room Tax Transfers Reduction
3. Budget Reductions
4. Transfer of Las Vegas Office Lease
Discussion of Major Closing Issues
1. Room Tax Revenue Projections (SUMMARY, TOURISM-22-23)
Recommendation: The Governor recommends room tax revenue of $17.2 million in FY 2022 and
$23.2 million in FY 2023, for a total of $40.4 million over the 2021-23 biennium.
Summary of Issues: The Governor’s recommended revenue of $40.4 million for the biennium is
$11.9 million, or 22.7%, lower than the $52.3 million approved by the 2019 Legislature for the
2019-21 biennium.
Details Provided During the Subcommittee Hearing: Room tax revenues have been lower in the
2019-21 biennium than the legislatively approved amount due to lower visitor volume and room nights
occupied related to travel and business restrictions. In FY 2020, the department received $19.1 million in
room tax revenue, or $6.6 million (25.8%), less than the legislatively approved amount of $25.7 million.
Agency projections utilized for the Governor’s recommended budget for the upcoming biennium dated
December 29, 2020, project room tax revenue of $9.7 million in FY 2021, which is $16.8 million (63.4%) less
than the legislatively approved amount of $26.6 million. In total, room tax revenues for the 2019-21 biennium
are projected to be $28.8 million, or $23.5 million (44.9%), less than the legislatively approved amount of
$52.3 million.
The Executive Budget recommends FY 2022 room tax revenues of $17.2 million, an increase from the
projected FY 2021 amount of $9.7 million based on an anticipated rebound in visitor volume and occupied
room nights. Fiscal Year 2023 room tax revenues are projected to increase further, by 34.7% from FY 2022,
to $23.2 million, as shown in the following table.
Division of Tourism Room Tax Revenue*
December 29, 2020
Actual Projected
FY 2020 FY 2021 Change FY 2022 Change FY 2023 Change
Room Tax Revenue $19,088,134 $9,731,629 -49.0% $17,219,971 76.9% $23,195,205 34.7%
Visitor Volume 42,036,841 28,398,414 -32.4% 45,346,002 59.7% 55,135,050 21.6%
Occupied Room Nights 43,291,711 28,968,916 -33.1% 46,608,242 60.9% 57,514,179 23.4%
Average Daily Rate - Clark County** $119.58 $101.88 -14.8% $112.40 10.3% $122.18 8.7%
Average Daily Rate - Mesquite $46.67 $42.37 -9.2% $52.26 23.3% $58.36 11.7%
Average Daily Rate - Washoe County $117.50 $111.84 -4.8% $118.36 5.8% $118.53 0.1%
*Projections provided by Division of Tourism
**Average Daily Rate for Clark County does not include Boulder City or Mesquite
Fiscal staff asked the agency for updated room tax projections, and projections dated February 9, 2021,
project lower room tax revenues than the previous projections. The following table displays variances
between the room tax revenue in the Governor’s recommended budget and the agency’s February 9, 2021,
projections. Updated revenue projections for the Subcommittee’s consideration are discussed under Hearing
Discussion and Post Hearing Update/Information.
B8
8Room Tax Revenues FY 2021-FY 2023 Comparison
Governor Recommends Compared to February 9, 2021, Division of Tourism Projections
2021-23 Biennium
FY 2021 FY 2022 FY 2023
Total
Governor Recommends $ 26,580,540 $ 17,219,971 $ 23,195,205 $ 40,415,176
February 9, 2021, Division
of Tourism Projections $ 9,395,762 $ 16,461,943 $ 22,913,677 $ 39,375,620
Difference $ (17,184,778) $ (758,028) $ (281,528) $ (1,039,556)
Room Tax Transfers: Due to the projected level of room tax revenue, the Governor recommends room tax
transfers to other state agencies of $11.4 million over the 2021-23 biennium, which is $1.3 million (10.1%)
lower than the $12.7 million approved for the 2019-21 biennium, as detailed in the following table, after
considering all decision units:
Governor's Recommended Room Tax
Transfers from the Tourism Development Fund
Legislature Governor
Approved Recommends
Intra-Agency Transfers to: 2019-21 2021-23 Change %
Nevada Arts Council $2,358,574 $2,485,574 $127,000 5.4%
Nevada Indian Commission $174,141 $161,858 -$12,283 -7.1%
Stewart Living Legacy $385,276 $359,416 -$25,860 -6.7%
Lost City Museum $487,853 $472,253 -$15,600 -3.2%
Nevada Historical Society $715,843 $657,895 -$57,948 -8.1%
Nevada State Museum-CC $1,838,803 $1,651,708 -$187,095 -10.2%
Nevada State Museum-LV $1,760,575 $1,705,145 -$55,430 -3.1%
State Railroad Museums $1,357,954 $1,299,140 -$58,814 -4.3%
Division of Museums $555,696 $493,039 -$62,657 -11.3%
Tourism Development $200,000 $150,000 -$50,000 -25.0%
Nevada Magazine $266,113 $265,562 -$551 -0.2%
Subtotal $10,100,828 $9,701,590 -$399,238 -4.0%
Inter-Agency Transfers to:
Nevada Film Office $1,363,924 $1,171,608 -$192,316 -14.1%
Governor's Washington Office $213,022 $139,472 -$73,550 -34.5%
State Parks $1,018,262 $403,423 -$614,839 -60.4%
Subtotal $2,595,208 $1,714,503 -$880,705 -33.9%
Total Transfers $12,696,036 $11,416,093 -$1,279,943 -10.1%
Fiscal staff notes that transfers to the Governor’s Washington Office are $33,678 lower in each year and
transfers to the Arts Council are $60 lower in FY 2023 than corresponding revenues recommended in those
budgets. Fiscal staff recommends technical adjustments to reconcile transfers between the budgets, as
outlined in Other Closing Item 5. Specific decision units related to room tax transfers are discussed in
Major Issues 2 and 3.
Reserves: Fiscal staff notes reserves in The Executive Budget are overstated. The FY 2021 reserve of
$11.3 million in the Governor’s recommended budget is based on legislatively approved FY 2021 room tax
revenue of $26.5 million, which is $17.2 million higher than the agency’s most recent projection for FY 2021
of $9.4 million.
B9
9Based on the Governor’s recommended level of revenues and expenditures in the 2021-23 biennium and
the agency’s projected FY 2021 reserve of $3.2 million, the FY 2022 and FY 2023 reserves would be
approximately 80 days in FY 2022 and 83 days in FY 2023 in this budget, which has a target reserve level
of 60 days. Fiscal staff notes that updated revenue projections for the 2021-23 biennium that are lower than
revenue included in The Executive Budget would further decrease the reserve.
Hearing Discussion and Post Hearing Update/Information:
During the February 23, 2021, budget hearing, the agency indicated it anticipated Nevada tourism activity to
gradually improve over the 2021-23 biennium and to recover to within 7% of FY 2019 levels by the end of
FY 2023. According to the agency, tourism is resilient and pent-up demand for travel and hotel rooms would
drive the recovery. The projections used for room tax revenues in The Executive Budget were from
December 29, 2020, and due to changes in variables the agency considers when developing its projections,
Fiscal staff asked the agency for updated room tax revenue projections.
The agency provided updated revenue projections in March 2021 for three scenarios: best-case, mid-level,
and worst-case. The Executive Budget utilized the mid-level scenario of the agency’s December 2020
projections, which projected $40.4 million in room tax revenues over the 2021-23 biennium. The updated
projections best-case scenario for the upcoming biennium is higher than recommended in The Executive
Budget at $52.6 million over the 2021-23 biennium, while the mid-level and worst-case scenarios are lower,
at $38.8 million and $21.9 million, respectively. In the best-case scenario, vaccinations occur quickly and
travel and room demand also recover quickly, leading to record high levels of room demand and room tax
revenue by FY 2023, driven by an increase in room rates. In the mid-level scenario, as vaccines become
available, initial travel hesitation fades, with increasing travel in FY 2022 as conferences, conventions, and
shows resume, with the noted return to near 2019 levels by the end of FY 2023. In the worst-case scenario,
COVID-19 continues to spread and confidence in travel remains lower than previous levels, with no
significant recovery in the 2021-23 biennium. The projections for the three scenarios are shown in the
following table.
Comparison of March 2021 Room Tax Projection Scenarios
Variance from
Scenario FY 2022 FY 2023 Biennium Gov. Rec.
Governor's Recommended Budget $ 17,219,971 $ 23,195,205 $ 40,415,176 -
March 2021 Projections
Best-Case $ 25,387,793 $ 27,170,805 $ 52,558,598 $ 12,143,422
Mid-Level Case $ 16,349,389 $ 22,452,026 $ 38,801,415 $ (1,613,761)
Worst-Case $ 9,998,171 $ 11,939,536 $ 21,937,707 $ (18,477,469)
Reserve: The agency’s March 2021 projection for FY 2021 revenue of $9.9 million is $16.7 million (62.7%)
less than the legislatively approved $26.6 million. The agency indicated during the February 23, 2021, budget
hearing that in response to the reduction in revenue, the agency had reduced expenditures, including layoffs,
salary reductions, transfers of room tax revenues to other budgets, and was executing only the most essential
programs. The agency’s March 2021 projections for FY 2021 project reserves of $3.6 million, which is
$7.8 million less than the $11.3 million in the Governor’s recommended budget. The lower FY 2021 reserve
flows through to reserves in subsequent fiscal years. The following table displays reserve levels calculated
by Fiscal staff for the three revenue scenarios provided by the agency, based on expenditures recommended
in The Executive Budget.
B10
10Comparison of March 2021 Room Tax Projection Reserve Scenarios
Scenario FY 2022 FY 2023
Governor's Recommended Budget $ 11,803,778 $ 13,096,092
March 2021 Projections
Best-Case $ 12,193,440 $ 17,461,354
Mid-Level Case $ 3,121,358 $ 3,636,755
Worst-Case $ (3,196,182) $ (13,159,537)
As shown in the table, under the best-case and mid-level revenue projection scenarios, the reserve would
increase over the upcoming biennium. Under the worst-case scenario, the budget would be insolvent in
FY 2022 with the level of expenditures recommended in The Executive Budget. If the worst-case scenario
materializes, absent other supplemental revenue sources, the agency would need to submit work program
revision requests to the Interim Finance Committee for consideration to implement additional cost saving
measures.
As previously noted, The Executive Budget utilized the mid-level scenario of the agency’s December 2020
projections. The Subcommittee may wish to approve the agency’s updated mid-level room tax revenue
projections of $38.8 million over the 2021-23 biennium. During the 2021-23 biennium, if room tax revenue
increases or decreases from the legislatively approved amount, the agency could request work programs to
effectuate changes to approved revenue and expenditure levels. Using the agency’s March 2021 room tax
revenue projections for the 2021-23 biennium and March 2021 FY 2021 projected reserve level of
$3.6 million, with the Governor’s recommended level of expenditures for the 2021-23 biennium (inclusive of
technical adjustments), Fiscal staff projects FY 2022 reserves of $3.1 million (68 days) and FY 2023 reserves
of $3.6 million (60 days). The comparison to the Governor’s recommended revenue and reserve levels is
shown in the following table.
Tourism Development Fund Governor's Recommended Revenue and Reserves
Compared to Updated Projections
Governor Recommends Projections**
FY 2022 FY 2023 FY 2022 FY 2023
Revenues
Beginning Cash $11,335,585 $11,803,778 $3,557,425 $3,121,358
Room Tax Revenue $17,219,971 $23,195,205 $16,349,389 $22,452,026
Other Revenues * $40,084 $40,084 $40,084 $40,084
Expenditures (net of reserves) $16,791,862 $21,942,975 $16,825,540 $21,976,713
Reserves $11,803,778 $13,096,092 $3,121,358 $3,636,755
Reserve Days 257 218 68 60
* Other revenues include registration fees and transfers from Nevada Magazine
** Projections calculated by Fiscal staff based on FY 2021 agency reserve projection and agency March 2021 mid-
level room tax revenue projection for 2021-23 biennium and include technical adjustments to align transfers to other
budgets.
Fiscal staff notes that work programs have not been submitted to adjust the FY 2021 reserve levels to reflect
the agency’s updated projections. Therefore, to balance the budget, reserves in the legislatively approved
budget will be higher than shown in the table above. The reserve levels will be balanced as part of the
fiscal year-end closing process.
Decision for the Subcommittee:
Does the Subcommittee wish to recommend approval of the agency’s updated room tax revenues of
$38.8 million over the 2021-23 biennium?
B11
112. Room Tax Transfers Reduction (E-500, TOURISM-19)
Recommendation: The Governor recommends reducing room tax transfers to other budgets by $696,122
in FY 2022, accompanied by a corresponding increase in reserves.
Summary of Issues: The Governor recommends reducing room tax transfers to budgets within the
Department of Tourism and Cultural Affairs as well as the State Parks budget within the Department of
Conservation and Natural Resources by $696,122 in FY 2022 only and replacing the transfer reductions with
corresponding amounts of General Fund appropriations in budgets receiving the transfers.
Details Provided During the Subcommittee Hearing: Due to the projected decrease in room tax revenue,
the Governor recommends reducing transfers to the Department of Tourism and Cultural Affairs and
State Parks budgets, and replacing the transfer revenue with corresponding amounts of General Fund
appropriations in the receiving budgets, as shown in the following table:
FY 2022 Governor's Recommended
Replacement of Room Tax Transfers with General Fund
Room Tax
Transfer General Fund
Budget Reduction Replacement
Lost City Museum $ (17,537) $ 17,537
Nevada Historical Society $ (24,279) $ 24,279
Nevada State Museum, Carson City $ (61,404) $ 61,404
Nevada State Museum, Las Vegas $ (63,512) $ 63,512
State Railroad Museums $ (48,220) $ 48,220
Nevada Arts Council $ (33,593) $ 33,593
Indian Commission $ (13,912) $ 13,912
Division of Museums $ (18,494) $ 18,494
Stewart Living Legacy $ (11,748) $ 11,748
Department of Tourism and Cultural Affairs Subtotal $ (292,699) $ 292,699
State Parks $ (403,423) $ 403,423
Total $ (696,122) $ 696,122
According to the agency, the recommended transfer reductions and General Fund appropriation
replacements were determined by the Governor’s Finance Office based on the projected reductions in
room tax revenues and the operating needs of the receiving budgets. This decision unit does not include
reductions in transfers to the Governor’s Washington Office, Nevada Magazine, or the Film Office budgets
as these budgets do not receive General Fund appropriations. A reduction in transfers to the
Tourism Development budget is discussed as part of Major Closing Issue 3 below in Decision Unit E-600.
When the 2011 Legislature approved the creation of the consolidated Department of Tourism and
Cultural Affairs, room tax revenues began to partially support the Division of Museums and History, the
Nevada Arts Council and the Nevada Indian Commission. The Governor recommends transferring
$9.3 million in room tax revenue to the three divisions, which would continue to receive both General Fund
appropriations and room tax revenues, as shown in the following table, after considering all decision units:
B12
12Comparison of Governor's Recommended 2021-23 Biennium
General Fund and Room Tax Revenue Split by Division
Division of Museums Nevada Indian
Total
& History Nevada Arts Council Commission
General Fund $5,561,956 47% $1,272,139 34% $780,455 60% $7,614,550 45%
Room Tax Transfers $6,279,180 53% $2,485,574 66% $521,274 40% $9,286,028 55%
Total $11,841,136 100% $3,757,713 100% $1,301,729 100% $16,900,578 100%
This table only displays recommended General Fund appropriations and room tax revenue for comparison purposes. Other revenue
sources received within the Division of Museums and History (i.e., admission charges) and the Nevada Arts Council (i.e., federal funds)
budgets are omitted from this table.
The recommended funding split between General Fund appropriations and room tax revenue for the
Division of Museums and History has changed nominally, with the percentage of General Fund
appropriations increasing by 1 percentage point, and the room tax revenues decreasing by 1 percentage
point when compared to the 2019 legislatively approved percentages. The recommended funding split
between General Fund appropriations and room tax revenue for both the Nevada Arts Council and the
Nevada Indian Commission increases the proportion of General Fund appropriation by 4 percentage points,
with a corresponding 4 percentage point decrease in the percentage of room tax revenues when compared
to the 2019 legislatively approved percentages. Overall, when compared to amounts approved for the
2019-21 biennium, General Fund support as a percentage of overall funding for the Division of Museums
and History, Nevada Arts Council, and Nevada Indian Commission is recommended to increase by
1.3 percentage points, with a corresponding decrease in room tax support, over the 2021-23 biennium.
Hearing Discussion and Post Hearing Update/Information:
During the February 23, 2021, budget hearing, the agency indicated the recommended reduction in transfers
was due to the projected decrease in room tax revenue in the 2021-23 biennium. The agency testified that
due to reduced room tax revenue in FY 2021, the Division of Tourism executed only essential programs, and
reduced room tax transfers meant receiving agencies would potentially make similar reductions to programs
and services. The agency indicated the reduced room tax transfers were recommended to be replaced with
General Funds in FY 2022 only, due to the anticipated rebound in room tax revenue in FY 2023.
Decision for the Subcommittee:
Does the Subcommittee wish to recommend approval of reduced room tax transfers totaling $696,122
in FY 2022 to other budgets within the Department of Tourism and Cultural Affairs, as well as the
State Parks budget, as recommended by the Governor?
3. Budget Reductions (E-600, TOURISM -19-20)
Recommendation: The Governor recommends expenditure reductions of $2.7 million in FY 2022 and
$99,117 in FY 2023, with a corresponding increase in reserves.
Summary of Issues: The Governor recommends expenditure reductions totaling $2.8 million over the
biennium, comprised of FY 2022 reductions in marketing contracts of $1.8 million, dues and registrations of
$77,536, rural grants of $730,549, and transfers to tourism of $50,000, as well as travel reductions of $99,117
in each year of the 2021-23 biennium. According to the agency, the Marketing and Advertising category was
recommended to be reduced due to projected decreases in room tax revenues.
Details Provided During the Subcommittee Hearing:
Marketing and Advertising Category Reductions: According to the agency, the recommended reduction in
travel, dues and registrations, and marketing contract expenditures in the Marketing and Advertising category
is due to reductions in long-haul (flights longer than six hours) and international travel. The Governor’s
recommended $1.8 million FY 2022 marketing contract reduction would reduce media and creative work by
B13
13vendors, resulting in fewer ad placements and fewer new creative assets, particularly in international
markets. The recommended reductions in travel and dues and registrations is related to international and
media tours, and is also due to the reduction in long-haul travel.
The legislatively approved amount for the Marketing and Advertising category was $15.4 million in FY 2020
and $15.3 million in FY 2021, and actual FY 2020 expenditures totaled $10.7 million. If the recommended
reductions are approved, authority in the Marketing and Advertising category would total $7.6 million in
FY 2022 and $10.9 million in FY 2023.
Rural Marketing Grants: The Governor recommends reducing Rural Marketing Grants by $730,549 in
FY 2022, bringing total category authority to $730,547, compared to the $1.6 million approved for each year
in the 2019-21 biennium. In FY 2023, recommended authority for the category totals $1.5 million. Grants are
awarded to nonprofits and local tourism entities for a variety of marketing projects, including video production,
advertising, and attending travel and trade shows. In FY 2020, 335 applications were submitted totaling
$2.6 million, compared to $1.6 million in available grant funding. Similarly, in FY 2019, 317 applications were
received totaling $2.8 million. Matching funds of $1.0 million in FY 2019 and $906,613 in FY 2020 were
provided by grant recipients. According to the agency, most grant applicants are small nonprofits that do not
apply for federal grants, and a reduction in available grants from the Division of Tourism in the upcoming
biennium is not anticipated to impact the availability of federal funds for the applicants.
Transfers to Tourism Development: This budget transfers room tax revenue to the Tourism Development
budget for Tourism Development grants, which are used to fund tourism-related infrastructure projects, such
as signage, building improvements, and visitor kiosks. The Governor recommends a $50,000 reduction in
FY 2022, a 50% reduction from the $100,000 legislatively approved annual amount in the 2019-21 biennium.
This recommendation is discussed further in the closing document for the Tourism Development budget.
Hearing Discussion and Post Hearing Update/Information:
During the February 23, 2021, budget hearing, the agency indicated that due to travel restrictions, it had
focused its marketing efforts on in-state visitors by providing information and education to encourage travel
within the state, including state parks, day trips, and overnight stays. The agency indicated the recommended
$2.7 million reduction in FY 2022 would impact its engagement with international markets, as well as
domestic marketing and advertising. The agency indicated its staff would develop some of the marketing
campaigns and messaging in-house, due to the reduction in marketing expenditure authority. Regarding
future international marketing, the agency stated it would monitor international travel sentiment and
anticipates resuming marketing efforts in Canada and Mexico in FY 2022, with potential to restart marketing
efforts in other top international markets, including Australia, the United Kingdom, and Germany, in the
2021-23 biennium. The agency anticipates long-haul visits will not fully recover to pre-pandemic levels until
2023.
During the hearing, the agency indicated rural marketing grants were intended to strengthen the marketing
ability of the division’s partners to align with and leverage the Division of Tourism’s domestic marketing efforts
and the recommended reduction meant the partners would have less funding available for marketing efforts.
In response to follow-up questions, the agency indicated that if room tax revenues were higher than the
current projections in the 2021-23 biennium, the agency would prioritize the funding to restore rural marketing
grants, increase room tax revenue transfers to other budgets in FY 2023, and increase marketing and
advertising related contracts. Work program revisions would be necessary to effectuate any of these changes
if revenues are higher than currently anticipated.
B14
14Decision for the Subcommittee:
Does the Subcommittee wish to recommend approval of budget reductions of $2.7 million in FY 2022
and $99,117 in FY 2023, as recommended by the Governor?
4. Transfer of Las Vegas Office Lease (E-225, TOURISM-18)
Recommendation: The Governor recommends reducing lease expenses by $169,854 and a corresponding
increase in reserves over the 2021-23 biennium resulting from reducing the overall space to be leased at the
location and transferring the agency’s Las Vegas office lease to the Nevada Arts Council.
Summary of Issues: The Division of Tourism indicates it had two positions in its Las Vegas office as of
March 2020 and shared a 4,136 square foot space with the Nevada Arts Council, which was funded by the
Division of Tourism. The division now has one position in Las Vegas and the Governor recommends the
Nevada Arts Council budget assume lease and operating costs for a smaller space (1,214 square feet) in
Las Vegas.
Details Provided During the Subcommittee Hearing: As of March, 2020, the Division of Tourism had
two positions in its Las Vegas office, neither of which interacted with the public, according to the agency.
The positions included the market manager for Asia, who was laid off in June 2020 due to reduced revenue
and travel impacts from the COVID-19 pandemic; and an Information Technology (IT) Technician, who
provides IT services to the three state museums in the south and the Nevada Arts Council office and is now
housed at the Nevada State Museum in Las Vegas. As the division no longer has staff in the office location,
the Governor recommends the Nevada Arts Council budget fund the costs of a smaller space at the same
location (S. Eastern Avenue, near the intersection with E. Flamingo Road). Annual costs for the existing
4,136 square foot space total $84,927, and annual costs for the smaller 1,214 square foot space in the same
location total $33,351, for annual savings of $51,576. In the Nevada Arts Council budget, lease costs are
recommended to be funded by General Fund appropriations (E-225, TOURISM-74).
The division indicates it maintains interaction with Las Vegas area tourism organizations, including the
Las Vegas Convention and Visitor’s Authority, and states the division could reopen a Las Vegas office in the
future, depending on available revenues and staffing needs.
Hearing Discussion and Post Hearing Update/Information:
During the February 23, 2021, hearing, Subcommittee members expressed concern over the lack of
Tourism staff in Las Vegas. The agency indicated that it maintained strong partnerships with the Las Vegas
Convention and Visitor’s Authority, as well as the Las Vegas territory tourism committee The agency stated
that as revenue improved and positions were filled in the future, it would consider staff based in Clark County
or reopening an office in Las Vegas.
As previously noted, the corresponding decision unit in the Nevada Arts Council budget (E-225,
TOURISM-74) recommends funding the lease cost with General Funds. Fiscal staff would recommend
closing the Nevada Arts Council budget consistent with the Subcommittee’s decision for this decision unit.
Decision for the Subcommittee:
Does the Subcommittee wish to recommend approval of reducing the space currently occupied at
the Division of Tourism’s Las Vegas office, and transferring the existing lease to the Nevada Arts
Council for an expenditure reduction of $169,854 over the biennium, as recommended by the
Governor?
B15
15Other Closing Items
FY 2022 FY 2023
Other Reserve/ Reserve/
Closing General Exp. General Exp.
1 1
Items Category Description of Decision Unit Fund Offset Fund Offset
Replacement computer equipment
1
REPLACEMENT (E-710, TOURISM-20) $ - $ (8,023) $ - $ (9,123)
EQUIPMENT Software renewal (E-711, TOURISM-
2
20) $ (4,750) $ (4,750)
Transfer vehicle cost from Marketing
3 TRANSFER
category to In-State Travel category
(E-900, TOURISM-21)* $ - $ - $ - $ -
*Decision Unit E-900 is revenue neutral
1
Recommendations to fund expenditures in whole, or in part, with reserved funds will display as a negative dollar value as the reserve level
would be reduced. Alternatively, recommendations to decrease expenditure levels with an offset to reserves will display as a positive dollar
value as the reserve level would be increased.
4. Cost Allocation Adjustments (E-800, TOURISM-21): The Executive Budget includes expenditure
reductions of $58,664 in FY 2022 and $48,317 in FY 2023 and a corresponding increase in reserves to
align transfers of room tax revenue for enhancement decision units in receiving budgets.
Budget Amendment A214781522, received March 4, 2021, restores a recommended reduction in the
transfer of room tax revenues from this budget to the Museums and History budget. As noted in the
Museums and History budget closing document, the reduction in transfers of room tax revenue was
intended to be replaced by license plate fee revenue in the Museums and History budget to support
personnel costs, which is not an allowable use of the license plate fee revenue. With the budget
amendment, total transfers in Decision Unit E-800 represent a reduction of $8,647 in FY 2022, and an
increase of $1,783 in FY 2023, with corresponding changes in reserves each year. The Subcommittee
will be taking action on a portion of this decision unit as a major issue in the Museums and History budget
and staff requests authority to make technical adjustments based on the Subcommittee’s decision in the
other budget. With the authority to make adjustments for Budget Amendment A214781522 based
on the Subcommittee’s closing action in the Museums and History budget, this recommendation
appears reasonable.
5. Transfer Adjustments (BASE, TOURISM-16-17): As noted previously, to align transfers from this budget
to the Governor’s Washington Office and the Nevada Arts Council with receiving budget revenue
amounts, Fiscal staff recommends technical adjustments to increase transfers to the
Governor’s Washington Office by $33,678 per year and transfers to the Nevada Arts Council by $60 in
FY 2023. With the noted technical adjustment, this recommendation appears reasonable.
Fiscal staff recommends Other Closing Items 1 through 3 be closed as recommended by the
Governor, and Other Closing Item 4 be closed as recommended by the Governor with authority to
make adjustments for Budget Amendment A214781522 based on the Subcommittee’s closing action
in the Museums and History budget, and Other Closing Item 5 be closed with the noted technical
adjustments. Fiscal staff requests authority to make other technical adjustments as necessary.
http://lcbfiscal/2021 Subcommittee Closings Finalized/1522cls_NM_cmu.docx
B16
16BASN524 Nevada Legislative Counsel Bureau April 9, 2021
Budget Closing Action Report Page 1 of 3
General Government Joint Subcommittee
W01 - GOVERNOR RECOMMENDS
Title: TOURISM - MUSEUMS & HISTORY Budget Page: TOURISM-43, Volume II
Account: 101 - 2941
2019-20 2020-21 % 2021-22 % 2022-23 %
Revenues Actual WP Chg GOV REC Chg GOV REC Chg
GENERAL FUND 474,040 230,626 (51.35) 226,549 (1.77) 210,471 (7.10)
OTHER FUND 135,455 134,120 (0.99) 134,120 134,120
INTERAGENCY TRANSFER 279,196 333,651 19.50 235,799 (29.33) 257,243 9.09
BALANCE FORWARD (89,084) 378,859 (525.28)
REVERSIONS (1,158)
Total Revenues 798,449 1,077,256 34.92 596,468 (44.63) 601,834 0.90
Total FTE 4.00 4.00 4.00
Note: The work program year figures in the table above may not reflect all of the actions taken during the interim and approved by
the Governor’s Finance Office, the IFC, or by the 31st Special Session.
Adjustments to Revenue
Dec Unit Cat GL Description 2021-22 2022-23
Gov Rec Gov Rec
Sub-total 0 0
Line Item Changes to Revenues 0 0
Adjustments to Expenditures
Dec Unit Cat GL Description 2021-22 2022-23
Gov Rec Gov Rec
Sub-total 0 0
Line Item Changes to Expenditures 0 0
Total 0 0
Grand Total General Fund Impact of Closing Changes 0 0
Grand Total Highway Fund Impact of Closing Changes 0 0
Overview
The Division of Museums and History, Office of the Administrator, is responsible for the oversight and
administration of the statewide museum system. The division includes the administration office in
Carson City and the following facilities: the Nevada State Museum and the Nevada State Railroad Museum
in Carson City, the Nevada Historical Society in Reno, the Nevada State Museum in Las Vegas, the Nevada
State Railroad Museum in Boulder City, the East Ely Railroad Depot Museum, and the Lost City Museum in
Overton. The Office of the Administrator is funded with General Fund appropriations, license plate renewal
fees, and room tax revenue transfers from the Tourism Development Fund budget.
Major Closing Issue
Funding Source Change
B17
17Discussion of Major Closing Issue
Funding Source Change (E-501, TOURISM-45)
Recommendation: As a budget reduction measure, the Governor recommends replacing $182,031 in
revenues ($81,914 General Fund savings and $100,117 room tax transfer reduction) that support position
costs with a corresponding amount of license plate renewal fees over the 2021-23 biennium. To provide the
license plate renewal fees, a corresponding $182,301 reduction in the Commemorative License Plate
category is recommended.
Summary of Issues: Pursuant to NRS 482.37901, the Division of Museums and History receives one-half
of license plate renewal fees from the 150th anniversary of Nevada’s admission into the Union license plates.
The Governor recommends utilizing license plate renewal fees to support approximately 22% of total
personnel costs in this budget, which would be a new use of the funding.
Details Provided During the Subcommittee Hearing: Pursuant to NRS 482.37901, a $20 fee is charged
for 150th anniversary license plate annual renewals. The license plate renewal fees must be used for
educational projects and initiatives pertaining to the history of the state and other projects pertaining to
preserving, promoting, and protecting the heritage of the state, as opposed to costs associated with general
administration of the division. When license plate renewal fees were added to this budget during the
2017 Session, the agency testified that license plate renewal fees would be used to support program
improvements rather than personnel costs. Previously, the agency has utilized renewal fees to support
museum exhibits and provide grants for history-related initiatives and projects.
Considering that allowable uses of license plate renewal fees pertain to projects and initiatives relating to the
state’s history and heritage, as opposed to ongoing administrative costs, Fiscal staff asked the agency to
explain how the recommended use of funding aligned with statute. In response, the agency indicated that,
upon further review, the recommended use of funding would not be allowable, and the agency planned to
request a budget amendment. Fiscal staff confirmed with the LCB Legal Division that it would not be
appropriate to support personnel costs related to the general administration of the division with license plate
renewal fee revenue, such as costs in this budget associated with oversight and administration of the
statewide museum system.
In previous fiscal years, the agency has not expended all license plate renewal fees available in this budget.
In FY 2020, the agency received $135,455 in renewal fees and balanced forward $289,774 in renewal fees
collected in previous years, meaning total available renewal fee funding for FY 2020 was $425,229.
In comparison, the agency expended $46,370 in the Commemorative License Plate category in FY 2020, or
10.9% of available funding. The agency balanced forward $378,859 in license plate renewal fees to FY 2021
and has expended $30,000 fiscal year-to-date in the Commemorative License Plate category. The agency
indicates it anticipates balancing forward unspent license plate renewal fees to the upcoming biennium;
however, it has not yet identified a timeline for spending the funding.
Hearing Discussion and Post Hearing Update/Information:
During the February 23, 2021, budget hearing, the Subcommittee noted the agency had accumulated a
reserve of license plate renewal fees, and inquired about the agency’s plans to utilize the fees. Statutorily
allowable uses of fee revenue include projects and initiatives relating to the state’s history and heritage.
The agency indicated it had identified allowable uses of the license plate fees, including preserving its
collections and enhancing educational capabilities by funding projects including upgrading Wi-Fi in
museums, updating exhibits, making tactile representations of some artifacts for better access for persons
with disabilities, collection improvements, and providing museum materials for in-school use over the
2021-23 biennium.
B18
18In The Executive Budget, Decision Unit E-501 recommends utilizing license plate renewal fees to support
personnel costs, which does not align with the statutorily allowable uses of the fees. To ensure license plate
renewal fees are only utilized for purposes authorized by statute, Budget Amendment A214762941, received
on March 5, 2021, restores $81,914 in General Fund appropriations, $100,117 in room tax transfers, and the
$182,031 reduction in the Commemorative License Plate category over the 2021-23 biennium, thereby
eliminating Decision Unit E-501. With the budget amendment, license plate renewal fee revenue would not
be used to support personnel costs, but would rather provide funding for programmatic activities as allowed
by statute. Personnel costs would continue to be supported by General Fund appropriations and room tax
transfers. Corresponding Budget Amendment A214781522 was submitted to reinstate room tax transfers
from the Tourism Development Fund budget to this budget.
Decision for the Subcommittee:
Does the Subcommittee wish to recommend approval of Budget Amendment A214762941 to
eliminate Decision Unit E-501, restoring General Fund appropriations of $81,914, room tax transfers
of $100,117 and $182,031 in the Commemorative License Plate expenditure category over the
2021-23 biennium?
Other Closing Items
FY 2022 FY 2023
Other
Closing General Interagency General Interagency
Items Category Description of Decision Unit Fund Transfers Fund Transfers
Replace room tax transfers with
FUNDING SOURCE
1 General Funds (E-500, TOURISM-
CHANGE
45) $ 18,494 $ (18,494)
Fiscal staff recommends Other Closing Item 1 be closed as recommended by the Governor and
requests authority for staff to make technical adjustments as necessary.
Additional Information – No Action Necessary
One-Shot Appropriation (BUDGET OVERVIEW-21): The Governor recommends a FY 2021 one-shot
General Fund appropriation of $100,000 to restore the School Bus Program, which reimburses transportation
costs for elementary school students to visit Nevada state museums. Initially funded by the 2017 Legislature
as a pilot program with a $500,000 General Fund appropriation for the 2017-2019 biennium, the program
was continued by the 2019 Legislature with a $250,000 appropriation. However, only $7,700 was expended
in FY 2020 prior to the remaining $242,300 reverting as part of FY 2020 budget reductions approved at the
June 25, 2020, Interim Finance Committee meeting.
Capital Improvement Program (CIP) Projects (APPENDIX 6-7): The Governor recommends
three CIP projects for the Division of Museums and History during the 2021-23 biennium, funded with
$2.3 million in state funds (general obligation bonds), as shown in the following table:
Department of Tourism and Cultural Affairs - Governor recommended Capital Improvements
Project
Location Project Description State Funding
Number
Nevada State Railroad
M39 Museum, Carson City HVAC System Renovation $1,338,211
Lost City Museum,
M41 Overton Historic Pit House and Adobe Pueblos Repair $370,808
Nevada Historical Society,
M52 Reno HVAC System Renovation $584,098
Total $2,293,117
http://lcbfiscal/Secretary Session Document/2941cls_NM_dt.docx
B19
19B20 20
BASN524 Nevada Legislative Counsel Bureau April 9, 2021
Budget Closing Action Report Page 1 of 4
General Government Joint Subcommittee
W01 - GOVERNOR RECOMMENDS
Title: TOURISM - NEVADA MAGAZINE Budget Page: TOURISM-26, Volume II
Account: 530 - 1530
2019-20 2020-21 % 2021-22 % 2022-23 %
Revenues Actual WP Chg GOV REC Chg GOV REC Chg
OTHER FUND 847,315 1,095,609 29.30 789,554 (27.93) 849,554 7.60
INTERAGENCY TRANSFER 27,806 140,145 404.01 132,781 (5.25) 132,781
BALANCE FORWARD 41,696 127,891 206.72 217,333 69.94 128,764 (40.75)
Total Revenues 916,817 1,363,645 48.74 1,139,668 (16.42) 1,111,099 (2.51)
Total FTE 7.75 7.75 7.75
Note: The work program year figures in the table above may not reflect all of the actions taken during the interim and approved by
the Governor’s Finance Office, the IFC, or by the 31st Special Session.
Adjustments to Revenue
Dec Unit Cat GL Description 2021-22 2022-23
Gov Rec Gov Rec
Sub-total 0 0
Line Item Changes to Revenues 0 0
Adjustments to Expenditures
Dec Unit Cat GL Description 2021-22 2022-23
Gov Rec Gov Rec
Sub-total 0 0
Line Item Changes to Expenditures 0 0
Total 0 0
Grand Total General Fund Impact of Closing Changes 0 0
Grand Total Highway Fund Impact of Closing Changes 0 0
Overview
Nevada Magazine is the publications section of the Division of Tourism within the Department of Tourism
and Cultural Affairs and is responsible for preparing and producing publications to educate the public about
Nevada’s activities, heritage, culture, historical monuments, natural wonders, and natural resources.
Published since 1936, the Nevada Magazine complements and enhances the Division of Tourism’s goal of
attracting visitors. Nevada Magazine is an enterprise fund that receives no General Fund appropriations and
is funded through room tax transfers from the Tourism Development Fund budget, subscriptions, advertising
revenue, newsstand sales, and calendar sales.
Major Closing Issue
Long-Term Financial Stability
B21
21Discussion of Major Closing Issue
Long-Term Financial Stability (SUMMARY, TOURISM-29-30)
Recommendation: The Governor recommends revenue of $922,335 in FY 2022 and $982,335 in FY 2023
for total revenue (excluding balance forward) of $1.9 million over the 2021-23 biennium. Expenditures totaling
$2.1 million over the biennium are recommended, leading to declining reserves in this budget.
Summary of Issues: Although the 2019 money committees issued a letter of intent directing the agency to
develop a plan for long-term financial stability, recommended expenditures exceed revenues (excluding
balance forward) in the Governor’s recommended budget for the 2021-23 biennium.
Details: The Nevada Magazine budget is an enterprise fund, which provides goods or services to the public
and is intended to be a self-supporting entity, with all financial activities related to the publication or other
operations of the magazine accounted for in the fund. During the 2019 Session, it was noted that this budget
did not have sufficient funding for all costs related to Nevada Magazine. In addition, reserves in this budget
had been decreasing since 2016. To provide sufficient funding for costs and sufficient reserves to provide
cash flow, the money committees approved adding room tax revenue transfers of $266,113 over the
2019-21 biennium. As a result of discussions about declining reserve levels in this budget, the money
committees issued a letter of intent directing the agency to develop a long-term plan for financial stability and
report to the Interim Finance Committee the magazine’s progress towards reaching established goals and
objectives.
Letter of Intent Response: The reports provided by the agency during the 2019-20 Interim indicated it had
undertaken research and identified operational shifts that would provide long-term financial stability. In its
response presented to the Interim Finance Committee on October 22, 2020, the agency indicated it would
pursue the following changes in its effort to become financially stable, primarily related to increased revenue
generation:
o Reduce publications from six issues per year to four
o Broaden legacy magazine topics
o Enhance digital capabilities
o Attract larger advertisers and broader audiences through strategic partnerships
o Increase publications in its product portfolio
Revenues: As noted, the Governor’s recommended budget includes revenue of $1.9 million over the
2021-23 biennium (excluding balance forward), a decrease of $552,661 (22.5%) when compared to the
legislatively approved revenue of $2.5 million for the 2019-21 biennium. Revenue increases associated with
the changes noted in the agency’s letter of intent response are not included in The Executive Budget.
Recommended revenues include continuing room tax revenue transfers of $265,562 over the
2021-23 biennium to fund operating costs and maintain reserves. Considering the FY 2023 recommended
reserve of $65,582, this budget would become insolvent in the upcoming biennium without continued
transfers of room tax revenues. The Governor’s recommendations for this budget do not appear to reflect
improved long-term financial stability.
In response to questions from Fiscal staff regarding the implementation of changes identified in the letter of
intent response, the agency indicated that it shifted production of Nevada Magazine to four issues per year.
However, the agency indicates that progress towards other identified actions, such as expanding ad revenue,
has been limited due to the COVID-19 pandemic and its impact on the agency’s tourism advertisers.
B22
22The agency indicates it has identified future potential revenue increases from publishing the Division of
Tourism’s 2022 Visitor’s Guide, worth approximately $200,000 to $300,000 in additional revenue; expansion
of its digital subscription base to generate approximately $11,000 in additional revenue; and expanding
ad sales through increased distribution, for approximately $240,000 in additional revenue. However, the
agency did not provide detailed timing for the potential revenue increases, which are not included in the
Governor’s recommended budget.
Expenses: The Governor recommends expenditures of $1.0 million each year in the 2021-23 biennium, for
a total of $2.0 million over the biennium, which is a reduction of $239,391 (10.4%) compared to
legislatively approved expenditures of $2.3 million for the 2019-21 biennium. The Governor recommends
maintaining FY 2020 actual Magazine Printing expenditures of $109,212 per year, for a reduction of $84,886
(28.0%) over the biennium compared to the legislatively approved $303,310 for this expenditure over the
2019-21 biennium. In addition, the Governor recommends maintaining FY 2020 actual levels of
operating expenses in the upcoming biennium, for a total of $186,848 over the 2021-23 biennium, which is
a reduction of $225,350 (54.7%) when compared to the legislatively approved operating expenses of
$412,198 over the 2019-21 biennium.
Reserves: The reserves for this budget in the Governor’s recommended budget are approximately 46 days
for FY 2022 and 23 days for FY 2023. Reserves for enterprise accounts typically should equate to
approximately 60 days of operating expenditures to maintain an adequate cash flow. However, the agency
indicates recommended reserve levels are adequate for its operations.
Hearing Discussion and Post Hearing Update/Information:
At the February 23, 2021, budget hearing, the agency indicated that as the economy recovers and advertisers
are able to increase expenditures, the agency anticipates implementing the identified operational changes,
such as broadening legacy magazine topics, enhancing digital capabilities, and attracting larger advertisers
and broader audiences through strategic partnerships, to increase subscribers and gain advertisers in order
to provide long-term financial stability. In addition, the agency testified that due to the success of its specialty
publications, including its ghost town book, the agency was considering publications focused on other
specialty areas, including trains and road trips. However, the timing of implementing operational changes
and producing other specialty publications is uncertain, and The Executive Budget does not include decision
units to effect any such changes in the 2021-23 biennium. If operational changes are implemented during
the 2021-23 biennium, the agency may need to request work program revisions to reflect changes in revenue
and/or expenditure levels.
In response to questions about reducing costs, the agency indicated it had maintained reduced levels of
travel and magazine printing costs, consistent with its actual FY 2020 base expenditure levels. At this time,
the agency indicates all reasonable reductions have been identified and implemented. The agency stated
that as the publications section of the Division of Tourism, it anticipated continuing transfers from the
Tourism Development Fund to support Travel Nevada-related publishing costs. It anticipated this budget
becoming self-sustaining in the future; however, no specific timeframe for achieving sustainability has been
determined.
Considering the Governor’s recommended budget includes room tax transfers of $265,562 over the
2021-23 biennium and utilizing reserves to continue operations, resulting in reserves declining from
approximately 46 days in FY 2022 to 23 days in FY 2023, the Subcommittee may wish to recommend issuing
a letter of intent to require the agency to continue to report on its progress in completing identified steps
towards financial stability to the Interim Finance Committee during the 2021-23 biennium.
B23
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