Tough times

The state's financial picture continues to worsen as the nation's economy slips toward recession.

Nevada's unemployment rate hit 7.1 percent in August, the largest in 23 years. Analysts expect that number to reach as high as 8.6 percent in coming months.

Meanwhile, sales and gaming tax receipts -- which account for about two-thirds of state revenues -- have fallen far short of projections and show no signs of recovery. So far this fiscal year, the state has collected $285 million, about 6 percent less than what was anticipated.

Lawmakers and the governor has already reduced the anticipated rate of spending growth by $1.2 billion over the current biennium. Similar reductions will almost certainly be required for the two-year cycle beginning in July 2009.

Lawmakers were called into special session earlier this year to deal with the budget crunch. But they lacked the political will to address such obvious issues as potential layoffs or the generous raises the state recently provided its public employees.

They only postponed the inevitable.

Gov. Jim Gibbons said last week he may seek another special session after the November election, even though lawmakers are set to convene for their regular 120-day gathering in fewer than four months.

"I'm not going to rule it out at this point in time," Gibbons said. His decision will hinge on "what the next few weeks bring."

It's prudent to leave all options on the table.

But the governor should do all he can to avoid another special session -- especially since lawmakers will be back in Carson City come February.

But given there is no appetite for increasing taxes -- among either Republican or Democratic legislators -- lawmakers had best be prepared for zero budget growth over the next few years. And that will entail finally getting a handle on mushrooming personnel costs.