Almost half the states facing budget shortfalls

CARSON CITY — If misery loves company, then Nevada, struggling with revenue shortfalls and budget cuts, is just one member in a very big club. From Arizona and California to Alabama and Maine, nearly half of the states are reporting or anticipating budget shortfalls next year.

The housing slump is getting its share of the blame for next fiscal year’s shortfalls, estimated at a minimum of $23 billion in 13 states, including Nevada, according to an analysis by the Washington, D.C.-based Center on Budget and Policy Priorities.

An additional 11 states are reporting likely budget problems next year or the year after, according to the nonprofit, nonpartisan center.

Nevada, which approves budgets two years at a time, is also facing a shortfall on projected revenues this fiscal year, which began July 1.

A separate analysis issued by the National Conference of State Legislatures reports that 24 states have been hurt by the housing slump and that the states’ fiscal picture could get worse if there is a national recession.

"If the economy takes a turn for the worse, state finances undoubtedly will decline from the situation reported here," the report says.

Nevada is facing a $450 million shortfall over two years, or about 6.6 percent of the total $6.8 billion general fund budget, according to the latest estimates.

Sen. Bob Beers, R-Las Vegas, said the findings corroborate what many already knew — that Nevada is not unique in dealing with budget and revenue issues.

The collapse of the residential real estate boom may have been more pronounced in Nevada because of a higher level of speculation by investors here than in many other states, he said.

"This might have made the statistical reporting of our real estate fall slightly more spectacular than in some other states," Beers said.

But Nevada does seem to be in a stronger position because it has not relied on gimmicks to balance its budget, as some other states have done, he said.

"Some states seem to have started doing what the federal government is doing, taking on debt to fund salaries and operating costs," Beers said.

State Budget Director Andrew Clinger said Nevada has been conservative in its approach to budgeting, which puts the state in a better position to deal with lower-than-expected revenues.

"We haven’t used one-time funds to balance the budget and we’ve done a pretty good job of bolstering our rainy day fund," he said.

But Clinger agrees that if the country goes into a recession the revenue picture could worsen for Nevada and many other states.

"The gaming industry has weathered the slump pretty well so far," he said. "But it is definitely something to be cautious about. If a slowdown starts to affect the gaming sector it will make it a lot worse for us."

Although the collapse of the housing market and its effect on sales tax revenues is seen as a big factor in the state budget problems, the report by Elizabeth McNichol and Iris Lav for the Center on Budget and Policy Priorities finds other causes as well.

Some states, such as Florida and Michigan, have enacted tax reductions that are proving to be unaffordable.

Others, including Alabama, Arizona and California, according to the report, are dealing with a structural budget imbalance where revenues grow more slowly than the cost of providing state services.

Others, including Connecticut and New Jersey, have revenue issues as a result of using one-time funds, including surpluses, to pay for tax cuts or increased spending.

Nevada is not included in these three categories, but it is one of the top states with budget problems where structural deficits are identified as a contributing factor.

A separate report by the center identifies 10 factors contributing to structural deficits where revenue does not keep up with spending, including the super majority requirement to raise taxes, which the center said hampers the ability of lawmakers to modernize tax codes. The shift in the national economy from the production of goods to services, which are often not taxed, as well as the growth in Internet sales where taxes are often not paid, are two other factors that apply to Nevada.

The center reports that 12 of the states currently facing fiscal problems — Alabama, Arizona, California, Florida, Kentucky, Michigan, Missouri, Nevada, Oklahoma, Rhode Island, South Carolina, Texas, and Virginia — have at least seven of the 10 identified risk factors and so are at highest risk of a structural deficit.

Assemblywoman Sheila Leslie, D-Reno, a member of the Assembly Ways and Means Committee, said Nevada belongs in the category of states with a high risk of a structural deficit in part because of its over-reliance on sales and gaming taxes, which make up the majority of the state’s tax revenue.

"I think our budget gap fits into that section the best because sales/gaming tax revenue is cyclical and difficult to predict and leads us to these sharp downturns every few years," she said.

Leslie said Nevada’s revenue structure is a very shaky foundation on which to build a two-year budget. The result is a cycle where the state has a $300 million surplus one time and a $500 million hole the next.

There is a growing call for a more stable tax revenue structure, she said.

"If we don’t seriously confront this problem, we will continue to see a disintegration of our communities and businesses will stop relocating here, tourists will avoid us and our residents will suffer greatly," Leslie said.

The center report said the effect of the revenue shortfalls could mean cuts in education and health programs unless state legislatures opt to raise taxes instead.

Nevada Gov. Jim Gibbons had made his position clear: He will not support new taxes as part of a solution to any state revenue shortfall.

And Beers, a member of the Senate Finance Committee, said any suggestion that tax increases are a solution to revenue problems is shortsighted.

A conservative analysis of the payroll tax collections in Nevada for the first quarter of the fiscal year suggests that somewhere between $300 million and $500 million in wages anticipated to be earned did not materialize for Nevada workers, Beers said. So average Nevadans are already suffering from the current economic conditions.

"It doesn’t make sense to now raise taxes and increase the hardship on people," he said.

Nevada’s gaming revenues are projected to be on target for the current budget. But sales and other revenues with a connection to the slumping housing market are another matter.

The NCSL report found that at least 12 states are seeing declines in their real estate transfer taxes, including Nevada, because of the housing slump.

The Center on Budget and Policy Priorities reports that the collapse of the housing market has hurt taxable sales as well because of lower demand for furniture, appliances, construction materials and related products.

Real estate transfer and sales tax collections are both contributing to Nevada’s revenue problems. For the first quarter of the 2007-08 fiscal year, real estate transfer taxes in Nevada came in $6 million lower than what was projected by state officials. Sales tax collections for Nevada were off by $24 million below the forecasted amount for the same period.

Officials expected to make up $284 million of the state shortfall through cuts to operating budgets. The rest will be made up from the state’s rainy day fund and the delay of construction projects or other one-time expenditures.

The Center on Budget and Policy Priorities report does not suggest that all the other states are doing OK. Rather, many have just not updated their fiscal reports for the coming year.

But some states are doing better than others, according to the report. Some states, including New Mexico, Montana and Wyoming, are seeing revenue growth as a result of higher oil prices.

And some other regions’ economies are less affected by the national economic problems, according to the report. For example, states with high levels of exports are benefiting from the falling value of the dollar.

Henderson police bodycam footage of officer-involved shooting
Henderson police released body-worn camera footage of an officer-involved shooting in a grocery store parking lot at 2667 Windmill Parkway on Aug. 12, 2018. (Henderson Police Department)
Bicyclist suffers major head trauma in hit-and-run
A bicyclist was hospitalized with life-threatening injuries after a Thursday morning hit-and-run crash near the school formerly known as Agassi Prep. Police said the bicyclist was hit by a white SUV, which fled the scene. The injured man suffered multiple injuries including major head trauma. As of 9 a.m., Lake Mead remained closed between Martin Luther King and Revere Street while police investigate.
Las Vegas artist Dave Dave dies at 42
Dave Dave talks about his art and his life in 2016. (Michael Quine/Las Vegas Review-Journal)
Dave Dave, whose dad set him on fire in 1983, dies
Dave Dave, a respected Las Vegas artist who was badly scarred as a boy when his father tried to burn him to death in Southern California, died at Sunrise Hospital on July 15. He was 42. When he was 6, Dave's father tried to kill him by setting him on fire. He was given a sleeping pill and his bed at a Buena Park, California, motel was doused with kerosene. “I remembered being in a lot of pain,” Dave told the Review-Journal in 2016. “When stuff happens to you at that young of an age, you tend to block it out, but I remember the pain was excruciating.” Dave, who was born David Rothenberg, became close friends with Michael Jackson, who met him after the attack, which burned more than 90 percent of his body. “I wanted to meet him, and he wanted to meet me, and that just turned into a lifelong relationship that never ended,” Dave said. “It was amazing being friends with Michael Jackson. He was an amazing person.” Dave attended ArtCenter College of Design in Pasadena, California, and collaborated with various artists around Las Vegas, eventually selling his art to private collectors. Despite his challenges, he continued to live, thrive and create. Dave Dave
Homicide detectives investigate woman's death
Las Vegas police were called to Tahiti Village Resort early Wednesday after calls that someone had been shot. Police found a woman’s body between a parking garage and boiler room on the resort's property. A guest first reported hearing gunfire. There are no witnesses, but police will examine surveillance videos and look for clues. The woman was not identified, but a purse was found near the body. She did not appear to be a guest at the resort.
LVMPD Discusses Ross Dress for Less Shooting
LVMPD Assistant Sheriff Charles Hank discussed the 15th officer-involved shooting of the year at a press conference at Metro headquarters on Tuesday, Aug. 14. The active-shooter incident took place at the Ross Dress for Less store at the 4000 block Blue Diamond Road in the south Las Vegas Valley. (Madelyn Reese/ Las Vegas Review-Journal)
Metro Asst. Sheriff Brett Zimmerman on Aug. 8 officer-involved shooting
Metropolitan Police Department Assistant Sheriff Brett Zimmerman met with media Monday to discuss the details of the 14th officer-involved shooting of the year. (Madelyn Reese/ Las Vegas Review-Journal)
Clark County School Board president Deanna Wright on travel expenses
Clark County School Board President Deanna Wright says she followed proper expense protocol in trip to Florida last year.
Matt Kelly Elementary School hosted its third annual Back-to-School Red Carpet Program
Matt Kelly Elementary School hosted its third annual Back-to-School Red Carpet Program where community and business leaders joined to welcome students back with an inspirational welcome. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Shooting leaves 1 dead in southeast valley
A man was found fatally shot in the doorway of a squatter apartment after an argument ended in gunfire on Sunday night. Officers responded about 10:30 p.m. to the Silver Pines apartments and discovered the man in a breezeway in one of the buildings. The wounded man died at the scene, despite the efforts of another person, who tried to administer medical aid. Witnesses saw a man and a woman flee the scene, but were unable to give police a clear description.
North Las Vegas unveils new school crosswalk
North Las Vegas councilman Isaac Barron talks about the new school crosswalk in front of CP Squires Elementary School Monday, August 6, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
LVMPD Briefing on OIS #13
Assistant Sheriff Tim Kelly held a press conference to discuss details of the 13th officer-involved-shoot for the department in 2018. Video shows the moments before the suspect was shot. The shooting, which has been edited out, occurred as the suspect lunged at an officer outside the apartment. (Madelyn Reese/Las Vegas Review-Journal)
Sedan and semitrailer collide in south Las Vegas
An early Wednesday morning crash has left one person in critical condition. A sedan and semitrailer collided around 4 a.m. at the corner of Spencer Street and Serene Avenue. Police do not believe impairment is a factor in the crash. Spencer has been blocked off north of Serene while police continue their investigation.
Cybersecurity Professionals Flock to Las Vegas for Black Hat
Black Hat USA, the largest annual cybersecurity conference, is expecting a record 17,000 attendees during its six-day run at the Mandalay Bay Convention Center this week. One thing attendees have in mind is making sure they don't get hacked while they're there. (Madelyn Reese/Las Vegas Review-Journal)
Police chase ends with suspects captured in east Las Vegas
An early Tuesday morning chase ended with a car crash in an east Las Vegas neighborhood. Police were pursuing the vehicle, which they say was involved in robberies in Las Vegas and North Las Vegas, when the driver crashed at Owens and Statz Street. A man was taken into custody. A woman was ejected from a vehicle and taken to a hospital with non-life threatening injuries. The intersection at Mojave Road and Owens Avenue was shut down while police officers searched for the suspect and investigated. The intersection will remain closed for most of the morning.
Record number participate in Touro University Nevada White Coat Ceremony
Three hundred sixty-five medical students received their white coats during the Touro University Nevada White Coat Ceremony at the M Resort in Henderson Monday. The ceremony was developed to honor students in osteopathic medicine, physician assistant studies, nursing, occupational therapy and physical therapy as they accept the professional responsibilities inherent in their relationship with patients. (K.M. Cannon/Las Vegas Review-Journal)
Stop for school buses, urges CCSD
Clark County School District Police Department hold a mock traffic stop at Centennial High School in Las Vegas, Monday, Aug. 6, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Work Begins at Las Vegas Community Healing Garden
Crews moved the wooden Remembrance Wall at the Las Vegas Community Healing Garden on South Casino Center Boulevard Monday. Construction on a permanent wall is set to begin within the week. (Madelyn Reese/Las Vegas Review-Journal) @MadelynGReese
Man wounded outside Cottages apartment
Las Vegas police don't have a motive after a man was shot early Monday morning outside a northwest valley apartment. The man's mother called police to say her son had been shot. She called police around 1:15 a.m. Other people were inside the apartment but no one else was injured. Police are still looking for the shooter.
Ride new Interstate 11 segment in one minute
Interstate 11 opens to the public Thursday, providing sweeping views of Lake Mead, art deco-style bridges and a mural illustrating the construction of Hoover Dam. (K.M. Cannon/Las Vegas Review-Journal)
Miss El Tiempo 2019
Miss Teen El Tiempo and Miss El Tiempo 2019 were crowned at Sam's Town Saturday, August 4, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Las Vegas Woman Raises Awareness for Anxiety and Depression
Cassi Davis was diagnosed with anxiety and depression after the birth of her second child. After seeking help and support, she felt that there wasn't enough for support for those living day in and day out for those with mood disorders. She created the Crush Run, set for Sept. 22, to raise money for the Anxiety and Depression Association of America and bring together a community of people who live with the same conditions she does. (Madelyn Reese/Las Vegas Review-Journal)
North Las Vegas marks the opening of Tropical Parkway connector
The City of North Las Vegas, Nevada Department of Transportation and other partners celebrated the opening of the Tropical Parkway connector to Interstate 15 and the Las Vegas Beltway. The stretch of road will make access easier for distribution centers for Amazon, Sephora and other companies moving into an 1,100-acre industrial area rising near the Las Vegas Motor Speedway. (K.M. Cannon/Las Vegas Review-Journal)
Bighorn sheep with West Temple in background at Zion National Park
A bighorn sheep walks through Zion National Park (National Park Service)
Adult Superstore location closes after 45 years
The Adult Superstore on Main Street has closed its doors for good after 45 years. The shop, which offered a multitude of adult toys, novelty items and movies, opened in 1973. Four other locations remain open. A note on the front door tells customers, “We can’t fully express our sorrow.” Adult Superstore was awarded Best of Las Vegas adult store by the Review-Journal in 2016 and 2017 .
Funeral held for Las Vegas corrections officer
Department of Public Safety Correctional Officer Kyle Eng died July 19 after a fight with an inmate at the Las Vegas Jail. A funeral was held for Eng at Canyon Ridge Christian Church Monday, July 30, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
What Back-To-School Shopping Is Like For a CCSD Parent and Teacher
Laura LeBowsky, a CCSD special education teacher and mother of two, set out to shop for her children's supply lists at her local Walmart and Target. She was looking for deals to try to keep the total under $150, while also allowing Chloe, 8, and Brady, 6, some choice in what they wanted. (Madelyn Reese/ Las Vegas Review-Journal) @MadelynGReese
Businesses struggle to fill food manufacturing jobs
Chelten House is a family-owned food manufacturing company from New Jersey. They created a facility in Vegas five years ago and have struggled to find experienced workers in the area. (Marcus Villagran/Las Vegas Review-Journal)
LeBron heckler crosses line, altercation erupts
NBA superstar LeBron James, his wife, Savannah, and daughter Zhuri were at Liberty High School to watch Bronny James in action Wednesday night. But an unruly fan wearing a Michael Jordan Chicago Bulls jersey heckled the newest Los Angeles Laker. The man screamed at event security with LeBron and his family about 150 feet away. The man had to be restrained, triggering a brief altercation with security. James and his family were escorted out a side door along with Bronny's team, the North Coast Blue Chips. Event officials canceled the game between the Blue Chips and Nike Meanstreets.
Las Vegas Oddities Shop in Downtown Las Vegas
Las Vegas Oddities shop owner Vanessa VanAlstyne describes what's for sale in one of the weirder and wackier stores in Downtown Las Vegas. The store opened less than a year ago and carries everything from human bones to "rogue" taxidermy to Victorian death photography. (Madelyn Reese/ Las Vegas Review-Journal)
News Headlines
Add Event
Home Front Page Footer Listing
You May Like

You May Like