State budget shortfall now $10 million lower

CARSON CITY -- State government caught a budget break Friday when it was disclosed that the budget shortfall will be $10 million less than earlier estimates.

Because Gov. Jim Gibbons has not yet tapped into a $160 million line of credit as allowed by the Legislature last year, the state does not have to pay $10 million in expected interest on that loan, according to Senate Majority Leader Steven Horsford's staff.

As a result, the $881 million shortfall figure that Gibbons and legislators have been using is down to $871 million.

That reduction, however, won't give much solace to the 236 state employees who so far have been sent layoff notices.

"That number changes by the moment," said Daniel Burns, Gibbons' communications director.

Horsford, D-Las Vegas, has been using the lower figure all week in news releases. Gibbons generally talks about a "nearly $900 million" shortfall.

A $871 million shortfall still represents 20 percent of state spending over the next 16 months and the legislators have no choice but to make those reductions when they go into special session on Feb. 23.

Unlike the federal government, Nevada's state government must maintain balanced budgets under the state constitution.

Horsford on Friday scheduled another meeting of the Legislature's Interim Finance Committee for 9 a.m. Thursday at the Sawyer Building in Las Vegas and Legislative Building in Carson City.

The agenda calls for legislators to discuss the shortfall and propose solutions. Citizens will be given a chance to speak on their proposals.

Burns said Friday the governor and legislators still are working together in an effort to reach a common solution on dealing with the shortfall.

Unless they agree, the special session could linger on for weeks, rather than just a few days as planned.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.