State’s revenue shortfall increases

CARSON CITY — Nevada lawmakers struggling with the state budget learned Wednesday that an anticipated revenue shortfall could approach $3 billion when the Economic Forum releases its next projection on May 1.

Assembly Speaker Barbara Buckley, D-Las Vegas, said revenues for the next two fiscal years may be down by 37 percent to 39 percent compared with what they are for the current biennium.

Legislative staffers, crunching numbers based on the latest sales tax and gambling revenue reports which show a continued a downward spiral, gave Senate and Assembly budget committees the latest shortfall estimate. That's up $400 million to $500 million from earlier estimates.

"There's no doubt that our state is in serious trouble," said Buckley. "We are not going to be able to restore everything. We just can't."

"It's obvious that our state is the worst-hit in the nation. We may have a 37 percent reduction in revenue, but our schools still have to operate. Our prisons still have to operate."

Lawmakers have been working over the past two weeks to set priorities for restoring some of Gov. Jim Gibbons' proposed budget cuts, compiling a list of "add-backs" that include items such as keeping rural mental health clinics open and ensuring continued treatment benefits to children with autism.

The legislative leaders missed a Monday deadline in their efforts to revamp Gibbons' proposed $6.2 billion, two-year budget plan, but said they've made substantial progress identifying priorities and hope to have a final budget target in a few days.

"I think we're kidding ourselves if we think this recession is going to be short-lived," said Sen. Bill Raggio, R-Reno. "We may be creating an even bigger hole for the next Legislature, so we need to be prudent about what we decide."

Senate Taxation Chairman Bob Coffin, D-Las Vegas, said that his priority would be to ensure continued health benefits to state employees and retirees; and Assemblywoman Sheila Leslie, D-Reno, added that lawmakers value the current and former employees' service to the state.

"Don't give up hope," Leslie said. "We are going to find a solution ... and not balance the budget on the backs of state workers. I promise you."

The reassurances came even as lawmakers acknowledged that economic conditions are declining at such a rate that all the priorities they set in recent days may have to be reviewed when the final revenue projections are released in May.

During the budget committee meeting, the panel reviewed the governor's proposal to eliminate 32 positions at the Nevada Gaming Control Board, for a general fund savings of about $4.5 million over two years. GCB Chairman Dennis Neilander said those positions were vital to the state's ability to collect unpaid fees to the state.

Panel members agreed that it would be a priority to add back 14 of the 32 positions, if they were able to find the additional $2 million. Neilander also said that he has continued to see a large decrease in the number of tourists coming to Las Vegas.

"We had hoped that in '09 we would at least see a flattening on the revenue side," Neilander said. "We have not seen that yet. The numbers continue to spiral downward."

The panel also reviewed the governor's proposal to close the state Office of Consumer Health Assistance, which helps Nevadans work through problems with health insurance. Members agreed to try to restore seven positions and keep the office open.

"They do so much with so little," Buckley said. "These positions are needed, like in gaming control, but we're slicing everything."

Joint subcommittees will meet again Thursday morning to discuss outstanding budget decisions.