Nevada's budget is out of balance for the rest of this fiscal year and for the next two-year budget cycle.
Gov. Jim Gibbons and his staff will have to trim several million dollars out of the proposed budget to make it fit within projected revenues.
Unanticipated expenses added $2.87 million to this year's budget, which pushes total general fund spending $1.2 million over the statutory cap. And the proposed budget for the coming two-year cycle is $2.78 million more than the Economic Forum says the state will get in tax revenue.
Budget Director Andrew Clinger told the Assembly Ways and Means Committee on Monday he would have recommendations on where to cut to cover those amendments by the end of the week.
"You gotta take it from somewhere," said Ways and Means Chairman Morse Arberry, D-Las Vegas.
But Clinger said those numbers don't include any reduction in projected revenue totals the Economic Forum will make when it meets May 1 - potentially a much bigger number.
With sales tax collections in a slump, experts say the forum could reduce revenue projections by as much as $50 million, forcing the governor and lawmakers to cut that much more out of the executive budget.
Assembly Fiscal Analyst Mark Stevens advised the committee they need to get a handle on what the forum might cut from expected revenue totals because there will only be a month left in the session after the forum makes its decision - not much time to make major budget changes.
He asked whether the committee wanted them to make preliminary projections "so we're prepared to act very quickly after May 1 when the Economic Forum meets."
Arberry said Stevens, Clinger and other fiscal experts should do that within the next two weeks "because I have no intention to be here for a special session."
Total spending for this budget cycle was about $1.66 million below the statutory cap before those last minute adjustments. The majority came in just two budget amendments: A $1.49 million supplemental appropriation to fund 748 additional teacher signing bonuses and $1.17 million to cover cost overruns in the Department of Corrections from increased utility costs and the growth of the inmate population. The prisons now hold hundreds more inmates than the state budgeted for two years ago.
For the 2008-09 budget, more than half the $7.28 million in budget adjustments was caused by errors in calculating projected attorney general's office costs to agencies in the Department of Business and Industry. Altogether, the state general fund cost was understated by $3.96 million in those budgets.
Most of the remaining $3.32 million - $1.92 million - happened when Gibbons removed proposed fee increases from the Health Division budgets. That forced an increase in general fund money going to that budget.
Clinger said he would work with LCB fiscal staff to "at least come up with a number my office and our staff are comfortable with."
Speaker Barbara Buckley, D-Las Vegas, said then the administration can "provide us the list where you see the cuts, what you would recommend."
The statutory cap was enacted in 1979 and limits the growth of general fund spending in Nevada to population plus the rate of inflation.
The state has grown so fast over the past 20 years that the state has never reached the cap until this fiscal year.
Are made by the Economic Forum, a panel of appointed, private-sector financial experts created a dozen years ago to bring order and logic to the process of estimating state revenues to use in building the biennial budget.
By the numbers
Budget cap for 2005-2007: $6.025 billion
Actual spending with amendments: $6.026 billion
Amount spending exceeds the cap: $1.2 million
Budget cap for 2007-2009: $7.064 billion
Economic Forum revenue projection: $6.92 billion
Amount amended budget exceeds projected revenues: $2.78 million
• Contact reporter Geoff Dornan at email@example.com or 687-8750.