Gov. Steve Sisolak says the Economic Forum’s revenue projections are, “a sober reminder of the devastating impacts COVID-19 has caused in our state.”
“This global pandemic has created both a fiscal and economic crisis in our state,” he said.
The forum, a panel of professional business leaders, projects General Fund revenues ahead of the budget cycle. Those projections must be used in developing the state budget.
Thursday’s forum projections came in at a total of $8.5 billion for the coming biennium. That is $1 billion less than the total projected and used by Sisolak and the Legislature to build the current two-year budget.
He said his finance office and agencies will continue the challenging task of preparing an executive budget, “based on our new fiscal reality with the goal of preserving vital services as we plan for a post-COVID future.”
In November, his finance director, Susan Brown, sent executive branch directors and agency heads a memo ordering them to prepare for budget cuts of up to 12 percent for each year of the upcoming budget cycle. Those proposed “reserves” will allow the finance office the ability to consider options for budget reductions.
In a special legislative session in July, immediate one-time funding decisions to mitigate the economic impact included sweeping $400 million out of the Rainy Day Fund, $49 million from one-time appropriations that had not yet been committed and $72.6 million from the planning, construction and maintenance budget including elimination of the UNLV Engineering School building.
The total projected General Fund shortfall was estimated at $1.2 billion at the time.
The largest part of that is the $535 million in cuts to agency budgets.
They gained millions more by ordering mining companies to pay two years of net proceeds taxes this year, prepaying next year’s tax, and sweeping all of the state’s share of the Governmental Services Tax into the General Fund. The General Fund normally gets just 25 percent of that levy.
Those changes, however, were reductions in spending within the current budget, not the upcoming 2022-23 budget.
The executive branch is now building that proposed budget.