FILE - In this March 17, 2020, file photo, people wait in line for help with unemployment benefits at the One-Stop Career Center in Las Vegas. Nevada is fast-tracking the hiring of temporary unemployment office workers to deal with a wave of benefits claims that followed the mid-March closure of casinos and other businesses in response to the coronavirus pandemic. Gov. Steve Sisolak said Monday, May 11, 2020, that letting the state Department of Employment, Training and Rehabilitation hire contractors and rehire retirees or former employees to process claims alongside regular state workers should help get insurance benefits more quickly to more out-of-work Nevadans.
Gov. Steve Sisolak on Monday declared a state of fiscal emergency, saying the pandemic that forced him to shut down most of the economy has crippled the state’s revenue stream.
That action will give him and
the Legislative Interim Finance Committee access to Nevada’s Rainy Day Fund,
which now contains just about $401 million.
But Sisolak still hasn’t called
for a special session of the Legislature.
“I will continue to work
closely with our partners in the legislative branch on these decisions,
including the timing of a potential special session,” he said in a statement.
He said they knew the state
would face a serious revenue shortfall because of the closure of Nevada
businesses including the gaming industry.
He said estimates by the governor’s
finance office and the legislative fiscal division project a shortfall between
$741 million and $911 million this fiscal year which ends June 30, less than
two months from now. He said because of that shortfall, “the state is now in a
position where we will be forced to make very difficult decisions.”
“I’m glad the governor
declared a fiscal emergency,” said Sen. Ben Kieckhefer, R-Reno. “We’re in one.”
Sisolak asked state agencies
for 4 percent budget cuts that would total about $172 million.
“He asked those a month ago,”
said Kieckhefer, the senior member and former chairman of the Senate Finance Committee.
“He has not yet done anything to act on them. He hasn’t done anything to
Kieckhefer said in addition
to the Rainy Day Fund, the state has a projected $160 million or so surplus in
the General Fund above the mandatory 5 percent Ending Fund Balance in the
treasury. That too, he said, will go away. He said the state can also get some
funding by cancelling certain capital improvement projects and other one-shot
A big chunk of that estimated
shortfall is the loss in local revenue to the Distributive School Account that
pays for K-12 education. That revenue depends heavily on sales taxes just as
the state General Fund does. The point there is that state statute requires the
state to make up any shortfalls in the Local School Support Tax and other
school district revenues.
“We’re required to make them
whole,” said Kieckhefer.
One temporary solution, he
said, would be to move fiscal 2021 school funding back to cover this fiscal
But he said that would create
a much larger hole in the fiscal year starting July 1.
“Transfer the DSA money,
spend down the Ending Fund Balance and the Rainy Day Funds and we’re still in
the red,” he said. “We’re still about $80 million below the 5 percent Ending
He said the governor may be
able to avoid a special legislative session in the six weeks or so left in this
fiscal year but that he can’t possibly avoid in the coming fiscal year.
And most importantly, he said
the governor and his administration have to act now.
“The problem is real and they
need to take some actual action to address it,” he said. “We can’t analyze this
forever; we’re on the clock.”