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StumbleState budget comes up $800 million short
Forecasters say locals gaming market to take hit in 2010
Cathleen Allison/Nevada Appeal
Economic Forum Chairman John Restrepo listens to gloomy forecasts for the Nevada economy during a January 2010 hearing at the Legislature.
Published Friday, Jan. 22, 2010 | 9:37 a.m.
Updated Friday, Jan. 22, 2010 | 6:54 p.m.
Gov. Jim Gibbons
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The Economic Forum has completed its revenue outlook, setting the table for the governor and Legislature to attempt to cut more than $800 million from the state's current budget.
The Economic Forum, a group of five business leaders, re-projected the state's tax revenue today and determined the shortfall is $580 million. Additionally, the state guarantees that it will provide a certain amount to school districts. That number has been calculated at about $230 million, although the state budget office doesn't expect to have an exact figure until next week.
Gov. Jim Gibbons is expected to announce the date of a special session on Monday. The date is expected to be in late February.
There has been little appetite to raise taxes, even among some of the most liberal members of the Legislature. But cutting that much from the budget will be no easy task.
Earlier in the afternoon, the Economic Forum took the gloomiest outlook presented to it, predicting that the major gaming tax would come in $117 million below its May forecast.
Economic Forum members predicted the Strip would come back somewhat, but the tax numbers would be held down by the locals casino market. Overall, the Economic Forum predicted the gaming tax would decrease by 2.4 percent in fiscal year 2010 and decrease another 0.6 percent in 2011.
Bill Hartman, an Economic Forum member and a CPA, said he believes residual construction projects propped up the locals casino market in 2009.
"I'm very concerned about the locals market in Southern Nevada," he said. "2010 will be a substantially worse year than 2009 was in the locals casino market."
He noted that, so far, public employees have been relatively immune from the recession. With counties, cities and school districts looking for more cuts, more locals casino patrons will be impacted.
"We're probably going to see a combination of fewer employees and employees making less."
Gov. Jim Gibbons called the special meeting of the Economic Forum because tax revenues have been below what the group predicted on May 1.
Under state law, the group's May projection determined how much the Legislature could spend.
Gibbons' staff has said it's all but certain he will call the state's 63 part-time legislators back to Carson City to address the budget deficit.
Bill Anderson, chief economist of the Department of Employment, Training and Rehabilitation, began the presentation with a dim outlook of employment figures.
He said the department's model shows continued job loss through 2010 and 2011, with only a slight increase in 2012.
He predicted that Nevada will lose about half of the 400,000 jobs created over the last 10 years.
"This is an unprecedented time in Nevada's history," Anderson said. "Recovery, when it does unfold, is going to be relatively slow and choppy."
He described a new reality for Nevada's economy. He said he never expects in his lifetime a repeat of what Nevada saw during the recent boom.
"I don't like to say we'll have a downsized economy, but we'll grow at a more modest and moderate pace. But on the flip side, maybe it'll be more sustainable."
Jeff Hardcastle, the state demographer, tried to lay out the population outlook. He admitted he couldn't give a good answer now. Under one model, the state would lose 100,000 people between today and 2015. Under a more optimistic one, the state would gain about 116,000 people.
Experts have predicted a shortfall between $400 million to $600 million or higher. A 10 percent across-the-board cut to the state's budget, if implemented on March 1, would equal about $436 million.
The meeting started this morning with John Restrepo, an economist, elected chairman.
The five members will hear reports on the employment outlook, the population outlook, taxes and past accuracy of predictions before the group starts setting specific predictions.
Discussion: comments so far…
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"Experts have predicted a shortfall between $400 million to $600 million or higher."
Which experts? Where has this been reported with actual names and data to support this? Just last week the Sun reported that Gibbons Deputy Chief of Staff "Woodbury told the legislative committee that the shortfall between tax projections and actual revenues is projected to total $300 million to $450 million between now and June 2011." now a week later the shortfall has increased 100%?
Is Gibbons' staff the 'expert' source for this information or is it actually based on something?
TheFacts
Good question. These are sources from both the Legislature and administration. Legislature is generally being pretty pessimistic. The folks don't want to be named yet, but all this will come out shortly. It's important to note that what the staff says doesn't matter. What matters is the consensus reached by the five members of the Economic Forum. That will be the "official" hole in the budget.
Dave Schwartz
Restrepo is an economist? How so? He is owns a real estate research company....and even that data is flawed. How is H_LL is he the chairman?
It is funny that the legislature just wants the Gov. to do the 10% cuts.
I guess they are running from this issue as fast they can.
Absolutely there is no leadership there.
A 10% cut is a significant shortfall.
The legislature is suppose to pass the budget.
Not the governor.
The IFC is not a legal constitutional body either. It is not the legislature.
I guess the Gov is going to force them come to a session kicking and screaming. They do not want to get their hands dirty.
Is this the committee of experts who's projections have been repeatedly waaay off???
@SgtRock I don't think the Legislature wants a flat 10 percent cut. I just included that as a way to give some perspective.
Ralston had some suggestions from Speaker Buckley from earlier this month: http://www.lasvegassun.com/blogs/ralston...
It will be interesting to see if, after the Economic Forum, Legislators still don't think they need to come back to Carson City.
@AgMallard In answer to your question, yes.
Looks like a lot of people are running from las vegas! Population is going way down and Vegas is looking to become a ghost town. Flock to Utah where the jobs are good!
How many of those created jobs over the past ten years are construction? It doesn't take a rocket scientist to be able to conclude that job losses in Nevada are directly in response to overdevelopment the very thing that artificially inflated our state economy to begin with. We should all hope that we don't see a repeat of the past decade's economic boom, because this is what has put us in dire straights. Normal development in an even pace with economic expansion and diversity is all we can work towards and expect our elected officials to focus on.
WOW! really... I think at this point this stuff is being made up...
For those of you that post on the UNLV boards I think we have discovered the true identity of SoccerFan its Bill Anderson...Grand standing with no real substance...
Where do they come up with these numbers...
Vegas is being primed for real economic growth... Not just casinos... Cheap Cost of living + Cheap Commercial space + Good Corporate breaks = Businesses wanting to eventually relocate... If anything now is a time to invest in the infrastructure of the valley, make it even more desirable... We are becoming the economic equivalent of a foreclosure, too cheap to pass up... look at what Icahn just did, you think a guy who makes his living on predicting the economic outcome of any place he invests in bets on long shots...
My point is that the legislature controls the budget not the governor.
The process is not the speaker or a small group of legislature members giving advice to the gov and then the gov goes out cuts the budget, add revenues or borrow money.
The process is that the governor gives a suggested budget to the legislature. The full legislature (not the IFC) is suppose to then generate laws to enact their version of the budget. The governor then enforces the budget laws.
Calling a session is the proper action to do with a 10% shortfall.
It is not nickel and dimes stuff.
My representatives should have a say on such a matter and not an oligarcy of a unconstitutional committee.
Thats what you get when you send jobs away from Nevada. Way to go LIBS/Progressives!
Damn dirty PUBS
Chickenlittle :
Your optimistic comment is most reassuring, and I agree that the valley is to cheap to pass up at the moment, however we are lacking in the talent department of our elected so called leaders to even present this package in an intelligent manner to outside business leaders. Once we get rid of the status quo, and get some independent thinkers in the mix, you might see some movement in the right direction. Right now our elected officials are all shell shocked.
SO where do the "Brains" (economists, etc) of the financial markets come up with the idea that things are getting better?
One easy way to save money is to stop this "prevailing wage" nonsense that we have here in Nevada. By allowing real competitive bidding on major projects, Union and non-Union, we could stimulate construction jobs, as well as the development of newer buildings.
After the City Center debacle, nobody here is going to want to confront the Union loafers, their ridiculous work rules, their abusive business agents, and the noontime drunks again.
Development will simply go elsewhere, like Texas and Louisiana. You'll make less money, but at least you'll be working. Get the UHaul, loafers.
So, another special session on the horizon worse than the last. Great. Whatever the numbers say, double, cause thats usually what happens. Time to start cutting jobs, cause pay has already been cut to the bone. Unemployment here will be even more ridiculous than it is now after the session.
Makes a lottery option look a lot better by the day. Put it on the ballot for a vote and see how it comes out.
And, wondering if they factored in the 90,000 jobs to build the mag-lev to Dizzyland Gried has promised? heh heh heh...
"....public employees have been relatively immune from the recession."
Relatively immune? UNLV alone lost an estimated 400 faculty and staff. There are indeed fewer employees and employees making less on campus with furloughs, diminished health benefits and increased out-of-pocket medical costs. The burden of this recession is shared by ALL Nevada citizens and taxpayers.
The State of Nevada is in desperate need of leaders with vision, capable of leading serious, well informed discussions on diversification, and courageous enough to challenge the status-quo.
My solution is to invade Mexico. We could take all the money back that the illegals sent down there.
Amusing how the "reader poll" omits a CUT TAXES option while 2/3 of the poll has either a "raise" or "higher" tax option.
LOL
Taxation is theft.
: {
Brace yourselves.
This is like almost 20% out of the current state budget, which was already billed as a bare bones proposal that STILL required a tax increase to fund.
A cut this big is going to require a structural change in state Government akin to moving heaven and earth.
This is DIRE.
THERE WILL NEVER, AND I MEAN NEVER, BE ANYTHING EVEN CLOSELY RESEMBLING 'DIVERSIFICATION' IN THIS DRY-HOLE IN THE MIDDLE OF THE NORTHERN MOJAVE DESERT.
Unless we diversify into more whorehouses, gamblin' joints, strip joints, or more free-tax-holiday mining outfits.
This pic above says it all.
All these Politico types are heading for the hills 'cause THEY know the hand writing's on the wall.
They get more reports than you and I will ever get about what is coming and how soon it's gonna get here.
Don't be fooled by the dog-and-pony show act and claims of 'Leadership' and 'Fighting for You' and all the other tripe they stir into this bankrupt political showbiz cesspool.
All of 'em are so tied in with this fiasco that in five years Hollywood's gonna make a poverty movie about us starring these Politico losers as Politico losers 'cause all the work they'll be able to get....
We are in this mess because our dumb governor did nothing to grow the economy or create jobs. Everyone knew this was coming. In fact Buckley last session said we needed to restructure the state's outmoded funding scheme and create new revenue streams. But, surprise, the Legislature didn't follow through! Gibbons must go, and Sandoval would be no better, based on his feeble thoughts trying to out-conservative the gube.
i love how in denial everyone is about this town.
why is it some kind of "sun rises in the east" mantra that "the strip will come back"?
who SAYS?
everyone was saying "vegas is recession proof" and clearly THAT wasn't correct, so why does everyone say "the strip will come back."
i don't think it is. unempoyment ROSE in 34 states last month. someone explain to me how "the strip will come back".
Is it so remarkable that the demorats who forced the budget crisis upon the governor via the veto of his budget for this year have not came forward and say I am sorry to the entire state of Nevada for their misdeeds!
The governor's budget was nixed by the demoratic legislature along with the help of a few RINOs such as Dennis Nolan (R), who happens to be my district's state senator, who by the way, will definitely be on my list of people to vote out of office!
But like I was saying the governor's budget which did take into account a pending fiscal crisis in the United States was sound. However, the demoratic legislature trying to follow the lead of the corrupt and incompetent current leaders of the 111th Congress in the District of Criminals, wrapped our budget in a spend, spend, spend, and then tax, tax and tax agenda!
The last three plus years under the policies of the 110th and 111th demoratic congress, has been an absolute failure! They have been so intent on trying to ridicule President Bush, that they have failed to focus on the real issues facing America!
In addition, the personal agenda of Dirty Harry to not enforce illegal alien infestation into Nevada by not supporting E-Verify is destroying economies of Nevada's from within! We should not allow the hiring of any illegal aliens in this state unless we follow recommendations of the 9/11 Commission which mandate strongly that illegal aliens be eradicated in our nation.
However, Dirty Harry is so intent, as well, as many other liberals in trying to build up a voter base of voters happy to live off the work of others via welfare, section 8 housing, food stamps, etc.
My name is MSgt Jeff DURBIN USAF Ret and I am a candidate for the Clark County Commissioners District F, and I vow that no builders will be granted a permit with my vote unless they comply with E-Verify and hire only legal American tradesmen.
In addition, I will ensure that no, repeat no county contracts be given to any company that does not have an office within the state of Nevada and that does not hire the qualified workers in Nevada.
To spur business growth, I will also set aside all county contracts with a value of $250K or less to only small businesses primarily those owned by disabled veterans & veterans to encourage these people to get involved in the community and to use their skills and knowledge to help the state grow with new ideas, new concepts, new visions!
On a last note, the attempt to dismantle the nuclear waste sites did not at all help this community or state. Therefore, it needs to be revisited as it did bring in a new revenue stream of business catering to that industry and with it, came a cadre of highly capable and professional workers!
Dirty Harry's lack of support for Yucca Mountain was also an indicator of his disdain for the employment opportunities for the citizens of Clark County and Nevada period!
I'm on TEAM BOOKS...let's go south n take back whats ours jobs,money all of the stuff that has been stolen cars,trucks,electronics etc...I say invade them and tax the s... out of them.
"How the Crash will Re-Shape America". The Atlantic, March, 2008. Read it.
Okay, that's a whole bunch of misinformation.
Master Sergeant Jeff Durbin, also known on the Sun's website as "Vorenious" (http://www.reteaparty.com/members/voreni...), and a sworn devotee of the Tea Partiers, says that the Democrats, "forced the budget crisis upon the governor via the veto of his budget."
Hardly, Vorenious, err, Master Sergeant, err, Jeff.
Here's how it works. The Economic Forum, of which Gibbons appoints the majority, estimates the tax revenues and the state government spends via those projections. The projections were wrong. The projections from a panel of five people, three of which are appointed by Jim Gibbons. The reason we have a crisis at all is because Gibbons can't appoint a single competent person to a job. We've seen the revolving door in the Governor's office, the embarrassingly inept management of his relationship with the Legislature and a brazen attempt to circumvent the law with the attempted appointment of a inexperienced crony as a tourism director.
Secondly, given that Gibbons swore "no new taxes" yet allowed the room rate tax to go into effect, after demanding it in his own budget, undermines your entire point. Gibbons was also relying on tax increases for his budget.
Seems the tea party doesn't have a dog in this hunt. You rail against "tax and spend Democrats" but don't address the "borrow and spend republicans." Typical tea partier... wants everything for nothing.
And try to stick to a single screen name, next time.
Master Sergeant Jeff Durbin is a complete brainwashed military leftover. His ideas of limiting bidding to only local contractors is illegal and stupid. Limiting contract awards to veterans and the like is also illegal. E Verify is a federal program, not a state one, so you can't do it willy-nilly.
Wake up, Durbin. You're not in F Troop anymore, you're in the real world.
Maybe you should run for dog catcher...
Yeh, MSgt Jeff DURBIN USAF Ret, dog catcher. Ten Hut, Fido!
All you posters don't know squat.
Here is the solution to your $$ troubles
Get Big Garth Brooks to do 800 $1,000,000 "VIP" (free hot dogs) shows.
Case closed, budget is fixed
I think there are a lot more people to blame here other than just the palitico's left or right.
There was simply a lot of greed by EVERYONE.
but lets not forget the Banksters either...
wait for the state to announce a new tax.yes boys and girls, local and state government need help and dont believe for a minute that they want to cut back on the bureaucracy; they want to add jobs as they got family to feed. they need the phony baloney jobs they got now because they cant hold a real job.what it comes down to is, they are only in it for the money.
People who make minium wage, but live off their tips who work in the gaming business are being starved.
State lottery; legalize the girls and pot. Probably bring in more money spending tourists.
Figure the city gets $50.00 on every ounce sold of marijuana. 150,000,000 in tax revenue, lottery 100 million, girls the sky's the limit.
COMMON SENSE
Now that we have a idea of where we are financially, I have yet to see these political leaders reduce thier salaries by half. And for those that have outside employment, should not receive any money at all for representing the people. When can expect this reduction in work force to take place or do we need another committee to explain again that we are in bad shape. The only statement in this story was that county employees are immune to whats happening and that is a true statement. UMC is so over staffed with supervisors, managers, assistants notice how we shoved it to the university to handle... I say quit procrastinating and CUT.
Supporting data? Good question. Just like the SAGE Commission (Screw All State Employees) came up with comparisons between state employees and the private sector. Hey you idiots, what job in the private sector do you compare a Highway Patrolman to? A Fireman? A Detective? A Game Warden? Maybe you can compare most support staff or physicians, nurses, etc. but you can't cast a wide net over all positions and make these generalizations without some documentation, studies, citations.... Didn't you SAGE folks learn that in college? Or did you go?
The State will always come up short just as the county is short. If you really sat back and looked at what these lunatic liberals spend money on you'd see a trend that they've always supported. America can't afford these lunatics to control any office.
Everyone blames Gibbons, the Democrats are in control, which hold a 28-14 advantage in the Assembly and a 12-9 edge in the Senate, and we wonder why we're broke. Get real; they're just as stupid as Obama and clan. Their infestation into America has slowly desecrated America into massive debt; we're paying for their free loading blood sucking welfare recipients and supporting millions of illegal immigrants that isn't in our budget. They've also sucked trillions upon trillions with their lies and deception about the environment and global warming. Bottom line, liberals are liars and need to be removed from office once and for all, they've destroyed American values and what we're founded upon, they are the problem, not the solution.
The only way to cure this is to remove them from office and let the people run our system, not these career pathological crooked liars that they are.
Make cuts into the welfare programs.
I'm not even going to read this article. WE NEED A STATE LOTTERY for EDUCATION PURPOSES! PAY THE TEACHERS WHAT THEY DESERVE, BUILD NEW SCHOOLS UNTIL WE CAN CATCH UP WITH DEMAND. THESE TEACHERS HAVE MASTER'S DEGREES AND THEIR SALARY IS NOT COMMENSURATE WITH THE EDUCATION THEY BRING TO THE TABLE. I AM NOT A SCHOOL TEACHER, NOT EVEN IN THE FIELD OF EDUCATION, BUT THESE PEOPLE ARE GETTING ROYALLY SCREWED SALARY WISE. WE NEED TO SWITCH THE FIREFIGHTER SALARY WITH THOSE OF SCHOOL TEACHERS. THAT WOULD BE A BETTER RETURN ON INVESTMENT IN MY OPINION!