Cathleen Allison/Nevada Appeal
Published Friday, Jan. 22, 2010 | 9:37 a.m.
Updated Friday, Jan. 22, 2010 | 6:54 p.m.
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.