LAS VEGAS (FOX5) -- Ahead of the Nevada Legislative Special Session on Wednesday, Gov. Steve Sisolak released his Fiscal Year 2021 budget proposal.
Gov. Sisolak said the total estimated shortfall of the General Fund is about $1.2 billion in Fiscal Year 2020-21.
The report calls for “deep cuts in services and proposals” and says budget balancing efforts addressed in the Legislature’s upcoming special session will not include passing any new taxes.
“Considering any new revenue streams would require substantial time to setup, administer, and implement, they are not viable as an immediate option to address this emergency situation,” the report said.
The Legislature, however, may consider “augmenting existing major revenue sources” by raising taxes.
“If the legislature is able to move a revenue package forward, with the two-thirds vote required, the Governor is willing to consider the legislation,” the report said.
Nevada levies no state income tax on its residents. The state funds most of its budget with tax revenue from the gambling and hospitality industries, both of which are highly susceptible to economic booms and busts.
The news presents a setback for labor unions representing state workers and teachers, who have clamored for the state to diversify its revenue streams rather than make cuts since the onset of the pandemic.
Instead, the report says, “the actions proposed to address the current shortfall are similar to the actions taken by the State during prior recessions in Nevada.”
The document (read in full below) includes information of the economy prior to the pandemic and details the timeframe for COVID-19 response.
According to the report, visitor volume for the Las Vegas area was down 95.9% in May, compared to a 90.8% occupancy rate the prior year. In April, it was down 97.3%.
The report noted the highest point of statewide unemployment, 30.1%.
Gov. Sisolak included a list of notable proposals submitted to the legislature:
- Over $500 million in reductions to agency budgets
- Reductions in one-time appropriations
- Reversions from the IFC restricted contingency funds
- Transfers from other funds to the State’s general fund
- Furlough days for state employees in the fiscal year, and holding open more than 690 state employee vacancies
- A tax amnesty program
- Acceleration of net proceeds of minerals
"A total of $190.6 million has been identified for reduction within [Nevada System of Higher Education], including reduced operating costs, not filling vacancies and repurposing capital funds. Furloughs are also included for NSHE academic and administrative faculty," the report states.
The K-12 funding was detailed as such:
- Nevada Department of Education – approximately $10 million
- K-12 Categorical Funding – A reduction of approximately $156 million from the $711 million in legislative approved categorical funding for FY 2020-21, including:
- Class size reduction (approximately $6 million out of the $165 million legislatively approved for FY 2020-21 for class size reduction, in addition to an estimated $12 million balanced forward from the prior fiscal year)
- Read by Grade 3 (approximately $31 million)
- Funding for the New Nevada Education Funding Plan (approximately $70 million)
- Teacher school supply reimbursement funding ($4.5 million)
- Reductions to certain teacher incentives, college and career readiness programs, school safety, financial literacy and other categorical programs (approximately $29 million)
- • One-time appropriations from the 2019 Legislative Session, including:
- SB 458 – School Gardens ($205,000)
- AB 235 - Grants for Mentorship Programs ($25,000)
- SB 551 – School Safety: Facility Improvements ($8,404,930)
READ THE FULL DOCUMENT
The Associated Press contributed to this report.