State budget deficit at $161 million by end of next June, will grow larger

UPDATED, 1 PM: Gov. Brian Sandoval sent out a statement after his team presented the grim picture to lawmakers. It used some of the same verbiage he has previously brandished about revenue not keeping pace with growth and having to look to new sources. This ain't subtle, nor is it rocket science, folks: Ask for savings (remember Kenny Guinn's "fundamental review" of state government, then lament that it's not enough, propose taxes.

This time, like last time (2003), the need is real; it's just the choreography that needs to be better.

The statement:

 Governor Brian Sandoval issued the following statement today after the Interim Finance Committee budget presentation on the FY15 ending fund balance. During a presentation made by the Office of the Governor and the Department of Administration it was announced that there is currently a projected shortfall in meeting a five percent ending fund balance for FY15. The shortfall is caused by actual revenue numbers not meeting the projected forecasts of the Economic Forum, specifically gaming and net proceeds revenues, as well as a significant increase in the student population in the Clark County School District.


“Our economy continues to show steady signs of solid improvement, unemployment is at its lowest point since the recession and we are seeing quality, sustainable job creation across the state. However, today’s numbers indicate that our revenue streams are not on pace with population growth and the mandatory resources needed to support that growth. I have instructed my Cabinet to continue to look for monetary savings within their existing budgets as we begin to close out the FY15 budget. As my office continues building the budget for the next biennium, we must continue to look beyond our traditional revenue sources, which are not recovering at the same pace as the rest of our economy, toward funding mechanisms that compare and complement the growth of our changing economy,” said Governor Brian Sandoval.



The budget hole is $161 million for fiscal 2015, mostly because of increasing school enrollments, and will surely grow in the coming biennium, state lawmakers were told Monday.

Gubernatorial Chief of Staff Mike Willden and budget director Julia Teska presented a stark picture of how the state's recovery from the recession has boosted mandatory spending but not a concomitant increase in revenues. They outlined, in a pair of documents you will see linked below,  that the state has a gaping budget hole that Gov. Brian Sandoval, known to be contemplating a tax package, and lawmakers must fill.

The bottom line, so to speak: The administration plans a series of gimmicks, including the biennial stunt of "sweeping" reserve funds, to fill the short-term gap. But, as Teska put it, "There araen't a lot of wells to go to without deeply affecting your citizens."

This is the reality the Gang of 63 will confront Feb. 2 when the session opens, even though a GOP Deniers Caucus exists. Only one newcomer, GOP Assemblyman Chris Edwards, asked a question during the hearing and that was to cast doubt on the numbers.

Others were mute, perhaps stunned into silence or wondering why Speaker-for-the-Moment John Hambrick, who was there but asked no questions, or Majority-Leader-for-the-Moment Michele Fiore didn't tell them the harsh truth. (To be fair, Hambrick seems to understand the hole and has said he will vote for education funding taxes.)

As for the no-tax pledge signers, I wonder if they realize how short-sighted they were. Actually, I don't wonder.

But now that the math behind the initial hole is out there, perhaps the GOP Deniers Caucus will stop digging.