With up to $911M shortfall looming, Sisolak declares fiscal state of emergency
CARSON CITY, Nev. — Gov. Steve Sisolak on Monday declared a state of fiscal emergency, saying the coronavirus pandemic that forced him to shut down most of the economy has crippled the state’s revenue stream.
The first-term Democratic governor announced the news via a press release and on social media, stating in part: “The global economic fallout of the COVID-19 pandemic is disrupting commerce and negatively impacting revenues across the country, in other states and in Nevada.”
On March 17, Sisolak ordered mass closures of “non essential” businesses across the state due to the pandemic, including all casinos. This past Saturday, May 9, several industries were allowed to reopen — with several restrictions — under Phase One of the state’s multi-tiered reopening plan.
Casinos, bars, theaters, gyms, spas and several other businesses are not included in Phase One.
Due to the closures and other economic pressures, 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.
According to Monday’s press release, “as expected, the revenues most significantly impacted are gaming and sales tax.”
“With the closure of Nevada businesses, including the gaming industry, that was necessary to protect the health of Nevadans, the drop in revenue is not unexpected and it is significant,” Sisolak said in the release. “While we appreciate the additional assistance from the federal government to help address the immediate funding needs for the public health crisis, the state is now in a position where (it) will be forced to make very difficult decisions.”
Declaring a state of fiscal emergency gives Sisolak and the Legislative Interim Finance Committee access to Nevada’s Rainy Day Fund, which now contains just about $401 million.
Access to those funds, in addition to other potential budget cuts the governor asked state agencies to plan for back on April 6, “are tools the state can utilize to address the shortfalls,” according to the release.
“I will continue to work closely with our partners on the legislative branch on these decisions, including the timing of a potential special section,” Sisolak stated.
Monday’s declaration was expected after state lawmakers scheduled a similar agenda item for a meeting of the Interim Finance Committee set for Wednesday, May 13, according to a Monday story from The Nevada Independent.
According to that story, a fiscal emergency doesn’t require lawmakers or the governor to identify how much of the Rainy Day fund they plan to transfer over to the state’s general budget account. That decision is made by the Board of Examiners — composed of the governor, secretary of state and attorney general — and then can be modified or changed by the Interim Finance Committee.
The Board of Examiners has scheduled a meeting for Thursday, May 14, and the Interim Finance Committee will meet again next week on Monday, May 18, when allocation of budget reserve dollars will likely be decided and approved.
Heather Ashbridge, who started with Nevada State Development Corporation in 2008, previously served in several roles with the organization, including assistant vice president and loan officer. She is based in NSDC’s Reno office.