Nevada Gov. Steve Sisolak speaks during a news conference at the Sawyer State Building in Las Vegas,Tuesday, March 17, 2020. Sisolak ordered a monthlong closure of casinos and other non-essential businesses in order to stem the spread of the new coronavirus (COVID-19).
Published Friday, April 3, 2020 | 2:46 p.m.
Updated Friday, April 3, 2020 | 4:44 p.m.
Gov. Steve Sisolak has notified directors of agencies throughout the state to begin looking for ways to reduce their budgets in the “new, unimaginable reality” caused by the coronavirus pandemic.
Sisolak said the state would not order an “arbitrary across-the-board cut” but review the budget with an eye toward conserving resources.
“Not unlike every other Nevadan or small business impacted by this economic reality, the state needs to begin the process of looking at its own budget and making hard, thoughtful decisions,” Sisolak said in a statement. “Nevadans have overcome many obstacles in recent years, and I am confident we can all make it through this together and lead our economy and our state back from these challenging times.”
The memo shows Sisolak is preparing for a 4% budget cut in Fiscal Year 2020, with a 6% to 14% cut in Fiscal Year 2021. Departments have until the close of April 13 to make their budget recommendations. In some of the state’s more well-funded agencies, those cuts could save millions. For example, a 4% cut to the Department of Health and Human Services is almost $54 million, while a 14% cut, the maximum projected in Fiscal Year 2021, comes out to around $204.4 million.
Marvin Leavitt, a member of the state’s Economic Forum, projects the country will “probably” be a recession at the end of the pandemic.
“The main thing is the unknown. No one knows how long this is going to last,” Leavitt said. “I suppose the next questions is depending on how long it lasts, how large is the rebound going to be once it’s over?”
Lawmakers and officials said earlier this month that the total impact of the pandemic on the state’s budget was unknown, but projections showed around $2.2 million a day in revenue going to the state from the Las Vegas Strip alone. There has been no public call for a special legislative session from either the governor or legislative leadership to tackle any potential budget problems.
The state has around $400 million in its rainy day fund, a healthy amount compared with some past years, though it remains to be seen if that number will be enough.
Sisolak said the pandemic would undoubtedly cause tough budget decisions in the state.
“With the near total shutdown of businesses during the COVID-19 response, including the gaming industry that makes up the lifeblood of our state’s economy, it is inevitable that this unexpected drop in revenue will force Nevada to make tough budget choices in order to continue protecting the health and safety of our citizens,” he said.
