Similar to other states, Nevada is experiencing significant revenue shortfalls resulting from the economic impact of the COVID-19 pandemic and emergency measures necessary to mitigate the spread of the virus. The State is anticipating an $812 million shortfall for fiscal year 2020, which includes approximately $265 million in General Funds necessary to address the projected shortfall in the Distributive School Account (DSA).
“The State is making difficult budgetary decisions at this time that are necessary to end Fiscal Year 2020 with a balanced budget following the unexpected impact of a world-wide pandemic,” Gov. Sisolak said. “While Nevada is on the road to recovery and gradually reopening our economy, we are working diligently with our state agencies to identify the reductions necessary for fiscal responsibility while prioritizing the resources necessary to protect the health and safety of Nevada’s residents.”
Last month, Nevada joined other western states to request federal financial support for state and local governments to “preserve core government services like public health, public safety, public education and help people get back to work.” Also in May, the Interim Finance Committee approved moving $401 million to the General Fund from the Account to Stabilize the Operation of State Government, also known as the Rainy Day Fund, to help address the anticipated shortfall.
Working with state agencies to identify options to address the shortfall, the Governor’s Finance Office is proposing $67 million in reductions in state agency operating expenses, as well as $49 million through the reversal of one-time appropriations from the 2019 session that had not yet been expended. These actions have been submitted to the Interim Finance Committee for final approval on Friday to close the budget gap, along with related adjustments to the fund balance.
The Governor’s Office continues to work with state agencies and lawmakers to finalize plans for addressing anticipated shortfalls for Fiscal Year 2021.