LAS VEGAS (KTNV) — An economic slowdown is leading to some jurisdictions making adjustments to their annual budgets.
On Monday, Clark County Commissioners reviewed the county's tentative budget for Fiscal Year 2026.
WATCH FULL CLARK COUNTY BUDGET HEARING
When looking at county documents, it shows that for FY 2026, the county is facing a structural deficit of $27.8 million. According to Jessica Colvin, the county's Chief Financial Officer, the structural deficit will be funded through a one-time transfer of capital funds that would have otherwise been allocated at the end of FY 2026.
"What this means is we really are going to be relying on either revenues increasing at a larger pace than what we budgeted for FY 2026 or that we will see a bigger recovery in FY 2027 to help pay for the operating expenditures that we budgeted today in addition to cost escalators that we're going to expect in FY 2027," Colvin explained. "If we see revenues declining further than what we budgeted, we will be coming back to you with further recommendations on cost containment."
Colvin said an economic slowdown is leading to less revenue when it comes to things like consolidated taxes.
"Currently, we're 6% below the same period last year. Prior to the pandemic, C-Tax collections were traditionally, or on average, a 6% increase year-over-year. So a 6% decline is significant and, honestly, trending worse than the pandemic experience," Colvin said. "The state says this is a broader economic decline. It is not a result of a timing difference or that they haven't submitted any type of distribution to the jurisdictions."
For example, Fiscal Year 2025 C-Tax revenues are trending $56 million below budget.
"This shortfall, we are absorbing this through one-time capital expenditures that would have been allocated at the end of Fiscal Year 2025," Colvin said. "So we're not canceling a project. It's just less capital that we will be submitting to you for allocation this summer."
According to the presentation, another thing that is costing more money is the Clark County Fire Service District.
"The budgeted suppression, FY 26, budget for suppression costs is $188 million. So right now, we're structurally imbalanced. We're not bringing in enough revenue from the Fire Service District to cover the cost of fire suppression. Obviously, the decline in C-Tax revenues is causing some of that," Colvin explained. "The other cause, though, is we needed to transfer $10 million over to fire prevention. So we will be coming back to you in the coming months with a change in the fee structure in our fire prevention bureau to help mitigate that subsidy."
Right now, county officials are also keeping a close eye on what's happening at the state legislature.
"We are experiencing about $19 million in fiscal impacts so far. So hopefully, that gets reduced further as we get closer to the end of the session," Colvin said. "There is somewhat an offset but not directly. AB 475 does provide $18 million in rental assistance to the county. That's still out there but it's not a direct offset to these other fiscal impacts because, obviously, AB 475 can only be used for rental assistance. The bills that are causing the largest amount of fiscal impacts to the county are going to be in health benefits, workers' comp, and there are a couple of election bills as well."
Colvin says the county will file its final budget on June 1, 2025. They will also be evaluating the legislative impacts.
"Over the summer and fall, we'll be monitoring revenue and expenditure trends and we will recommend further cost containment if cost containment are not meeting budget expectations."
You can see the full presentation below.