The Economic Forum is set to meet in two days to provide updated state revenue forecasts for the current biennium. In an earlier post, I suggested that the shortfall for the current biennium could approach $400 million. Since then, state revenues have continued to decline and at this point, it would not be surprising if the forecasted shortfall ends up being well in excess of $400 million, possibly even approaching $500 million. With a fiscal hole of that magnitude, and the apparent lack of cooperation between the executive and legislative branches, the upcoming special session threatens to be lengthy, difficult, and fraught with risky political exposure to elected officials gearing up for an election cycle.
On an interesting legal side note, Nevada law requires that the normal forecasts of the Economic Forum (which occur in the December before a regular session and again in May of a regular session) be used in setting the biennial budget. However, the statutes are silent as to whether interim forecasts, such as the upcoming forecast, must be used in a special session to adjust an existing biennial budget. Regardless, both branches used an interim forecast in the summer of 2008, when the Governor called a one-day special session to address budget shortfalls.