Lawmakers and agency heads were warned Thursday that falling property tax revenues across the state will force a huge reduction in state construction programs for the coming biennium.
Director of Administration Andrew Clinger said the best estimate is that $126 million will have to be cut from the $350 million Capital Improvement Project budget. He and Maud Naroll, chief planner for the budget division, warned that in a worst case scenario, that number could double, effectively wiping out the construction program proposed by Gov. Jim Gibbons.
Naroll said that would leave about $60 million for construction. That is just enough to do the $34 million in maintenance required for state buildings in the coming two years and one critical project.
That project would most likely be the 36-bed Child and Adolescent Hospital in Las Vegas for $24.5 million.
Falling home and property values across the state are resulting in lower tax collections. Treasurer Kate Marshall has projected a 6.5 percent decrease in revenue for 2010 and 3.5 percent less in 2011.
That reduces the amount of bonds the state can issue using its 17-cent share of the property tax " most of which is already committed to existing bonds.
"We're asking all the agencies to look at other obligations and see what can be deferred," said Clinger.
Those other obligations include funding for the Nevada Department of Transportation, currently on the list for $30 million in 2011, water project bonds which totaled $13 million in 2008, the $3 million annual cultural affairs bonding program and Tahoe bonds. He said it might be possible to defer some of those programs for at least two years, making more money available for construction bonding.
The news comes just one week after the Gibbons administration presented a revised CIP budget that removed the $221 million in bonding for Prison 8 and replaced it with several university system construction projects.