Clark County, facing economic slowdown, to plug $56M budget deficit

Clark County commissioners voted to dip into a fund for capital projects to close a projected $56 million general fund budget deficit through June 2026 as the county struggles to maintain services in the face of declining sales tax revenues and an economic slowdown.

Commissioners voted during a special meeting Monday to affirm a $2.1 billion operational budget for fiscal year 2026, which begins July 1. The proposed budget had a structural deficit of nearly $28 million, on top of a $26 million shortfall expected for the current fiscal year, which ends June 30.

The county is closing the gaps with a one-time transfer of $56 million that had been budgeted for capital projects. The county didn’t indicate which proposals are going to be effected.

The drop in sales tax revenue comes as the number of building permits issued and deeds recorded fell compared with 2024, county Chief Financial Officer Jessica Colvin said.

“We are starting to see that slowdown in the economy,” Colvin told the commissioners.

The deadline to submit a balanced budget to Nevada is June. 1.

Colvin stressed that the figures discussed Monday don’t account for possible changes to state or federal funding and that future action might be needed if there are further reductions in county revenue.

“Any of those impacts would further increase this deficit,” she said.

Pausing the capital projects “allows you more flexibility in keeping your operating appropriations intact,” Colvin said. “But if we see revenues declining further than what we budgeted, we will be coming back to you with further recommendations on cost containment.”

Next steps would include delaying current projects and then tapping into reserves, she said.

“These are all one-time, short fixes … where it would help us weather a storm,” Colvin added.

Discretionary spending cuts would follow “before really looking at the last resort,” which would include reducing mandated services, she said.

Sales taxes — also known as the consolidated tax — will fund about 43 percent of the $2.1 billion budget, followed by property taxes at 38.6 percent.

Colvin said the “C-Tax” is the most volatile, and that it’s currently down 6 percent year to date.

The consolidated tax raised $587 million in fiscal year 2024 and was projected to raise $558 million this year and $568 million fiscal year 2026, according to the county.

Nevada’s Department of Taxation changed how it distributes C-tax revenues in November, leading to a nearly 47 percent reduction that month in Clark County, year-to-date, Colvin said.

“In the last memo we just received late last week, the state has said this is a broader economic decline,” she said. “It is not a result of a timing difference or that they haven’t submitted any type of distribution to the jurisdictions.”

Visitation numbers were down between 0.5 percent and 2.1 percent each of the first three months of 2025, compared with 2024, according to the county.

The cities of Las Vegas and North Las Vegas also will discuss their 2026 budgets this week.

Contact Ricardo Torres-Cortez at [email protected].