Nevada Legislature faces $191M budget shortfall for 2026-2027

Nevada faces a projected $191 million shortfall for its upcoming two-year budget due to lower-than-expected tax revenues, primarily from sales and business taxes. The downturn is attributed to declining tourism, persistent inflation, slowing wage and real estate growth, and the economic effects of the Trump administration’s global trade tariffs, according to state and independent economists. While some lawmakers and analysts blame federal tariff policies and anticipated federal program cuts for exacerbating the state’s vulnerability, Governor Lombardo’s office asserts that the shortfall is manageable given Nevada’s strong Rainy Day Fund. Lawmakers will likely need to make significant cuts, with many new programs and bills facing elimination, as the legislature has only a month to close the gap before finalizing the budget. The situation is reminiscent of previous economic slowdowns, though experts do not currently foresee a full recession if trade policies change. The Economic Forum’s revised projections have prompted urgent discussions among state officials about how to balance the budget without jeopardizing essential services.