Amid cratering tax revenues and businesses shutdowns caused by the COVID-19 pandemic, Nevada lawmakers are preparing to take the procedural step to access more than $400 million in budget reserves by declaring the state to be in a “fiscal emergency.”

The Interim Finance Committee will take up the topic during a scheduled meeting on Wednesday, May 13 — the first step in transferring funds from the “Rainy Day” fund to battered state agency budget accounts that have seen precipitous drops in tax revenues over the last two months. The news was first reported by KLAS 8 News Now.

Committee Vice Chair Joyce Woodhouse, a Democratic state senator, said the interim budget committee’s scheduled vote would only kickstart the process of accessing the reserve budget account and would not yet determine how much to take out, or which state agencies the reserve dollars would be allocated toward.

But Woodhouse predicted the “vast majority” of the $401 million in the Rainy Day budget account would address shortfalls for the current fiscal year, and would likely prioritize vital state services such as health care and K-12 education.

“That’s not going to address the entire shortfall by a longshot,” she said. “But this will get us started, dealing with some of the more pressing issues.”

Nevada lawmakers in the last two legislative sessions took steps to help fund the long-neglected Rainy Day Fund, including transferring some tax dollars from retail marijuana sales to the fund in 2017. 

But accessing the money in the account — officially known as the “Account to Stabilize The Operation of State Government” — requires a few procedural steps. 

First, tax revenues either need to fall more than 5 percent below projected amounts or the governor and Legislature need to jointly declare a “financial emergency” exists. Once that happens, the Board of Examiners — composed of the governor, attorney general and secretary of state — can recommend transferring some amount of reserve dollars to the Interim Finance Committee. 

There, lawmakers on the panel can modify, approve or disapprove the requested transfer as desired. Once approved, the dollars go into the state’s general fund and can be “allocated directly by the Legislature to be used for any other purpose.”

Woodhouse said she didn’t yet know the extent of the state’s budget shortfall, but that it was no secret the nearly two-month-long lockdown has had a devastating effect on state and local tax revenues. 

Financial analyst Jeremy Aguero previously told The Nevada Independent that he expects the state to see a $700 to $900 million decrease in projected revenue for the fiscal year ending on June 30, with the shortfall for the next fiscal year coming somewhere between $1 to $2 billion — both massive chunks of the state’s $9.1 billion budget for the two fiscal years.

Woodhouse said she expected the Board of Examiners to take action very soon to start the transfer of dollars from the Rainy Day Fund. She said she has not talked to Gov. Steve Sisolak about calling a special legislative session and had no idea when one might be called, but said that one might be necessary if the governor calls for cuts beyond the $687 million in possible cuts already identified.