CARSON CITY -- A special Nevada legislative session scheduled to start Monday was delayed by Gov. Jim Gibbons on Friday as a panel that guides lawmakers' budget decisions delivered a grim estimate of a nearly $1.2 billion revenue shortfall by mid-2009.

The Economic Forum's analysis means that the legislators, who now go into special session next Friday, must cover a possible revenue shortfall of $250 million or more. That's in addition to $914 million in budget reductions the governor and lawmakers already have approved.

The $250 million is far more than the less than $100 million that the lawmakers' fiscal analysts figured was the amount that will determine the legislators' moneysaving decisions at the special session.

The figure approved by the forum also is higher than the $242 million that the governor's budget chief had estimated -- a figure that had been labeled ``utter fantasy'' by Assembly Speaker Barbara Buckley, D-Las Vegas.

``It's utter reality,'' Gibbons spokesman Ben Kieckhefer said following the Economic Forum vote for the even higher figure.

``We believe it to be a realistic view,'' Leo Seevers, the Economic Forum chairman, said of the panel's shortfall estimate, adding, ``We will recover -- but where is the bottom? I for one don't know.''

Cathy Santoro, an MGM Mirage executive serving on the forum, said the panel's conservative revenue projection was warranted because of the state's volatile economy.

``I think all of us have seen business fall off. I think that every one of us here in the state of Nevada, especially from a gaming perspective, are feeling the effects of the economy,'' Santoro said.

Recessionary trends are in play, Santoro said, adding, ``The best thing you can do when they are in play is think smart and move quickly to address them.''

``It is important in a time like this, in a recessionary environment that we clearly, I think, are facing, to be conservative in the view for the future until things stabilize,'' Santoro said.

Gibbons said he's delaying the session to give legislators and his staffers more time to prepare given the worsening shortfall estimate through next June, when the state's current two-year budget cycle ends.

The Economic Forum's projection determines the dollar amount that must be cut from the state budget by lawmakers, in addition to the more than $900 million already slashed from the budget through 4.5 percent agency-by-agency reductions and other steps.

Moneysaving plans likely to be considered by the legislators include a delay in 4 percent cost-of-living pay raises scheduled to take effect July 1 for state workers and educators. That would cover roughly half of the shortfall -- but employee groups are planning a big protest on Friday, when the special session starts.

Lawmakers also could consider budget reductions beyond the 4.5 percent cuts already in place for most state agencies. Gibbons already has asked agencies for plans to reduce spending by up to another 4 percent through mid-2009.

A 4 percent cut would save nearly $100 million more, but would have a big impact on many government agencies. State prisons chief Howard Skolnik said he would have to shut down the 1,000-inmate Nevada State Prison in Carson City by January to achieve a 4 percent budget reduction.

The legislators are certain to vote on use of the state's $267 million rainy-day fund in advance of the 2009 Legislature. Use of that fund already has been approved by key lawmakers and the governor. But to actually tap the fund now, a special-session vote by the full Legislature is necessary.

Other proposals that could be considered include one by MGM Mirage Chief Executive Terry Lanni to increase the state's businesswide payroll tax from 0.06 percent to 0.12 percent. That would generate an estimated $246 million a year for the state.

The legislators also may consider Lt. Gov. Brian Krolicki's ``securitization'' plan that could raise $600 million or more through a one-time bond sale.

The state has faced a series of dismal reports on slumping revenues from major sources, such as casino and sales taxes. Besides the revenue shortfall of nearly $1.2 billion by mid-2009, another $1 billion shortfall is expected in the two-year budget cycle that will end in mid-2011.