Nye County commissioners voted to cut the general fund budget for the fiscal year ending June 30 by $1.2 million during a special meeting Monday.

Nye County Finance Director Tammy Otero warned commissioners, if the economic slowdown continues into the 2008-2009 fiscal year, they may be forced to make some tough decisions that could include layoffs, delaying payment of the 4 percent cost-of-living adjustment to employees or a tax increase.

The commissioners will hold a public workshop on the 2008-2009 budget at 8:30 a.m. Monday at the Bob Ruud Community Center.

The $1.2 million cut represents portions of the general fund that haven't been spent yet, Otero said.

Projections indicate the county's consolidated tax revenues, which include sales tax, liquor, gas and other taxes, are likely to drop from $13.5 million to $11.7 million this fiscal year.

The total general fund budget for this fiscal year is projected to drop from $40.2 million to $38.8 million.

For the 2008-09 fiscal year which begins July 1, Otero said she took $1.4 million out of a stabilization fund established to shore up the budget during bad economic times, to start the year with a healthier fund balance.

Another $384,000 was drawn from the net proceeds of mining part of the hospital tax fund and another $280,000 from land sales.

The revisions to the 2007-08 fiscal year budget cut $182,446 from salaries and benefits, $1 million from services and supplies, $20,054 from capital projects and $45,869 from grants.

The county would then continue the 2008-09 fiscal year budget on July 1 at the same spending level as the reduced funding for the 2007-08 year.

"The major problem lies in the consolidated tax, and that is made up primarily of sales tax, and that is on the decline. I'm tracking it every month. Every month it gets worse. I have not seen it hit the bottom yet, so until I know where the bottom is, I won't be able to know where we're going except down at this point," Otero told commissioners by video conference.

On the bright side, Otero optimistically predicts collecting another $1 million in sales tax next fiscal year from the new Home Depot store and the federal detention center project. The Home Depot store is expected to open in August and provide a boost to the Pahrump economy similar to that provided by the opening of the Wal-Mart store five years ago this month.

Otero said the county has unfilled positions that will remain vacant. The 4 percent employee cost of living adjustment could be postponed from July until December, a $788,000 expenditure, if the labor unions approve, she said. The cost-of-living adjustment is tied to the Consumer Price Index.

Referring to the upcoming 2008-09 budget, Otero said, "Layoffs are a consideration you may want to think about -- or potentially have to think about -- depending how long this situation lasts. There's always the option of a tax increase. It's just an option."

Commissioner Butch Borasky made the motion to reduce the budget based on Otero's suggestions. There was no discussion about the budget from among the other commissioners.

Sheriff Tony DeMeo said he has some concerns over having enough money in the fourth quarter of this year to cover any unforeseen emergencies.

He said high gas prices caused him to go over budget in that category, he's over budget on prisoner meals, and now he has to pay deputies more overtime to guard possible murder suspect Kelvin Owens at a Las Vegas hospital.

"I want to make sure we have a rainy day fund in case of emergencies," DeMeo said.

While crime statistics decreased in the first two months of 2008, DeMeo sees that trend reversing itself.

Unless the economy improves and county revenues go up, the county would end the 2008-09 fiscal year on June 30, 2009 with $479,363 left in the fund balance -- what Otero called an unacceptable number.