During better economic times, Nye County began the fiscal year on July 1, 2008, with a $4.1 million fund balance from the year before.

But due to the downturn in the economy -- punctuated by an expected $2.4 million drop in consolidated tax revenue this year, which includes sales taxes -- the county could end up almost $1 million in the hole and end the next fiscal year July 1, 2010, in even worse shape, with a $4.3 million deficit at the current rate of spending.

Those were the dire numbers released by Assistant County Manager Pam Webster midway through the fiscal year.

The amount paid to county consultants is being eyed for cost savings, and county department heads are being asked to streamline operations.

Webster said one saving grace has been the net proceeds of mining, which with the price of gold should bring in $1.8 million to county coffers, instead of the $796,000 budgeted.

Gold prices rose to a record high of $1,032 per ounce last March, amid fear of falling stock prices, and were $1,006 last week, before dropping back to $936 this week.

But when it comes to consolidated taxes, Nye County should receive $11 million this year, instead of $13.45 million budgeted last July 1. That's based on data from the Nevada Department of Taxation for only the first four months of the fiscal year.

Actual numbers from the state taxation office for the first six months of the 2008-2009 fiscal year, from July 1 through Dec. 31, show taxable sales in Nye County dropped 9.5 percent from $243.8 million to $220.7 million.

"That's really below what we had projected it to be," Commissioner Joni Eastley said, in brief remarks made by commissioners Tuesday about the bad news.

"Significantly," Webster replied. "These numbers are significantly down."

Likewise Nye County will receive another $1 million from the payment in lieu of taxes the U.S. government pays for federal land instead of taxes -- from $1.7 million to $2.7 million -- but funds will be cut back through another program, Secure Rural Schools, she said.

The county also won't receive $1 million in federal land leases this year for geothermal energy, oil and other uses, which the state legislature eliminated during a special, one-day budget hearing on the 2008-09 fiscal year budget last December.

Property tax collections should drop $356,000 below budgeted figures of $14.5 million, the county had budgeted an optimistic increase this year from $13 million to $14.8 million.

Property tax receipts "are projected to be below budgeted levels, and these are because construction didn't happen," Webster told commissioners. "The good news is there's some significant construction projects in 2010 in the Pahrump area, namely the detention facility, Walmart, a major hotel and a couple of other projects."

Nye County placed a requirement in the development agreement that Corrections Corporation of America purchase as many items as possible locally for the proposed federal detention center, so the county can reap the sales tax.

County expenses assume a 4 percent STEP increase paid to county employees this year and next. But a cost-of-living adjustment has been eliminated. Webster said the cost of living has actually declined lately.

Eastley said Webster's estimates of a potential $1 million shortfall in revenues this year was optimistic. She was concerned the state Legislature may take 1 percent of the county's sales tax percentage. The state has already passed a law requiring counties to assume the indigent accident fund.

Webster echoed Eastley's concern that a single claim by a disabled accident victim who is indigent could be "devastating" to the county.

The county is facing an increase in the cost of state retirement benefits, and the cost of medical insurance will go up at least 12 percent, Webster said.

"I'd like to take the remainder of March and meet with the budget heads and literally go through every expenditure we have, see what we can streamline," Webster said.

Final revenue projections from the Nevada Department of Taxation are due March 25, Webster said. She plans to convene a special budget workshop April 1.

The preliminary county budget is due to be presented to the Nevada Department of Taxation April 15 and the final budget May 18.

County Manager Rick Osborne said he's talked to department heads to make sure they cut wherever possible. First the county plans to look at cutting contractor services, he said.

* In a related item, commissioners voted 4-1 to ratify Osborne's pick of William Seymour as county comptroller. Commissioner Gary Hollis cast the sole dissenting vote. When asked to elaborate, Hollis said Seymour didn't have goverment experience. Seymour's last position listed on his resume was as senior vice-president and comptroller of PMI Mortgage Insurance Co. from 1994 to 2003, a San Francisco-based outfit.

Seymour replaces Tammy Otero, who was hired in October 2007 at $41.20 per hour, which comes out to $85,696 annually.

* Eastley took issue with a Pahrump Valley Times account of her statement on legislation eliminating a need for counties to publish a list of bills in the newspaper every quarter. Eastley said the proposed legislation by Assemblyman James Settelmeyer, R-Gardnerville, would still require publishing the list on the Internet.