Clark County’s administration laid out its 2026 budget outlook on Wednesday, Nov. 12, warning the council that rising costs and years of limited revenue growth continue to push the county into a deeper structural deficit. County Manager Kathleen Otto said the recommendations before the council aim to slow the gap between expenses and income, but will not close it.
Otto informed the council that the imbalance is already reflected in next year’s forecast.
“As you'll see in this presentation, it is important to note that the demand for services and inflation, aging infrastructure, and unfunded mandates really continue to outpace the revenue growth, creating an ongoing structural imbalance in our budget,” she said.
The proposal relies on a full 1% property tax levy increase for both the general fund and road fund, the use of available banked capacity, and an anticipated 2% increase in sales tax revenue projections. Those steps are intended to preserve reserves, maintain core services, and stabilize departments facing long-term cost pressures.
Otto walked the council through the general fund’s numbers for 2026. The county expects to begin the year with $77.4 million in fund balance, collect about $205 million in revenue, and spend roughly $222 million on operations. Another $13.5 million is planned for capital projects.
After required set-asides and the county’s minimum fund balance policy are applied, only about $5 million would be available for one-time needs. Even with the tax options included, the general fund still carries a structural deficit of more than $14 million.
Otto said adopting both the 1% levy and the banked capacity would add roughly $1.47 million in revenue next year, with larger impacts in the years that follow. Not taking either would widen the ongoing deficit and shrink the county’s flexibility for one-time spending.
Councilor Wil Fuentes asked Otto how the county’s long-term decisions contributed to the current shortfall.
“One of the main things is the council not adopting the allowable 1% (property tax increase). I shared in the annual budget last year that [of] six out of 12 years, council did not take the 1% that would have cost on average a homeowner about $20 a year for those six years combined, and we lost $37.5 million. That does not include not taking the 1% last year. So that was the prior six years. So that itself makes a tremendous impact on our budget,” she said.
Otto said the general fund is projected to fall below the county’s minimum fund balance requirement in 2027 and drop into negative territory by 2029 if no changes are made.
If the council takes no action, the county is projected to have a $10.6 million deficit as its starting fund balance by 2030. The 1% levy and the banked capacity option would result in a negative $4.5 million the same year. The following year, the county is still projected to start with a $24.8 million deficit, or over $30 million with no action. Those projections do not assume additional mandates or new program requests.
The council also reviewed forecasts for other major funds. Mental health sales tax requests total $5 million. The road fund faces varying deficits depending on which levy options are adopted. Real Estate Excise Tax revenue would see a $2.4 million reduction in 2026 before recovering in later years as bonds are paid off.
Council Chair Sue Marshall asked how members should introduce amendments ahead of December’s public hearings. Otto advised sharing proposals with colleagues 48 hours in advance and submitting them to staff as early as possible.
Public hearings on the 2026 budget are scheduled for Dec. 1 and 2. The county must approve a budget during the first week of December.
