(Updated at 3:52 p.m. on Dec. 8)

CARSON CITY – Gov. Jim Gibbons said today he will ask for advice from a panel of private business financial experts on what the future holds for state revenues before deciding whether to call a special session to balance the budget.

Gibbons said he will issue an executive order calling the Economic Forum together to make its assessment and report back by Jan. 19. At that time, a decision will be made about whether a special session is necessary, he said.

State tax revenues are $53 million short for the first three months of the fiscal year that began July 1.

“We are still weighing options for what actions the state must take with regard to the recession and the revenues that are coming in shorter than expected to the state of Nevada,” he said. “Total revenue is up, that’s called tax increases. But spending is up even more. This cannot continue. The state must live within its means.”

Layoffs and all other options are on the table as agencies prepare contingency plans for budget cuts, Gibbons said. Those plans, showing what a 1.4 percent and 3 percent cut would mean to programs and services, are due to Gibbons by Dec. 15.

The five member Economic Forum, with three appointees from the governor and one each from the Assembly and Senate, projects tax revenues every two years that the Legislature must use to balance the state budget.

Gibbons appointed Matt Maddox, chief financial officer of Wynn Resorts, to serve as a new member of the panel. He replaces Cathy Santoro, an MGM Mirage executive who resigned from the panel after relocating out of state.

Gibbons said it is unusual to call the panel in to weigh in on the budget issues in-between sessions, and that his decision to do so was not universally supported by lawmakers during a budget discussion held Monday.

“Because this is an unprecedented time in Nevada, it calls for unprecedented action,” he said. “We think it is prudent to call them together to gives us that Economic Forum forecast.”

Gibbons said a $160 million line of credit approved by the 2009 Legislature to balance the two-year budget will be the last option he uses to solve the immediate budget shortfall. The money is already part of the budget, so using it now just means an additional shortfall that must be addressed later on, he said.

It would be a severe disruption to accomplish mid-year budget cuts in higher education, he said.

“Contracts are executed for the year, class schedules are published, registration is largely complete and we have accepted students’ fees,” Klaich said.

And because the Board of Regents would have to act first, Klaich said the higher education system will not be able to meet the Dec. 15 deadline to provide proposed budget cuts as requested. Klaich offered to meet with Gibbons to discuss alternatives to budget cuts to balance the budget.

Gibbons said he would prefer not to call a special session to deal with the budget. But Gibbons said he will call a special session by June 2010 to change a state law to allow Nevada to compete for federal funds to improve schools.

The state cannot now apply for the “Race to the Top” funds because of a law that says student performance cannot be used to evaluate teachers. The law was approved in a 2003 special session.

“I do not want to call two special sessions,” Gibbons said. “I want to make sure whatever we do, it qualifies Nevada for the Race to the Top funding.”