RENO –– As local leaders juggle the budget crisis with frail confidence, local governments will continue to be hard-pressed in their goals to keep providing services to the public as costs increase and tax revenues decrease, according to a Monday revenue forecast provided to Washoe County leaders. The joint meeting included representatives from the cities of Reno and Sparks as well as Washoe County and the Washoe County School District.

The county’s report kept in tune with the financial hardships of the last three years, including a 12.7 percent unemployment rate, the average house having lost half its value and a stagnant population and school enrollment. Further undermining these bleak facts, there are no signs of recovery in the immediate future.

“The message is until we can recover and start creating jobs in the community, we’re not going to see an increase in tax sales, which is one of our significant sources of revenue,” said county finance director John Sherman.

Collectively, Washoe County, Reno and Sparks are looking at a $30 million combined shortfall.

Sparks alone faces a $4.9 million shortfall for the 2010-2011 biennium. New finance director Jeff Cronk has told city departments that $800,000 will have to be found to stabilize the budget when Sparks has been volatile with layoffs, voluntary buyouts and cuts to services.

Sherman said the housing bubble has deflated, with single-family house prices peaking in 2005 at $350,000 and now faring at about $180,000 on average, consistent with prices between 1990 and 2001.

Such trends have created a structural deficit, in which the costs of government spending have increased faster than its revenues can support.

The Washoe County School District does not yet know the extent of its financial hardships because district funding is tied to state funding. School administrators have been asked to plan for 6, 8 and 10 percent cuts.

District chief financial officer Gary Kraemer said two years ago, staff cut $3.8 million from its budget. Last year, an additional $10 million was cut. A 10 percent cut could equate to another $20 million slashed from the school district’s budget.

Officials sought to maintain a sense of optimism despite the bad news.

“I hope everyone in TV land understands the world has not come to an end,” Reno Mayor Bob Cashell said.

But not all shared his sentiment.

County resident Gary Schmidt spoke out against Nevada’s primary sources of revenue and said local governments in recent years have robbed residents of quality of life.

“A sense of wealth is a key issue,” Schmidt said. “People’s faith in the value of their homes is shaken throughout the nation. Nevada is absolutely the worst …. It had the greatest devastation of the bursting of a bubble and it will not ever recover from that. We have to look to other sources to rebuild a viable economy in Nevada.”

A frustrated county commissioner, Kitty Jung, tried to keep her eyes on the light at the end of the tunnel.

“This is all speculation that we’ll never be better again,” she said in conversation with the other officials. “I can’t handle hearing that anymore. … I’d hate to tell our public that we’ll never be prosperous again. Please stop speculating on what the future markets will look like. I don’t believe it’s helpful.”