STATE BUDGET: Gibbons, leaders near deal - News

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Nov. 21, 2008
Copyright © Las Vegas Review-Journal

STATE BUDGET: Gibbons, leaders near deal

Governor, legislators discuss cuts

By ED VOGEL
LAS VEGAS REVIEW-JOURNAL CAPITAL BUREAU

The state Economic Forum meets on Dec. 1 and will make estimates of state tax revenue that the governor by law must use in creating his proposed state budget for 2009-11.

Jim Gibbons
Governor expresses doubts about immediate room tax increase
Photo by The Associated Press

CARSON CITY -- While refusing to give details, Gov. Jim Gibbons and legislative leaders said Thursday they nearly have reached an agreement on a plan to quickly cut state spending by $300 million and balance the state budget with few layoffs.

After a two-hour, closed-door meeting in the Capitol, Gibbons, Assembly Speaker Barbara Buckley and Senate Majority Leader Steven Horsford, both D-Las Vegas, declined to say, until it is completed, what their proposed solution will entail. They will meet again Tuesday.

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"This is not a Republican or Democratic problem, a north or south problem, but a Nevada problem," Gibbons said. "We can work together, and we are moving to reach a final solution in the shortest amount of time."

"With cooperation and consensus we will get this done together," Horsford added.

The governor did not rule out the possibility that he might have to call a special legislative session in December to pass into law some of the proposals being discussed.

Gibbons said lawmakers are looking at a borrowing suggestion from state Treasurer Kate Marshall, who has said the state might secure a $150 million line of credit through the state's local government investment pool.

But the governor said the plan must be reviewed by lawyers to determine whether the state can borrow to meet current state expenses. Traditionally, the state borrows only to finance construction, highway and other long-term projects.

In response to questions, Gibbons added there also might be legal problems if he and legislators held a special legislative session now to start a 3 percentage point increase in room taxes.

Voters in Clark and Washoe counties backed the room tax increase in an advisory question on Election Day.

The proposal would bring in about $120 million a year, but Gibbons said implementing the increase now might not be legal. The question called for a July 1 date for the tax increase.

Gibbons also said lawmakers are not looking at new taxes but considering removing tax exemptions.

Gibbons added there already have been state employee layoffs, but lawmakers are trying to minimize additional layoffs and to avoid salary reductions.

Earlier in the day, state Budget Director Andrew Clinger said the state needs to cut $309 million in spending by the end of the fiscal year on June 30 because of declining tax revenue. But after a new analysis late Thursday, Clinger said the state is $286 million short of balancing the current fiscal year budget.

That is a major improvement from the administration's estimate of a $358 million shortfall last week.

However, Clinger said the deficit might climb again next week when the Taxation Department reports on new monthly sales tax collections and quarterly collections of payroll and other taxes.

Nevada state government operates under a two-year, $6.8 billion general fund budget. This year, Gibbons and the Legislature have cut state spending by $1.2 billion because of declining tax revenue.

The governor said recently that he expects there will be only about $5.7 billion in revenue available when he and legislators start working on a new two-year budget in February. The Legislature starts its 2009 session on Feb. 2.

The state Economic Forum meets on Dec. 1 and will make estimates of state tax revenue that the governor by law must use in creating his proposed state budget for 2009-11.

The forum is a group of five business leaders.

Gibbons said Wednesday he will give his State of the State address on Jan. 15, four days earlier than normal. That will allow legislators and others to attend the inauguration of President-elect Barack Obama.

Contact Las Vegas Review-Journal Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. state employee wrote on November 28, 2008 04:08 PM: The first thing we need to do is get rid of incompetent people that can't manage money. Then we need to get a state tax of 3% to 5% so everyone has to pay without lowering the gambling age subjecting the children to fix what incapable people messed up or having layoffs. I took an oath to serve and protect not search and destroy. Everyone tries to fight for what they have coming, you get a cost of living increase and now their answer is to take it back. We didn't mess it up but see who they look at to fix things, nobody works for free. honesty wrote on November 21, 2008 07:56 PM: ken, whom, pray tell, did you mean by sucking at the government trough other than those who suck at the government trough? ... yes, government is totally useless and we shouldn't pay a dime into it ... that must be why you got a completely private school education and never drive or walk because it would require you to drive on government-built streets or walk on government-built sidewalks ... and while i have no dealer for my drugs, you appear to have overdosed on r-j rhetoric and perhaps someone who so clearly believes everything rush limbaugh says shouldn't be talking about drugs ... drugs/rush ... get it? ... Ken wrote on November 21, 2008 12:55 PM: Honesty -- once again, you need to talk to your dealer about what you are being sold because it is destroying your mind. Who said anything about government employees. Union leaders are not government employees. But they will line up at the trough along with every other parasite who wants more money from the government. Their ears all perked up when they read in the paper about how there may be more money available then they originally thought. That means more handout -- more government cheese for every basket case and crook in this state. Party affiliation doesn't eliminate anyone from their desire to suck the government dry. You should know that. What you should also know is that this will be a non-issue after Jan 20th when the second coming of Christ assumes his rightful place as leader of the free world. He will simply smile at Pelosi and Reid and tell them to make it so. He'll sign anything they send him and Harry owes those who helped steal, I mean win, the State for Barry O. honesty wrote on November 21, 2008 12:05 PM: right, ken ... those were government employees flying their private jets to the congressional bailout hearing ... government employees living high at aig ... why don't you just admit that you don't know anything about what public employees really do ... some of them are bad apples, but most of them are hard-working people doing their jobs and trying to get a decent wage for it ... and don't answer me by quoting that moron of an editor who keeps citing right-wing propaganda to "prove" they are overpaid ... Penny wrote on November 21, 2008 09:04 AM: Dear Nevada, The next time we elect a governor, could we please find out who the candidates really are and whether they're qualified to do, like, ANYTHING? I'd swear I've seen Gibbons, that haircut, and a podium before: http://vwt.d2g.com:8081/mars_attacks.jpg JC wrote on November 21, 2008 08:54 AM: Typical conservative puke. Cut education while putting more money into prisons. Let's cut Gibbons. Put hilm in an all male prison so he can't try to rape anymore women. Ken wrote on November 21, 2008 08:50 AM: Why release any information now? Wait until you have a deal. The first mention of cutting a particular service is going to get the associated special interest group all bent out of shape. Make the pigs wait a little longer before their trough is filled with more cash to waste. honesty wrote on November 21, 2008 08:18 AM: if buckley wasn't more worried about how this affects her run for governor and horsford wasn't convinced that he's the nevada version of obama, we might get better things done in the legislature ... the question is whether they have the guts to take on the issues instead of doing the standard democratic thinking that having the goobernor around is better for the party than anything like, oh, solving problems .... 5150 Dave wrote on November 21, 2008 07:39 AM: Gibbons added there already have been state employee layoffs, but lawmakers are trying to minimize additional layoffs and to avoid salary reductions. LOL, look what we have working for us, a bunch of cowards. I don't want to see people lose their job, so all of these jerks should be willing to take a pay cut rather than be worried only about themselves.... I say cut their pay or make them walk. 50 degrees, cooooool Comment wrote on November 21, 2008 07:28 AM: What is the hush, hush about? Do they have a plan or do they not....if it is going to affect anyone in Vegas, then we have a right to know what is in store for the City of Vegas. Read All Comments