Highlights from tonight's speech

Gibbons said he would also support spending $110 million in surplus revenues to begin work on the systemwide Health Sciences Center at the university system.

He said that money will be matched by some $47 million in private and other funds raised by the university system.

The Health Sciences Center, which would have programs throughout the university system, is the system's top priority for the biennium.

Gibbons rejected the idea of increasing the gas tax saying he has called on the department of transportation to create an advisory panel on public-private partnerships to fund construction of highway improvements.

He said he would support the $170 million in surplus funding outgoing Gov. Kenny Guinn included to jump-start construction of the next phase of Interstate 15 in Las Vegas.

And he said he has asked NDOT Director Susan Martinovich to make highway needs in southern Nevada a top priority.

Gibbons said the existing all-day kindergarten program for at-risk schools will be continued. That program will cost the state about $50 million over the biennium.

But he said before the state commits to expanding that program to all Nevada elementary schools, the state should wait and see how the at-risk pilot program is working and how effective it is in improving student achievement.

He said if the results are positive the state should pur

Gov. Jim Gibbons tonight called on lawmakers to pass a constitutional amendment designed to protect private property from condemnation but without some of the problems contained in the PISTOL initiative petition which has already been passed by voters once.

He said the plan should bar government from taking private property then convenying it to another private person or business.

He said language in the PISTOL petition could cause serious problems and higher costs to the state in future construction projects such as highways. Specifically, that language would require the property be used for a public purpose within five years or the state would have to sell it back to the original owner for the original price then repurchase the propeprty ad current market value to get it back for completion of the project.

NDOT officials say that could cause decade long delays in badly needed highway projects and cost the state hundreds of millions of dollars.

Gibbons proposed creation of a working group chaired by Attorney General Catherine Cortez Masto and including lawmakers, law enforcement agencies and his wife Dawn to develop recommendations forthe legislature by April. He included a total of $17.4 million in his budget for education and anti-meth programs.

Gov. Gibbons has proposed reorganizing the board which manages the Public Employees Benefits Program to establish "a new panel of experts and professionals who have the appropriate skill set to lead our state through what is a looming financial storm."

The program is facing an unfunded liability totaling nearly $4 billion to cover subsidies for retiring state workers. Gibbons has proposed

putting $50 million in the budget toward that liability, which the federal government has mandated be reported on Nevada's books as a liability.

That, he said, could hurt the state's financial rating in the future, costing the state millions more in interest on construction and other bonds.

Gov. Jim Gibbons proposes two cuts in the Modified Business Tax. He would reduce the general business rate from 0.65 percent to 0.62 percent, reducing tax collections by $28.2 million.

He would also eliminate the per branch excise tax on banks, currently $1,750 apiece per year. That would cut taxes another $5.9 million over the biennium.

Gibbons proposes 2 percent raises for teachers and state emplooyees this coming year and 4 percent the following year.

The cost of the increases would add $279 million to the state budget.

That proposal saves about $30 million form the 3 percent each year outgoing Gov. Kenny Guinn proposed for state workers and teachers.

Gibbons said that savings should be put into paying for the unfunded liability in the state public employee benefits program.

Gibbons called for $60 million to support a pilot program in which 100 Nevada schools would get much more control over their own programs and destiny. Principals and teachers would decide at the individual level how best to teach their students.

He said the program has already proven a success in Canada, New York City, San Francisco and Houston and, in fact, that San Francisco's school district is now the top performing urban district in California.

Gibbons called for a program using tax exempt bonds to help teachers, nurses and other first time home buyers purchase homes.He said it would be modeled after the California Housing Finance Agency program and supposed by selling bonds which would be repaid by revenues generated through mortgage loans.