STATE: Gibbons rejects tax increases

As expected, Gov. Jim Gibbons on Thursday rejected the idea of tax increases to balance his $6.2 billion general fund budget.

Saying families and businesses are near their breaking point, he told the combined Senate and Assembly, "I will not ask these businesses and I will not ask these individuals to pay more when they have less."

"It is not the job of state government to put people out of work," he said.

Gibbons pointed to the mortgage and credit crises, declining number of visitors in the state and falling copper and other metal prices, saying that has driven up unemployment and increased the pressure on programs such as welfare.

"Higher taxes will just fuel the downward spiral," he said.

He said his proposed budget is balanced within the revenues available to the state but protects the areas that most need that protection without raising taxes.

He said those include minimizing the damage to public school funding, maintaining Nevada CheckUp to provide health benefits to children of the working poor, the senior property tax rebate program, juvenile justice and child welfare programs as well as services for children with developmental issues. And he said his budget sustains the Medicaid pharmacy program providing prescription drugs for those who can't afford them.

Gibbons also said he protected the existing all-day kindergarten budget even though it couldn't be expanded.

Gibbons defended one of his key proposals " a 6 percent pay cut for all state workers and teachers to save $435 million over the biennium. Without that and several other changes, he said thousands of layoffs would be necessary.

Budget Director Andrew Clinger said more than 9,000 would have had to be laid off.

Gibbons promised to restore state worker pay as well as step increases and longevity pay as soon as the economy recovers enough to afford it.

He said he will take the same 6 percent pay cut and has asked the other constitutional officers and branches of government to do the same.

Gibbons also referred to the reallocation of revenues from Clark and Washoe counties as "temporary." His budget takes four cents from the property taxes those counties collect and increases the state's allowance for collecting and distributing sales taxes to the counties.

He praised the recommendations of the SAGE commission studying government efficiency. The primary recommendations from SAGE shift the cost of state worker health benefits more to the workers, saving the state some $158 million over the biennium.

He said he is continuing the SAGE commission's work after it expires by creating a Sunset Commission to periodically review and evaluate state government's operations.

"I ask that members of the Legislature look at this budget with an open mind and in good faith," he said.

And he predicted that the state would come through this economic downturn "stronger through diversification." He renewed his pledge to help the state improve its economy by becoming an energy-exporting state, citing Nevada's geothermal, wind and solar resources.

Gibbons was interrupted by applause about a dozen times during the speech, but almost the only lawmakers applauding were Republicans.

- Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.