Gibbons: Deeper state worker salary cuts needed

Gov. Jim Gibbons said Thursday that today's Economic Forum will likely take another big bite out of projected state revenues, necessitating more budget reductions, including further cuts in state worker salaries.

Gibbons made the statement at a press conference called to protest legislative "add backs" to his proposed budget, which he says now exceeds $60 million.

"It was a balanced budget providing for the core needs of the state of Nevada without raising taxes," he said. "With their amendments, it will not be a balanced budget providing for the core needs of the state of Nevada."

Gibbons said the only way they can balance that budget is to raise taxes.

"If they send me a budget that includes tax increases, I will veto it," Gibbons told reporters.

The Economic Forum is meeting today to finalize revenue estimates that must be used to build the state budget. It is expected to cut as much as $500 million more from the $5.7 billion projection made in December.

Gibbons said he believes it will still be possible to balance the budget without tax increases, but that doing so will require reducing state worker salaries more than the 6 percent cut already in his proposed budget.

"Salaries is one of the few areas," he said. "Look at the private sector. They're doing the same thing because 75-80 percent of any budget is salaries."

"If I don't reduce salaries, we have one recourse " lay thousands of people off."

Tax hikes, he said, aren't an option.

"We're not out of this recession," he said. "Now is not the time to raise taxes."

He said raising taxes on business would only result in more people losing jobs.

"We want to encourage the economy of the state of Nevada, not kill it."

He promised to present lawmakers with budget amendments after the forum makes its projections.

Each percent state worker salaries are reduced saves the state about $70 million over the biennium.

Majority Leader Steven Horsford, D-Las Vegas, said that two-thirds of that comes out of teacher salaries.

"So the cuts are to the classroom," he said. "Just to fund the governor's budget we need more revenues. His budget is not in balance as the (state) Constitution requires."

Horsford said after the forum that lawmakers may be looking at 42 percent less revenue than they had two years ago. He said the state can't cut that deep, and new revenues will be necessary.

Assembly Speaker Barbara Buckley, D-Las Vegas, said the governor is reportedly planning further cuts to K-12 education and salaries.

"We can't cut $3 billion or eliminate 42 percent of the services we provide. I think there will be bipartisan support for rejecting the governor's proposal," she said.

Gibbons also charged that, since he won't consider raising taxes, lawmakers made clear he and his staff aren't welcome in the budget talks. He said that was what his legislative director was told by Sen. Bill Raggio, R-Reno. Raggio responded that the governor's office has never been part of the closed door negotiations between the parties and houses in the Legislature.

Raggio said lawmakers have been working to identify exactly how much money is needed before putting together a revenue plan.

"We're going to do what's necessary," he said. But Raggio repeated his opinion that any revenue increases be sunseted so lawmakers reconsider whether they are needed in the future.

Buckley said the governor is welcome to come and discuss budget issues but hasn't contacted her.

"By contrast, I spoke with Gov. (Kenny) Guinn every day at the end of a session," she said.

"Usually a dialog involves two people willing to listen to each other's point of view," she said. "I've been having discussions and dialogs with governors for 16 years. Not this time."

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