NV Assembly speaker: budget challenge daunting

CARSON CITY, Nev. (AP) - Nevada lawmakers face a "daunting challenge" to balance a state budget nearly $900 million in the red, Assembly Speaker Barbara Buckley said Tuesday in opening remarks to a special legislative session.

Buckley, D-Las Vegas, said legislators will review proposals by Republican Gov. Jim Gibbons that call for roughly 10 percent cuts to all state agencies. But she said "we can do better" than deep reductions to education and services for the poor.

Senate Majority Leader Steven Horsford, D-North Las Vegas, agreed, and said legislators were in talks with business groups, mining and casino representatives on how to raise fees to soften the blow.

"No one has told me 'no' and they understand the dire situation we're faced with," Horsford told reporters after a morning floor session.

In her remarks, Buckley said lawmakers faced the "challenge to balance this budget responsibly, but to do so in a way that is not going to cause irreparable damage to education, K-12, higher education, services to those most vulnerable and the core functions of our state government."

School administrators have said the reductions could decimate the state's educational programs and lead to thousands of teacher layoffs and elimination of higher education programs. Elementary and secondary schools would lose about $166 million in the next fiscal year under the governor's proposal.

Lawmakers and administration officials said they've been working together for solutions, but their relationship is strained. Besides 10 percent cuts, Gibbons has proposed closing the Nevada State Prison, extending worker furloughs and sweeping reserve accounts to close the budget shortfall.

About three dozen state workers demonstrated outside the Legislature to protest the governor's recommended cuts, some carrying signs that read, "state workers have given enough," and "Gibbons' pay cuts took my American Dream."

Nevada, which is heavily reliant on sales and casino taxes, was hard hit by the recession and has been slow to show signs of rebound. The state leads the nation in foreclosures and its 13 percent unemployment rate is second highest.

Gibbons also recommended capping deductions for the mining industry, a move the administration says would bring in an additional $25 million a year. Lawmakers, however, are skeptical, and Gibbons' critics charge he's reneged on a pledge not to raise taxes. Backers of an initiative petition to increase mining taxes also held a rally Tuesday on the Capitol grounds.

Assembly Minority Leader Heidi Gansert, R-Reno, said, mining needs to be addressed, but there were concerns the governor's proposal would lead to court challenges and amount to naught. She said other means are being explored.

"We're still working on everything," she said. "It's a moving target."

Legislators in meetings the last two weeks have pushed for new fees from industries to help pay the costs of agencies that regulate them.

But Gibbons, who purchased a new $15 veto stamp for the session, has said he won't support any fee or tax hikes unless they are endorsed by those who pay them. Gibbons on Monday backtracked by removing from consideration fee some fee increases he had originally proposed.

Appearing Tuesday on KRNV-TV's "Nevada Newsmakers," Gibbons reiterated his criticism of the 2009 Legislature, blaming lawmakers for making the state's recession worse because they imposed new fees and taxes, most of which will sunset at the of 2010.

"We are paying the price for that," he said. "Now the Legislature is asking to go back into the pockets of voters, of working taxpayers."