Lawmakers, governor close on budget cut plan
November 25, 2008
Gov. Jim Gibbons, saying he and legislative leaders are close to solving this fiscal year’s budget shortfall, has tentatively called a special legislative session for Dec. 8-9.
Gibbons said the plan does not include new taxes, and the group is “not intending to reduce the operating accounts any further.”
He said all sides agreed to wait until after the Economic Forum meets Monday to set revenue projections for the remaining seven months of this year before detailing plans.
Assemblywoman Sheila Leslie, D-Reno, said the final projections from the Economic Forum are critical.
Director of Administration Andrew Clinger said the state needs to cut $330 million from the current budget to balance, bringing the total reduction this biennium to $1.5 billion.
Leslie and Gibbons both said the deal is basically ready, but awaiting a dollar total from the Economic Forum.
Recommended Stories For You
Gibbons admitted the plan is a mix of immediate fixes.
“It’s a short-term approach to finish the fiscal year,” he said.
The biggest single element in the mix is treasurer Kate Marshall’s proposal to use the Local Government Investment Pool to provide the state with what amounts to a line of credit up to $150 million to help manage cash flow through June 30.
Gibbons said that depends in part on whether legal advisers sign off on the plan before the group meets again after Monday’s forum.
Beyond that, he said, they are looking at “sweeping up some of the excess funds” in different state accounts ” which probably includes draining any reserves remaining in executive branch agencies. And they are looking at eliminating some exemptions to existing taxes and revenue sources.
With voters backing the idea, they will examine, either this year or for the next biennium, raising the room tax and taking up to 3 percent of that for the state budget.
“The changes that need to be made are neither pretty nor easy,” Gibbons said.
He said up to 100 positions may be terminated, but Clinger said many of those are already vacant.
Asked about federal aid, Gibbons said it’s unlikely Congress could provide help until next spring when it would be too late. He said federal assistance may, however, be helpful in building the next two-year budget.
Despite all the problems, he repeated his opposition to new or increased taxes.
“I’m trying to avoid taxes in the next biennium,” he said. “I think we can avoid taxes.”
He said it’s tough when the budget shortfall has grown from $120 million a year ago to $1.5 billion now.
As for long-term solutions, Gibbons said, he will be looking at reducing some departments, consolidating departments and services, and “making more efficient use of money.”
He said he still likes the idea of taking salary cuts in state service, pointing out that every percent cut saves about $32 million a year. That would have to be done through the Legislature.
– Contact reporter Geoff Dornan at firstname.lastname@example.org or 687-8750.