Nevada governor: First year a roller-coaster ride

Nevada Gov. Jim Gibbons likens his first year in office to a roller-coaster ride - and says his administration won't run off the tracks despite the state's economic woes, his low approval ratings and other hassles.

A looming tax shortfall has led to planning by the governor for agency spending cuts of nearly 5 percent. Gibbons' voter approval ratings, while up, don't match his disapproval ratings. His adamant stand against any new taxes has led to criticism from some leaders of the state's powerful gambling industry.

And the Republican governor is still caught up in a Justice Department probe to determine whether, as a member of Congress, he did favors for a wealthy friend who obtained lucrative defense contracts.

"Let me describe the first year as a roller-coaster," Gibbons said in an interview. "You build up and build up to the expectations of being governor. ... When you're going up you're wondering what's going to happen when you get to the top. And sure enough, there are some changes in your expectations when you're up there."

Chief among the unanticipated consequences, Gibbons says, is a slump in sales taxes and other levies that has resulted in the government agency cutback plans that would save about $440 million in the current two-year budget cycle.

Members of the state Economic Forum made revenue projections that Gibbons followed in signing the $6.8 billion budget approved by the Legislature, "but their crystal ball wasn't good enough," he said.

Now, added Gibbons, he must make cuts "that affect people, families, children, education, security, all of these things that are things you thought you had settled."

The governor says there have been rewards, such as disaster assistance compacts with several Western states during the summer fire season. Gibbons also was able to claim after the 2007 legislative session ended that he got most of what he sought in his first State of the State address.

As for his low approval ratings, Gibbons says he won't "run this government based on the polls. I'm not one who sticks my finger up in the air and senses the direction of the wind, and then jumps out in front and tries to lead the wind wherever it may go. That's not real leadership."

One factor in those ratings is the still-pending Justice Department investigation into whether he misused his influence while in Congress. Warren Trepp, a friend of Gibbons, has been accused of giving money and a Caribbean cruise to Gibbons in exchange for his help in acquiring lucrative defense contracts for his eTreppid Technologies company.

The allegations were made by former eTreppid software designer Dennis Montgomery. Trepp and Gibbons have denied any wrongdoing.

"The fact is, the longer it goes, the more truth will come out about the outrageous allegations made by Mr. Montgomery that are totally false," Gibbons said, adding that he has heard nothing new about the case.

Factors that have helped Gibbons with some voters include his campaign promise of no new taxes. But some gambling industry leaders have said Nevada's economy will remain chaotic until the Legislature and governor support a broader tax base - a move that would likely reduce support for ballot proposals that would raise casino taxes.

Gibbons said he's not at odds with the state's dominant casino industry even though he won't call for a special legislative session on taxes and remains flatly opposed to any higher state taxes.

"I have maintained that government can maintain itself and actually operate on its current existing revenues, and will continue with that until I'm shown that it's impossible to do," Gibbons said.

As for the initiatives to raise casino taxes, Gibbons said he'll "do everything I can to help that industry ... avoid being hit by a truck." He said his definition of a "truck" includes a ballot proposal by teachers to raise levies paid by big casinos from 6.75 percent to 9.75 percent.

Gibbons also said his plan for government spending cuts will help the state get through "this rather low point in our revenue returns." He added that several Nevada governors who preceded him, from the 1960s on, also have had to impose cuts.

But Gibbons' spending reduction planning has led to criticism from some legislators and activists who fear that vital government services will be cut too much - even with the plan being revamped so that 8 percent cuts for some agencies and programs will drop to 4.5 percent.

The governor, in a surprise announcement Friday, said he was able to reduce the cuts by adding more programs to the mix - notably K-12 public schools and the state prison system, which had been exempt - and by committing to tapping the state's rainy-day fund for fiscal emergencies.

Are there more surprise moves in the works as 2007 winds down? That wouldn't be uncharacteristic for Gibbons, who started his four-year term with an unprecedented midnight oath-taking last New Year's Eve. That was seen as a way to undermine a key appointment by his predecessor, former Gov. Kenny Guinn, although Gibbons insisted that security concerns prompted him to take office as soon as possible.

"You have to wait and see what's coming up," Gibbons said. "I'm still trying to figure out my crystal ball."