Cathleen Allison/Nevada Appeal Gov. Jim Gibbons and Budget Director Andrew Clinger answer questions Wednesday during a meeting at the Capitol with state leaders.
While lawmakers and local officials thanked Gov. Jim Gibbons for inviting them to a forum on how to handle the state's budget shortfall Wednesday, they strongly urged he consider something other than just cutting budgets.
Several officials, including Chancellor Jim Rogers, Reno Mayor Bob Cashell, Las Vegas Mayor Oscar Goodman and Assembly Ways and Means Chairman Morse Arberry called for major changes in how the state raises revenues.
Gibbons called the forum to quell protests from the university system, local governments and concerned state workers who saw his directive to plan for cuts of up to 5 percent as an order to do so. He told the crowd, including the mayors of Nevada's largest cities, county commissioners and legislative leaders, nothing has been cut, that his administration is just planning because sales tax revenues are falling behind.
"No budget reductions have been ordered yet," he said.
He said that probably won't occur until January or later when they have a better idea what's happening in the economy.
But he also cautioned that, if things get even worse, "it's entirely possible agencies may be asked to make further reductions. In fact, the projections presented Wednesday show sales taxes will be down 7.7 percent for the biennium, not just 5 percent."
Gibbons has said he will not accept new or higher taxes. He has also expressed resistance to the idea of calling a special legislative session to access the Rainy Day Fund even though that fund has almost $268 million, almost enough to cover the projected $285.6 million shortfall.
Budget Director Andrew Clinger said he would advise against taking all the money from that fund this early in the biennium because it's not known what may happen in the next 19 months.
Assemblyman Arberry said he has been through several cycles of budget cuts in his more than 20 years in the Legislature and that it's time to go beyond just cutting and do something to make state revenues more stable when the economy suffers a slump.
Cashell told Arberry there's only one way to do that.
"We will always have this fluctuation as long as we base operating revenue on a fluctuating tax," he said, referring to the sales tax.
He said the answer is to move away from that to property taxes, a much more stable source of government revenue.
Goodman echoed Arberry's comments saying "we don't want to go through this time after time after time. We have to look at other revenue."
Rogers has already said publicly the state should consider raising taxes as well as shifting where the revenue comes from, saying it's obvious the state doesn't raise enough money to provide necessary services.
Rogers said the university system got a 14.5 percent budget increase from the 2007 Legislature, but that all but $3.9 million of that $168 million was eaten up by inflation and rising expenses. That means a 5 percent cut would put the system behind where it was in the last budget cycle.
Rogers, himself a billionaire, urged Gibbons and lawmakers to consider getting more revenue from the richest Nevadans, saying, "there are a lot of us with a lot of money who would be willing to contribute more to this state."
"I'm not talking about the little guy," he said. "I don't want to put him out of business but I must tell you, I have lots of friends who make more than $10 million a year."
Clark County Commission Chairman Rory Reid raised a specific issue, asking Gibbons to exempt child welfare budgets in Clark and Washoe, which handle those services for the state, from any cuts.
If he won't, Reid said, they can't afford to fill 45 of the 85 caseworker positions that provide services to abused and neglected children and to the juvenile justice system in Clark County. He said Gibbons excluded K-12 education because cuts there would hurt children.
"Why wouldn't you exclude the children who are most vulnerable?"
Assembly Speaker Barbara Buckley, D-Las Vegas, said other areas should be excluded as well, including antimethamphetamine programs, the program to help parents of autistic children and mental health.
She said if the governor's administration and legislators work together, they can balance the budget, but that Gibbons should consider all alternatives, not just cuts.
"Then we can develop a Nevada-tailored response," she said. "And the Rainy Day Fund should be part of the solution."
"And CIP projects. There are some buildings on that list that don't have to be built this biennium. And what more can we get from the federal government," Buckley asked.
She thanked him for calling the forum and urged him to bring lawmakers and local officials to the table again before making final decisions.
• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.