Gibbons defends preparation for budget cuts

Gov. Jim Gibbons on Monday defended his decision to impose a hiring freeze and ask state agencies to prepare for budget cuts, saying that in view of early revenue numbers he's being prudent.

Gibbons has come under fire from several directions following the announcement last week. University Chancellor Jim Rogers has said flatly he won't cut any of the system's budgets. That, however, is a hollow threat since the state would make the cuts by simply reducing the amount it sends the system.

Welfare officials have also complained, saying they can't afford to lose any funding in their child welfare programs and won't submit any plan reducing their budgets.

And former Gov. Kenny Guinn suggested Gibbons may be a bit premature in calling for a freeze and cuts.

Gibbons said in a statement issued Monday that Nevada's unemployment rate is the highest it's been in nearly four years while revenue from sales taxes is down $6.5 million and gaming revenues off $15 million in just the first two months of this fiscal year.

He said the figures for the Real Estate Transfer Tax haven't arrived yet and, with the collapse of the housing market, those revenues are expected to be well below projections too.

He said those trends can and may well change.

"However, as governor, I believe that it is only prudent to ask for state agencies to prepare for a hiring freeze and budget reductions on the assumption that these numbers continue to decline rather than having to address a problem that requires far more drastic and hasty measures later."

"No government agency wants its budget reduced, but every agency needs to be aware that Nevada law requires our state to have a balanced budget. We simply cannot spend more revenue than we take in."

While Gibbons said preparing for sagging revenues is prudent, "that preparation does not include calling for a special session for tax increases."

And despite the cries from different agencies, he said 5 percent is reasonable.

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