Governor calls economic forum over budget

Gov. Jim Gibbons has called a Friday meeting of the Economic Forum in advance of Monday's start of the legislative special session.

Gibbons' legal counsel Josh Hicks said the idea is to make sure the budget shortfall numbers and revenue projections presented to the Legislature are as "accurate and objective as possible."

"We wanted to make sure an objective set of eyes have looked at it," he said.

Director of Administration Andrew Clinger said the governor and legislative leadership haven't seen the projections for the coming fiscal year. Those numbers will be new to the members of the forum as well.

The forum was created following a similar budget crisis in 1991-1992 as an independent body of business and financial experts. The revenue projections the forum makes are required to be used by both the governor and lawmakers in building the state budget.

Normally, preparation for the forum takes a month or more with experts in areas from Gaming Control, Taxation and Business and Industry developing their best analysis of what each general fund revenue source is likely to be. They produce detailed forecasts in December which issued to refine the governor's proposed budget, then adjust those forecasts in May as the Legislature completes its review of the budget.

Legislative Counsel Bureau Director Lorne Malkiewich said that process won't be possible for Friday's meeting.

"We'll do the best we can in the time allowed," he said.

Based on the latest revenue collection data, Clinger said last week the shortfall for this biennium is up another $60 million to more than $970 million. He and the governor have said the shortfall for the next two-year budget cycle is likely to be $1 billion.

Because of that, Gibbons called for a special session to begin next Monday to deal with the shortfall in the fiscal year beginning July 1. He has made it clear the reason for a special session before that date is to take back the state employee and teacher pay raises which would otherwise take effect that day.

Senate Majority Leader Bill Raggio, R-Reno, backed that up by asking for legislation to "defer" the 4 percent cost of living raises for a year until July 1 2009.

He said the reason was that his fiscal staff has told him layoffs will be necessary if they don't take back the raises.

That, however, runs counter to what Clinger said before the special session was called. He said most agency heads were confident they could make the additional 2 percent reductions required to cover the additional shortfall without layoffs.

The constitution gives the governor the power to set the agenda for any special session, a power Gibbons and his staff defended in setting a narrow agenda for the special session which finished the budget and other business of the 2007 Legislature. This time, however, he indicated he planned to set an agenda which leaves the Legislature as many options as possible.

Several Democrats including Speaker Barbara Buckley of Las Vegas and Sheila Leslie of Reno, have charged Gibbons is effectively abdicating his responsibility to present them with an agenda for the special session.