Gibbons softens no-tax stance in face of $300 million shortfall

As legislative leaders and Gov. Jim Gibbons emerged Friday afternoon from a two-hour, closed-door review of the budget crisis, even the governor said he wouldn't completely reject the idea of revenue increases.

"I don't want to raise taxes. We have to look at the impact of any proposal like that," he said. But he added: "Nothing is off the table at this time."

Gibbons has said the state might have to look at ways of adding to the state's revenues. But he is primarily focused on efficiencies and improved collections of existing revenues.

What analysts told lawmakers in the meeting in Sen. Bill Raggio's Reno law office complex was that the $250 million additional cuts needed from this year's executive budget have grown to $300 million in the past week.

"It's an ugly number," said Gibbons.

Asked if that means a special session of the Legislature before the 2009 session convenes in February, he said, "I'm trying not to, but nobody could have foreseen this, nobody."

Gibbons wants to avoid a special session because it would have to raise general fund revenues between now and June 30, even if the tax and fee hikes were designated as temporary.

Senator Bill Raggio, R-Reno, was more direct: "This is the survival of the state and everything is on the table including additional revenues."

Raggio, Gibbons and Assembly Speaker Barbara Buckley, D-Las Vegas, have repeatedly said they oppose the idea of new taxes or tax hikes. But that was when the budget shortfall was first 4.5 percent, then 7.7 percent and more recently 14.1 percent.

Now, according to Director of Administration Andrew Clinger, the state is looking at $300 million over and above the cuts already made this biennium " for a total of $1.4 billion " and a potential cut for the coming budget cycle of up to 33 percent.

Raggio said the immediate issue is the remaining eight months of this fiscal year and whether a special session may be necessary before the 2009 Legislature.

"We need to know immediately if there is a cash flow problem," he said, "if we have to take immediate action."

Assembly Democrat Sheila Leslie of Reno, who represented Speaker Buckley at the meeting, described the situation as "dire," but said she thinks the state can avoid a special session.

Facing this situation, Raggio said, "this is not a time for political posturing." He said he would not be a partisan roadblock but would work with all parties to develop the best solutions for the state. He was joined by Senator Steven Horsford, D-Las Vegas, who just Tuesday took the majority leader's position from Raggio.

Horsford promised to work with the governor's office and Republican lawmakers "to find solutions to balance the budget without across-the-board cuts to essential services."

Gibbons said Friday's meeting was designed to provide all sides with information. He said the group would convene again, tentatively Nov. 17, to begin discussing how to fix the budget crisis.

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