Budget shortfall grows

Legislative leaders said Thursday it would take an additional $2.2 billion in revenue to maintain current state services through the coming two year budget cycle.

But, while Republican and Democratic leadership admitted the budget can't be balanced with cuts alone, they were unwilling to indicate how much revenue the state will have to raise to do the job.

Assembly Speaker Barbara Buckley, D-Las Vegas, said the plan is to determine the minimum required to maintain essential services, decide what can be cut and prioritize what can be added back to the budget. When that is done and the Economic Forum makes its final revenue projections May 1, Buckley said, that will determine what revenue enhancements are necessary.

She was joined by Senate Majority Leader Steven Horsford, D-Las Vegas, who said, "It's not about a number. It's about a function."

He said talking about tax increases now is premature.

"We have to decide what are the essential services the state has to preserve," said Senate Minority Leader Bill Raggio, R-Reno.

The problem, he said, is, "Everybody's definition of essential services is different."

Assembly Minority Leader Heidi Gansert, R-Reno, also said the first task is to settle on a solid, essential budget plan.

Only John Ritter, brought to the briefing to represent business, was willing to talk about taxes. Ritter, head of Focus Property Group real estate developers, said he personally can't support more than $1 billion in increases and then only if they are spread across a broad base and "stable as possible."

"The one I favor is a kind of grab bag number of solutions," he said. "We're not going to balance this budget by cost cutting alone. There have to be some new revenues brought into the state."

Ritter said that opinion is his own but that he and other business representatives from every major industry in Nevada are all meeting regularly and working with lawmakers to solve the crisis.

He and Buckley both said the positive thing about this budget crisis is that representatives of business and lawmakers in both parties are working together to solve it instead of fighting.

Asked whether the state can restore funding to maintain existing services " which would require a total budget of $7.96 billion " Buckley said no.

"We believe that will be impossible. The gap is too large to meet without cuts."

She also rejected the idea of $1 billion in new revenue: "I think that would be unsustainable."

She said once the essential budget number is determined, stimulus funding will help make up at least part of the hole in the budget before raising revenues. Asked whether that wouldn't just push that part of the shortfall off until the 2011 budget cycle when the stimulus money will be gone, Raggio nodded in the affirmative. Buckley, however, said the hope is that the economy will have rebounded by then.

Ritter said business is also concerned the Legislature look beyond this crisis to improve, not reduce services.

"We face a challenge just to preserve the level of services we have today," he said. "That level of services has put us on the bottom of every list."

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