Gibbons: State won't seek local government funds

CARSON CITY (AP) - State government won't look to cities and counties facing their own financial meltdowns to solve Nevada's imploding budget, Gov. Jim Gibbons said to local government leaders Monday.

"Your constituents are my constituents," Gibbons told about three dozen mayors and county officials who attended a video teleconference from Carson City. "Your challenges may be a little smaller, but they're all the same.

"It's a two-way street," he said in brief opening remarks while reporters were present.

Gibbons received cheers from those in attendance when he said, "We do not intend to do anything to take money from counties and cities in this go around."

That was welcome news to local elected officials. Since 2008, the state has diverted to its own coffers portions of revenues originally destined for local governments.

At the same time, Gibbons urged local governments not to look for the state to take over expensive programs, like child welfare services or mental health licensing, that they're struggling to maintain.

Jeff Fontaine, executive director of the Nevada Association of Counties, earlier said counties have taken a $235 million hit when some property tax revenue that had gone to counties was taken by the state.

"We've done our part with our citizens and the state should not take more from us," David Humke, Washoe County Commission chairman and a former state assemblyman, said before Monday's meeting began.

Washoe County, which includes Reno, has cut or left vacant about 500 positions and is currently facing a projected $25 million deficit.

Carson City Mayor Bob Crowell said the governor's comments are good news to local officials.

He said Carson City is doing what it can with the help of its employees.

"We're doing what we can to solve our budget issues and doing a pretty good job," he said.

Crowell echoed comments by other local officials that the capital wants to be left to decide its own fate.

Las Vegas Mayor Oscar Goodman traveled to the Capitol to deliver a simple message: "Let us alone to address our own issues and our own problems."

"He made a commitment to us that he won't bother us as long as we don't bother him," Goodman said afterward.

Las Vegas is facing a projected $430 million shortfall over the next five years.

Around the state, local governments have implemented hiring freezes or already cut staff and are seeking to reopen labor contracts to reduce salaries even more.

"That's the only remedy we have," Goodman said.

Nevada is facing a projected $1 billion shortfall for the rest of the biennium that ends June 30, 2011. Gibbons, a first-term Republican, will outline his plans during a special State of the State address Feb. 8, when he will call a special session of the Legislature to address the fiscal crisis.

Gibbons in December asked state agencies to prepare for potential budget cuts of up to 10 percent. On Monday, he said some agencies may have to cut even more, and reiterated that all options are being considered, including layoffs, salary reductions, reduced hours and building closures.

"It may be that we're now considering very painful layoffs," Gibbons told reporters after the meeting. "You can't balance this budget on the back of salary reductions alone."

Nevada, which relies heavily on sales, use and casino taxes for revenues, has been especially hard hit by the recession and the collapse of its once burgeoning housing market, as tourists and residents alike hold on to discretionary dollars.

The state's unemployment rate of 13 percent in December remained the second highest in the nation behind Michigan.