Lawmakers to convene over $900M budget mess

Nevada lawmakers are heading back to the state Capitol, charged with the responsibility to plug a $900 million budget hole in a special legislative session.

Waiting for them is Gov. Jim Gibbons, who's purchased a new veto stamp for the occasion.

The 21 state Senators and 42 members of the Assembly must reconcile their own evolving plans for balancing the budget with proposals for deep cuts called for by the Republican governor.

After weeks of negotiations, public hearings, closed meetings and just days to go before the special legislative session convenes Tuesday, no firm plans for solving Nevada's fiscal crisis have emerged.

And while administration officials and lawmakers say negotiations are cordial and ongoing, the prospects of a prolonged, contentious session simmer in a stew of political rhetoric that evokes reminders of 2003, when a special session lasted a month and the fight over tax increases ended up before the Nevada Supreme Court.

"You're hoping that behind closed doors they're coming to some concrete decisions," said Eric Herzik, a political scientist at the University of Nevada, Reno. "I'm cautiously optimistic that they will solve things over the weekend, but this has great potential to blow up.

Without an accord by Tuesday, "you could easily end up in court during the session" over procedural or political maneuvers, Herzik said.

The governor, by proclamation, sets the agenda for a special session. Gibbons' proclamation did not set a specific time frame for the session, only that it begins

9 a.m. Feb. 23.

Under the Nevada Constitution, lawmakers are limited to 20 days of pay in special session, currently either $146.29 per day or $137.90, depending on when they were elected. If it goes longer than that, they will continue to only receive a per diem of $161.

The session will cost $100,000 for the first day, and $50,000 each day after that.

The governor's office has blocked off four days, hoping the session will wrap up by Friday.

"Clearly if no progress is being made, the Legislature and the governor have no appetite for waiting around and staying in session," said Gibbons' spokesman Daniel Burns. "Each day they're in session is another layoff."

Revenue to the state, largely from sales and gambling taxes, is dramatically behind projections as Nevada's economy has been slow to pull out of the recession. Tourism is down and its once booming housing market has imploded, leading to tens of thousands of lost construction jobs. Unemployment is at record levels and the state leads in the nation in foreclosures and bankruptcies.

Gibbons, a first-term Republican who lags in polls heading into the June 8 primary election, has proposed roughly 10 percent cuts to most state agencies; closing the 140-year-old Nevada State Prison and a juvenile correctional center; laying off 227 state workers; sweeping 50 agency reserve accounts into the general fund; four-day work weeks; and extending monthly furloughs from eight to 10 hours.

He's also proposed capping allowable deductions for the mining industry to bring in an additional $25 million a year, and imposing taxes on Internet sales.

Gibbons blamed the state's fiscal abyss on the 2009 Legislature for imposing, over his veto, about $700 million in new taxes that are set to expire after the 2010 fiscal year.

"They gambled on new taxes and we all lost," he said in his Feb. 8 State of the State address.

That brought a swift rebuke from Senate Minority Leader Bill Raggio.

"The Legislature didn't cause this problem," the Reno Republican said during a hearing in which administration officials outlined proposed cuts that include rationing adult diapers and eliminating dentures and hearing aides for Medicaid recipients.

"We were able last session to delay some of this impact on the lives of a lot of Nevadans who really need some services," Raggio said.

Gibbons on Friday reinstated denture coverage.

Both the Senate and Assembly are controlled by Democrats, though Gibbons' plan has been criticized by lawmakers on both sides of the political aisle as "irresponsible," "ridiculous," and "unacceptable."

Especially troubling for them is $200 million in cuts, more than 10 percent, to public schools that administrators say would lead to thousands of teacher layoffs statewide. Senate Majority Leader Steven Horsford, D-North Las Vegas, and Assembly Speaker Barbara Buckley, D-Las Vegas, have assailed the governor's proposal as shortsighted and damaging to Nevada's economic recovery.

Horsford said Gibbons' plan would "drive the state into a full blown depression."

Lawmakers in recent hearings have pressed Nevada's mining and casino industries to voluntarily pony up to close the education gap, though no agreements have been revealed.

In last year's regular legislative session, Gibbons vetoed a record 48 bills, a streak that led to his veto stamp being donated to the Nevada State Museum.

Burns said the governor has purchased a new, $15 veto stamp and won't hesitate to use it if lawmakers push for additional taxes not endorsed by those who would pay them.

"Obviously, we hope it's something that is not necessary," Burns said.