Special session: Agreement reached in middle of the night

(AP) - Nevada public schools, higher education and services to the poor were spared what some called the worst of the ugly cuts in a compromise approved early Monday by the Assembly and Senate to close a budget shortfall of more than $800 million.

Legislators then adjourned 2:13 a.m., wrapping up a six-day special legisative session.

Proposals that would have rationed adult diapers and eliminated hearing aides and dentures for Medicaid recipients were scrapped, viewed by even the most conservative lawmakers as repugnant budget-cutting choices.

AB6 passed in the Assembly 34-8. The Senate followed 20-1.

But legislative leaders of both parties said the fee hikes and cuts agreed to during a six-day special legislative session were merely a stopgap to plug Nevada's fiscal crisis, and they would not come without pain that has yet to be realized.

"No one likes everything in this agreement," said the first-term Republican governor, a staunch opponent of new fees and taxes who conceded to raising mining claim and foreclosure filing fees.

Gibbons called lawmakers into special session on Tuesday to address the state's budget hole, which was revised Sunday from an estimated $880 million to $805 million.

"We're obviously very pleased that we've been able to reach consensus," said Assembly Speaker Barbara Buckley, D-Las Vegas. "It wasn't easy."

Senate Majority Leader Steven Horsford, D-North Las Vegas, who wanted new or higher fees from casinos and other industries, said the agreement will tide the state over until the next regular legislative session in 2011.

"The challenge to come is even greater," he said, again urging the state's business groups to bring ideas for broadening the state's revenue base. State officials have projected the revenue shortfall to maintain services could balloon to $3 billion by next year.

Cuts to public schools and Nevada's university and community college system were reduced to about 7 percent from the 10 percent the governor originally proposed. Instead of $211 million, the cuts to school districts total $116.8 million.

Dan Klaich, chancellor of the Nevada System of Higher Education, said the cuts will cost the state's universities and colleges $50 million over the next 18 months. But he was relieved.

"We're so much better on Sunday morning than we were on Tuesday morning" when the special session began, Klaich said. College presidents and the board of regents will decide how campuses will implement the reductions.

Legislators approved a $6.9 billion, two-year budget in June. But Nevada's economy later imploded, as the recession eroded sales and casino taxes that make up the bulk of the state's general fund. Gibbons called the special session to address the state's fiscal crisis.

Senate Minority Leader Bill Raggio, R-Reno, said this special session and the budget problems confronted were the most difficult in his 38-year Senate career.

"There's something in here to like and something in here to dislike for everyone," he said. "There's going to be some pain out there."

Lawmakers raided dozens of agency reserve accounts for a $200 million infusion into the general fund. At the same time, about $300 million in cuts were made, said Heidi Gansert, R-Reno, Assembly minority leader.

The agreement includes new fees for annual mining claims on a tiered scale, depending on how many are owned. The fee will generate another $25 million. Financial institutions also will pay more for filing foreclosure actions, from $50 to $200, to raise another $13.8 million.

The 140-year-old Nevada State Prison, targeted for closure by the governor to save an estimated $13 million, will remain open, saving 136 jobs in the state's capital city.

Legislators approved a bill implementing a four-day, 10-hour work week for most state agencies, and extended the same authority to local governments if they determine it would save them money. They also approved bills giving the state, local governments and school districts more flexibility to manage their budgets.

AB4 allows school districts to increase first- and second-grade class sizes by two students, for a maximum of 18 per teacher. Third-grade classes can add three students, for a ratio of 21 students per teacher. The measure requires any money saved to be used to minimize budget cut effects on class sizes in other grades.

AB5 provides a temporary waiver to minimum textbook spending requirements for all public schools for the rest of the biennium. Both measures expire June 30, 2011.

A last minute addition to the legislator's agenda was a job bills sought by a contractor's group. SB5 lifts a sunset on a 1/8 cent sales tax in Clark County to help fund road projects in Clark County.