Gibbons Wants Restructuring of State Government in Budget Crisis – Lawmakers Want to Lessen Impact of Cuts with Fees, Enhanced Tax Collections

(Updated at 10:23 a.m. on Feb. 9, 2010)
CARSON CITY – In a 25-minute televised speech that broke little new ground in resolving Nevada’s pressing budget crisis, Gov. Jim Gibbons today talked tough about using the opportunity to make long-term changes to streamline state government and eliminate mandates in public education spending.
In announcing a special session of the Legislature to start Feb. 23 to deal with an $881 million shortfall, Gibbons said state government needs a fundamental re-evaluation.
“Nevada state government cannot afford to be all things to all people,” he said. “I am demanding our programs work or be eliminated.  And I will ask our citizens to accept less from government and to take more personal responsibility.”
“More government spending and more government mandates are never the answer,” Gibbons said. “With 13 percent of our citizens unemployed, Nevada cannot continue to fund government as we know it today. Society is changing. State government must change with it.”
Gibbons also said he will ask the Legislature during the special session to consider his education reform plan, which advocates eliminating state mandates for all-day kindergarten and smaller class sizes in the lower elementary grades. He also wants the Legislature to consider his school voucher plan.
“It’s time to let local school boards, teachers, and parents have a voice in how that money is spent,” he said. “I request the Nevada Legislature give my education reform plan a fair hearing in the upcoming special session.”
Gibbons did not offer much in the way of new answers to the shortfall. He has already proposed a 10 percent across-the-board cut that would generate $418 million toward a balanced budget. In comments after his speech, Gibbons said his administration is getting close to completing a plan, just as legislative leadership is finalizing its proposals.
“We haven’t finalized our last few decisions,” he said. “We’re still working with the Legislature.”
But Gibbons said in his state of the state address that salary cuts for state employees may be a piece of the solution.
“New across-the-board salary reductions for state workers may be necessary, but that will be a last resort,” he said.
In response to the address, Senate Majority Leader Steven Horsford, D-Las Vegas, said cuts to state programs and services are difficult because more than 90 percent of spending goes to education, health and human services and public safety.
“The only difference between all of us and our state government is the choices made in state government don’t affect just some children, or some families or a few businesses,” he said. “Those choices impact all of us as Nevadans.”
Even so, Horsford said he has no plans to entertain any kind of a tax increase during the current economic slowdown as a way to balance the budget. When the economy does rebound, Horsford said he will pursue a broader and more stable tax structure to ensure Nevada can withstand future recessions.
In the meantime, ensuring mining and other industries pay their fair share of fees, and enforcing the payment of uncollected taxes, are just a couple of ways the budget can be balanced without sacrificing critical programs, he said.
Horsford also rejected Gibbons’ call for school vouchers, calling the idea unconstitutional.
Gibbons rejected that characterization, saying his voucher proposal complies with the requirements of the state’s education funding law.
Clark County Commissioner Rory Reid, a Democrat who is running for governor, said in response to the speech that Nevada’s current crisis is due to Gibbons’ failed leadership.
“The failure to develop any strategy for diversifying our economy – even in the face of global recession, brought us to this day,” he said.
Assembly Speaker Barbara Buckley, D-Las Vegas, said that the governor, “lost an opportunity to talk very bluntly about the state of our state, and instead relied on sloganeering.”
She also disapproved of Gov. Gibbons’ proposals for education reform, because “none of them seem likely to improve education,”  and that cutting funding and laying off teachers “is not going to provide the quality of education we want for our kids.”
Assembly Minority Leader Heidi Gansert, R-Reno, defended the Nevada Legislature against Gibbons’ attacks, saying, “we cut significant amounts out of the budget” during last year’s legislative session.
But she agreed with the view that raising taxes is not the answer to eliminating the current budget shortfall. A reduction in the size of state government will be needed, Gansert said.
“People should expect that state services will be affected,” Gansert said. “The private sector has been severely affected by this recession. The impacts have not yet been felt by the public employees, and it looks like it’s time that they, too, will be affected.”
Assemblyman Ed Goedhart, R-Amargosa Valley, said that it is Nevada’s citizens who will ultimately fix Nevada’s economy, and that the reduction of state government is the right way to allow that to happen.
“As much as a lot of progressives would like to say they can dictate and regulate our way to a better future, it all comes down to the individual,” he said. “We have to get out of the way of the individual, to let them make it a better state.  It can’t be fixed from the top down — it needs to be fixed from the bottom up”
Despite comments that his administration and lawmakers are working together to solve the budget shortfall challenge, Gibbons still criticized those lawmakers who in 2009 voted to raise taxes to balance the two-year budget. The shortfall is primarily due to tax revenues coming in much lower than anticipated.
“They raised taxes one-billion dollars, and they made government bigger,” he said. “They made the wrong call.  I vetoed their new taxes and their inflated spending.  I thought it was wrong then.  I know it’s wrong now. I planned responsibly. They gambled on new taxes and we all lost.”
(Nevada News Bureau intern Phillip Moyer contributed to this report.)

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