Gibbons Defends Budget Plan, Challenges Nevadans to Provide Alternatives if they Disagree

CARSON CITY – Gov. Jim Gibbons today defended his plan to balance the state budget and challenged critics to come forward with workable alternatives if they object to any parts of his proposal.

In formally calling the Legislature into special session on Tuesday to deal with a massive funding shortfall, Gibbons yesterday released his list of proposals to balance the budget. It contains 40 different items, from 10 percent budget cuts to state agencies and education to taking $12.6 million from a scholarship fund.
The proposals cut spending in the current two-year budget by $895 million.
“If anyone else has any ideas on how to fix it, I am listening,” Gibbons said. “This criticism does not recognize that this problem is fixable, and I have presented a plan to fix it.”
The Legislature’s Interim Finance Committee will meet tomorrow and Monday to review Gibbons’ budget balancing proposals and review other options available to them.
Gibbons’ call for critics to produce their own solutions received some support today.
Mary Lau, president and CEO of the Retail Association of Nevada, said: “Work together people. If you don’t like this $20 million idea, then come up with a different $20 million idea. Instead we get the immediate response that the governor is mean-spirited. Where is the policy in that?”
Senate Majority Leader Steven Horsford, D-Las Vegas, was quoted in the Reno Gazette-Journal as saying: “This governor is mean-spirited and continues to put education last instead of first.”
Horsford said Gibbons has rejected some legislative proposals to reduce spending and instead proposed what he views as unacceptably large cuts to education.
Lau said the state needs productive discussions to get out of the budget crisis, not posturing.
While Gibbons said today his proposal to eliminate some deductions provided to the mining industry to generate $50 million in new revenue to the state is not a tax, Lau disagreed. Bringing more revenue into the state, particularly without the cooperation of the industry, is clearly a tax increase, she said. But she added it may be an effort to bring the industry to the table to forge an agreement on some type of revenue enhancement.
In contrast, Lau said the proposal to ensure sales taxes from purchases made over the Internet are appropriately levied and collected by the state is a legitimate endeavor and not a new tax.
Carole Vilardo, president of the Nevada Taxpayers Association, said Gibbons’ plan is a starting point that at least is on the table for public discussion and comment.
“It has been said by (Gibbons) and the Legislature there are no easy solutions to this,” she said. “I’m sure there are other elements that will surface. If some cuts are considered to be too steep there may be compromise, and cuts may be minimized in one area with greater cuts elsewhere.
“But in an economy like this there is nothing anyone can do that is going to be totally embraced as wonderful,” Vilardo said.
Vilardo agreed that the mining industry proposal is clearly a tax increase. But until details emerge on what “loopholes” Gibbons is proposing to eliminate to generate the new revenue, she had no further comment on the proposal.
Sen. Mike Schneider, D-Las Vegas, acknowledged that Gibbons at least has released a plan to balance the budget.
But he criticized the proposal to sweep the reserve fund that pays for the homeowner association Ombudsman’s Office, a position in the state Real Estate Division that resolves association disputes that Schneider worked to establish in 1997.
The fund is generated by a $3 fee per home per year and is only paid by residents of associations, he said. Taking the fund is the equivalent of levying a tax increase on one segment of the state.
“You can’t sweep that fund,” Schneider said. “It’s not general fund. It is specially set aside to run the ombudsman’s office. That is going to irritate a lot of people.”
The state Budget Office said today that only $500,000 of the $2.7 million in the ombudsman account is being proposed to be used as part of Gibbons’ budget balancing plan, not the entire amount.
Asked for an alternative to the proposal, Schneider said a better way to raise taxes would be to close loopholes in existing law that allow some businesses operating in Nevada to not pay their fair share of taxes to the state.
Assemblyman Don Gustavson, R-Sparks, said Gibbons has put forward a well reasoned plan and deserves credit for doing so.
“I think it is a workable plan if we can get it passed, although the leadership on the other side is not happy with it,” he said. “I think there are quite a few items that they will agree to because we are in trouble.”
Gustavson said he does not support one element: the proposal to use traffic cameras to capture revenue from uninsured motorists. But he acknowledged that he and other lawmakers must now find a way to make up for the $30 million that is proposed to be generated by the program.
Assemblyman James Settelmeyer, R-Gardnerville, said Gibbons does deserve credit for presenting a plan to balance the budget. But the lawmaker said he still has doubts about some of the components, particularly the proposal to close the Nevada State Prison with the accompanying layoff of 136 employees.
“I don’t know if shutting down NSP is going to save us any money,” he said.
Settelmeyer said he also has questions about whether the Department of Corrections has the space elsewhere in the system to accommodate the NSP inmate population.
“A lot of these proposals are extremely painful cuts,” he said. “The question is can we come up with better alternatives, and if so, will the governor alter the proclamation to include our concepts?”
One point is clear, Settelmeyer said: “Don’t bet on a one-day session.”

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