Nevada governor says budget shortfall is nearly $900 million |

Nevada governor says budget shortfall is nearly $900 million

Brendan Riley, Associated Press Writer

CARSON CITY, Nev. (AP) ” Nevada Gov. Jim Gibbons told top lawmakers today that the state’s budget shortfall could reach nearly $900 million by mid-2009 and he’ll work with them to find more ways of reducing spending beyond the 4.5 percent cutbacks he ordered in January.

In a two-hour, closed-door meeting in Senate Majority Leader Bill Raggio’s office in Reno, the Republican governor and both GOP and Democratic legislative leaders talked about options such as freezing capital construction projects rather than across-the-board cuts.

Gibbons planned to discuss the shortfall at a press briefing later Monday.

At the private meeting with Raggio, R-Reno, Assembly Speaker Barbara Buckley, D-Las Vegas, Senate Minority Leader Dina Titus, D-Las Vegas, Assembly Minority Leader Heidi Gansert, R-Reno, and others, Gibbons said no decisions on reductions had been made yet.

More meetings between the governor and his budget experts and the lawmakers and their budget analysts are planned, with the goal of achieving a joint agreement by mid-April.

One common goal is to try to avoid staffing cutbacks. That would be possible if delays in various capital construction projects and other moneysaving moves can cover the looming deficit.

Buckley described the meeting with Gibbons as cooperative, adding that her big goal is to avoid cuts in education and human services programs.

“We’re working collaboratively,” Buckley said, adding that’s different from the earlier cuts imposed by Gibbons amid complaints that he wasn’t consulting with the lawmakers.

The shortfall projections, which have increased more than fourfold since last September, were updated following last week’s grim economic news of a continuing slump in sales by Nevada merchants. Also, the state is dealing with higher-than-average unemployment.

The state’s cut of sales taxes is now $61 million, or 5.7 percent, below forecasts for the current fiscal year. A recent Gaming Control Board report showed that the state’s taxes on casino winnings are $48.2 million, or 8.5 percent, below forecasts for the same period. Taxes on the casinos and on sales are the two largest revenue sources for state government.

Besides gambling and sales taxes, an update at the end of February showed that insurance premium, real estate transfer and business taxes also are down.

“This tough economic time is something Nevada needs to work it’s way through, but the governor is confident that the foundation of Nevada’s economy is strong and that the state will come out of this difficult period in a solid position,” Gibbons press secretary Ben Kieckhefer said Sunday.

Kieckhefer added that states across the nation “are suffering revenue shortfalls, many much worse than Nevada’s.”

As the projected shortfall climbs, Gibbons remains opposed to calling a special legislative session to consider new or higher taxes to generate more revenue. That has fueled concern that the only way to cope with the shortfall would be to impose across-the-board cuts.

The prospect of such cuts is particularly worrisome for leaders of Nevada’s K-12 public schools and university college systems because the January reductions are costing them nearly $151 million.

Jim Rogers, chancellor of the state university-college system, favors a renewed push for a special legislative session to find new funding sources. But Gibbons, who ran on a no-new-taxes program in 2006, isn’t alone in opposing that idea. He’s getting support from Raggio.

The state’s Department of Health and Human Services had to cut about $82 million under the 4.5 percent plan, and Mike Willden, head of the big agency, has said client services likely would have to be reduced if the big agency is directed by Gibbons to make more cuts.

While the governor had sent out a directive Friday indicating he wanted a 1.5 percent budget cut atop the 4.5 percent reduction in the agency, that plan was pulled back by Monday.

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