Gov. Jim Gibbons and first lady Dawn Gibbons prepare to dance at the Inaugural Ball at The Venetian on Friday night. Earlier Friday, the new governor expressed dissatisfaction with the work of the state's blue-ribbon panel on transportation infrastructure. Photo by Samantha Clemens.

Gov. Jim Gibbons told the Review-Journal on Friday that he is unsatisfied with the work of the state's blue-ribbon panel on transportation infrastructure and will need a new committee to tell him how to fund Nevada's road projects, which face an estimated $3.8 billion shortfall.

"They never told us how to fund it. All the blue-ribbon commission told us was we need a number of dollars," he said. "... It didn't do what I think it should have done, which is be all-inclusive of all the creative ways to fund it."

Gibbons also said he plans to propose a "pay-as-you-go, self-funding trust" to solve the state's other looming liability, the public employee retirement health benefits system.

But he declined to endorse the solution former Gov. Kenny Guinn proposed unsuccessfully, which would have put new state employees on a defined-contribution plan while keeping existing employees' defined-benefit system. During his campaign, Gibbons said he would support such a proposal.

In the 40-minute interview with the newspaper's editorial board, Gibbons rarely gave a definitive "yes" or "no" answer in response to questions.

Although Gibbons mentioned the road and retirement liabilities in his State of the State speech Monday, he did not propose long-term solutions for them.

He proposed spending $170 million of the state's revenue surplus on road projects and putting $50 million toward the retirement health care costs, which are estimated at as much as $4.1 billion over 30 years.

Gibbons' own budget director acknowledged in a briefing before the State of the State that amount was a virtual drop in the bucket. The $50 million, he said, wasn't even an adequate annual installment.

But on Friday, Gibbons was eager to talk about planning ahead.

"We need to start recognizing that we need to start doing better planning well into the future," he said.

In urban areas, he said, development is moving outward, and that should be anticipated and provided for.

"As we move that way, we should be planning for larger freeways to accommodate what we see, not just five years down the road, not 10 years, but 20 years down the road," he said.

Gibbons said he will convene a new group of experts to come up with more ideas on how to fund road projects. "I want them to come up with some creative ideas," he said. "I think there are some ways to be able to do this. The longer you put it off, the more it costs."

The current blue-ribbon panel has proposed several options for getting the funds, including toll roads, fee increases and shifting monies already in the budget.

Gibbons disputed the idea that some of the projects on the top 10 list could be put off for more than a decade. "The problem is that some of the funding for these projects is federal project funding" which could be lost if it isn't used, he said.

He also said some of the projects were needed not because of traffic congestion but because of safety concerns.

Gibbons repeated his insistence, however, that he would not approve increasing the gasoline tax, or any tax for that matter.

"If they can get the support in the Legislature to pass a tax, and it will pass my veto, I will pass it," he said.

The budget director, Andrew Clinger, said the budget, which consumes all of the state's surplus and reduces taxes on banks by about $34 million, contains no tax increases but some small fee increases.

As for the retirement benefits trust fund, Gibbons said he was proposing putting a chunk of state funds up front to create a trust that would continue to be funded by investment income. He was vague about whether the costs would be borne by taxpayers, the public employees themselves or both.

Taxpayers, he said, would probably pay "a portion of it, and future employees would be picking up a share of it as well." Later, he said, "There may be a time when there will be employees paying part of it."

Gibbons on Friday defended his plans for education and energy, which critics have called confusing.

For education, he is promoting a $60 million pilot program of so-called empowerment schools, which he said would have open enrollment, merit pay for teachers and budgetary authority for principals.

In his State of the State speech, Gibbons said his approach was largely modeled on a program used in Edmonton, Alberta. However, the Edmonton program, it was discovered, does not have merit pay, and there are no student performance benchmarks to prove its success.

On Friday, Gibbons was more enthusiastic about the empowerment schools being created in New York City. His staffers said he talked to New York City Mayor Michael Bloomberg on Tuesday.

According to the city's Department of Education Web site, there are 354 of these schools. Gibbons said they give principals control over budgets, curriculum and staffing and "make principals the true CEO" of their schools.

He said the empowerment pilot would run parallel to the state's limited all-day kindergarten program, and the two would be compared side-by-side to see which produced better results. The kindergarten program exists only in low-income schools, but Gibbons said it hasn't been decided which 100 schools would get the empowerment designation and funding.

Gibbons also stood behind his plan to turn coal into diesel for jet fuel. He said it was needed because "we're a tourism-based market," and other alternative energies, such as wind and solar, aren't usable for transportation.

Currently, Nevada's tourism economy can be disrupted by interruptions in the sources of oil it is dependent on, such as the pipeline from California or the oil rigs in the Gulf of Mexico.

Gibbons said the process doesn't have to use much water if "air-cooling or fine-particulate-sand-cooling" are used.

Gibbons said the example he's already cited of such a process being used in Wyoming wasn't the only one. "Liquefication's been around," he said. "There's one in South Africa that's been around for 10 years. It makes jet fuel."

Gibbons boasted of having "hired a very bright lady on energy."

Asked her name, he said that he couldn't pronounce it and that she was "Indian."

Gibbons' energy adviser, appointed Wednesday, is Hatice Gecol, who is Turkish.