CARSON CITY — Nevada legislative leaders emerging from a closed-door meeting with Gov. Jim Gibbons today insisted that nothing more can be cut from the state budget, even though a shortfall of at least $2.4 billion might face them when the Legislature next goes into session in 2011.
“What would you cut?” asked Senate Majority Leader Steven Horsford, D-Las Vegas. “Fifty-five percent of the budget is for education, 20 percent for health and human services. We cut all we could cut in the last (2009) session.”
“I would be hard-pressed to cut" the budget, added Senate Minority Leader Bill Raggio, R-Reno. “There isn’t a lot to cut.”
Raggio said if lawmakers reduce public school spending they might face litigation for not adequately funding education.
The shortfall might occur because $780 million of the $1 billion in tax increases approved in June expire in 2011 unless renewed by the next Legislature.
In addition, $400 million in federal stimulus funds used this year to plug holes in the budget will not be available.
And budget analysts contend that at least $1 billion in additional spending will be needed to keep up with further growth in Medicaid and other programs.
But so far in the current fiscal year, state tax revenue is just $8 million short of the money needed to cover the current $6.9 billion two-year general fund budget.
Gibbons left the meeting through a back door before he could be interviewed by waiting reporters.
According to handouts given legislators by state budget officials, the state’s unemployment rates will peak at 13.7 percent in August 2010 before starting to decline. Nevada now has a 12.5 percent unemployment rate. Gibbons already has applied for a $264 million federal loan to cover unemployment benefit costs for the remainder of the current calendar year.
But Raggio said he might need to request another $800 million to cover unemployment costs in 2010. He added that more than 20 states also are seeking federal loans to cover unemployment.
Contact Review-Journal Capital Bureau Chief Ed Vogel at email@example.com or 775-687-3901.