Legislators: Businesses must help cut deficit

CARSON CITY -- Democratic legislative leaders want businesses to pay voluntarily hundreds of millions of dollars in taxes and fees to cover part of the state's $887 million revenue shortfall and reduce a planned $200 million cut to public education.

Mining, gaming and other private industries "must be part of the solution," said Senate Majority Leader Steven Horsford, D-Las Vegas, on Wednesday. "Our schools are at peril, and we are looking at thousands of layoffs. They need to offer a meaningful solution."

Horsford said legislators must pass their own spending cut plan during next week's special session because the proposals from Gov. Jim Gibbons to cut public education spending are too severe. Funds must be found to prevent massive layoffs in education, he said, adding that state parks could be closed, although he does not want that to happen.

"We will have to do the job because this governor hasn't done it," said Horsford, who delivered the Democratic response to Gibbons' State of the State address and has become his party's go-to guy on the special session.

Business representatives confirmed they are participating in talks with legislators and Gibbons about paying taxes, fees or some type of assessments to reduce the shortfall. But they think the amount being sought is too much.

"You will find a history of the gaming industry stepping in some fashion to give to the state," said Alan Feldman, a spokesman for MGM Mirage, the largest casino operator on the Strip. "Too often we have been the only industry to come forward. There are a couple of proposals that have been put forward."

Under one proposal, the gaming industry would fund the Gaming Control Board, the state agency that regulates gaming. The agency's budget is about $63 million over two years.

Jim Wadhams, representing the Nevada Mining Association, said his organization continues to talk with state officials about kicking in money, but the $100 million figure that has been bandied around is "astronomical." Gibbons proposed taking $50 million from mining in his special session proclamation.

"There is no question that gold mining companies are doing well," said Wadhams, who expects an announcement on the business contribution before the special session starts Tuesday.

Daniel Burns, Gibbons' communication director, confirmed that the administration is talking with businesses about contributing more revenue and that the governor backs plans to have industries such as gaming pay regulatory costs. He said the governor would support any fees, taxes or revenue increases that are backed by the affected businesses.

Horsford would not disclose how much he expects businesses to contribute, but sources said some legislators want $100 million from the mining industry and as much as $200 million from other businesses.

They also want to beef up the Insurance Division with additional auditors and try to collect $90 million in overdue insurance premium taxes.

And they want to cut by 15 percent the $236 million the state spends on private contracts for janitorial services, building rental fees and consultants.

Senate Minority Leader Bill Raggio and Assembly Minority Leader Heidi Gansert, both R-Reno, said they were unaware of the talks with business leaders.

Gansert questioned how legislators could ask businesses to pay higher taxes during a recession. The state is suffering from an unemployment rate of 13 percent, one of the highest in the nation, and has the highest home foreclosure rate in the nation.

"Being in the minority, we are not privileged to hear all of the conversations," Gansert said.

The Democrats control both the Senate and the Assembly.

Raggio said Gibbons' proposed cuts are "extreme" but could have been worse if legislators last year had not approved $800 million in temporary tax increases, over the governor's vetoes..

Despite the insults traded by Gibbons and Democratic leaders such as Horsford, Raggio said legislators are working with the governor's staff and are trying to reach agreement on a spending reduction plan.

Gansert said many legislators hope the Nevada State Education Association will agree to reopen contracts and permit at least a 3 percent reduction in teacher pay. That could prevent many layoffs, she said.

"We need to ask teachers to be part of the solution," Gansert said.

Lynn Warne, president of the Nevada State Education Association, said the Legislature should order school districts to open their books so that employee unions can determine whether other funds exist that can be used to avoid layoffs.

Contract talks have not been completed in the Clark County School District for the current year for administrators, school bus drivers and other groups, she said. Talks have begun on teacher contracts for the next year, and Warne said there is no need to reopen negotiations because they are already under way.

"The school districts need to show they are bringing all resources to the table," Warne said. "I don't think they need now to be repaving parking lots or athletic tracks."

Horsford would not say how much of a cut would be acceptable for public education, nor would he announce when legislators will release their list of proposed cuts.

He said there needs to be a "shared sacrifice" by all interest groups. Some teachers will be laid off, and business needs to sacrifice by contributing more to the state during this economic crisis, he said.

Shutting down the state's 21 state parks would be "terrible," but not as terrible as decimating education and laying off teachers, Horsford said.

David Morrow, state parks division administrator, said none of the state parks in Nevada is supported entirely by entrance fees, but Valley of Fire State Park and Lake Tahoe State Park at Sand Harbor come close.

Morrow said the total state appropriation that parks receive is $5.3 million a year. Park attendance is more than 3 million a year, including many tourists who visit Valley of Fire during Las Vegas vacations.

"There is no way to close Valley of Fire," Morrow said. "The resources there would be susceptible to vandalism."

Burns said Gibbons opposes closing any state parks because of their popularity with residents and tourists.

Gibbons' message to Horsford is that he needs to let school boards, administrators and parents work out how to reduce spending without harming the education of children, Burns said.

"It isn't incumbent on him to stand on a soap box and whine," Burns said.

Contact reporter Ed Vogel at evogel@reviewjournal.com or 775-687-3901.