Proposed salary cuts criticized


Educators weren't bashful Friday about calling for tax increases to prevent cuts of 6 percent to teachers' salaries.

"Whatever it takes," said Ruben Murillo, the president of the Clark County Education Association, the local teachers' union.

"The governor has the gumption," he continued, noting that Nevada ranks low among states for tax burdens. "He can look at increasing alternative sources of revenue."

The Review-Journal confirmed Thursday that Gov. Jim Gibbons in his State of the State address next week will propose cutting the salaries of state employees and teachers by 6 percent in an effort to balance the state budget and avoid layoffs.

It was unclear exactly whom the cuts would apply to under the plan by Gibbons, who through a spokesman said he was legally bound not to comment. However Bill Gang, a Supreme Court spokesman, said the Nevada Constitution stipulates that the salaries of Supreme Court justices and district court judges could not be reduced.

Terri Janison, president of the Clark County School Board, said she is a registered Republican who believes the state cannot "keep cutting and cutting" its way out of a budget crisis.

Although Janison does not have specific ideas about how the state could increase its revenue, she added, "I will tell you my philosophy: If you want services, you're going to have to pay for them."

Walt Rulffes, the superintendent of the Clark County School District, described taxes for education as an investment.

"Most tax dollars that go into local education end up in the cash registers of local business," he said.

If state revenue is inadequate, Rulffes said "it's likely the Legislature will consider taxes as an option to deeper cuts in essential services."

State Sen. Barbara Cegavaske, R-Las Vegas, encountered upset educators when she expressed skepticism Friday of their demand to raise taxes on the mining industry.

At a morning meeting of parents, educators and state lawmakers at Leavitt Middle School, one principal in particular "was mad I didn't go along with her," said Cegavaske. "She didn't want to hear anything else."

Cegavaske wanted educators "to consider all the facts" before singling out one industry for a tax hike. She recalled that Nevada lost many rural banks when it imposed a banking tax during a financial crisis in 2003. Cegavaske believes the state's mining industry could suffer the same fate.

Meanwhile, a Gibbons' spokesman said the governor would be the first person to accept a 6 percent cut to his $141,000-a-year salary to prevent state employees from being laid off.

"He and every member of his staff will take salary cuts," Daniel Burns said.

Democratic leaders oppose the 6 percent salary cut but have yet to release their own plan to deal with the decline in state tax revenue.

Assembly Speaker Barbara Buckley, D-Las Vegas, said Thursday that the Legislature first will review state agency spending, set spending priorities and determine the amount of available revenue. Then decisions will be made on tax increases to cover costs of necessary services.

As it stands, Buckley said, the Democratic leadership has not determined whether tax hikes will be necessary. She does intend to review tax exemptions and abatements granted to businesses over the years and decide whether they should be continued.

But Gibbons intends to keep his vow to veto any tax increase unless it has the support of the public or affected industry, according to Burns.

Once a review of state spending is completed, Buckley said, citizens will be shown the tradeoffs that will result if taxes are not raised and cuts must be made.

For example, they might tell voters that the state has to close prisons and let out inmates or to shut rural Nevada hospitals, if taxes are not increased.

Their review could take several months.

Senate Minority Leader Bill Raggio, R-Reno, said Friday that he was reserving judgment on whether he could support 6 percent cuts in salaries.

"Tax increases are a last resort. We want to try to avoid layoffs, but cutting salaries would be very difficult to get a consensus on."

Assembly Minority Leader Heidi Gansert, R-Reno, said she can understand why the governor is looking at salary cuts. A 6 percent cut could save the state $400 million over two years, she said.

"It is either cut jobs or cut wages. Everyone in private industry is having a hard time. People are losing jobs everywhere."

Senate Majority Leader Steven Horsford, D-Las Vegas, did not returns calls for comment. But Senate Taxation Chairman Bob Coffin, D-Las Vegas, said it is clear that taxes must be increased to keep salaries and services intact.

"Why not tax escort services and prostitution?" he asked. "We tax all other vices. Why not consider everything?"

Coffin wants to impose temporary increases on gaming, sales and other taxes. The temporary increases would remain in effect until the economy recovers, the state pays off its loans and the rainy day fund and other reserve funds are replenished, he said.

The Gibbons' administration maintains it can spend no more than $5.65 billion over the next two-year budget period, a figure that is 34 percent less than the $8.1 billion that it has estimated would be necessary to keep services at current levels.

The Progressive Leadership Alliance of Nevada on Monday will announce its support of $1.2 billion in tax increases that it believes are necessary to keep essential services.

Although not giving details, PLAN spokesman Bob Fulkerson said the plan includes increasing mining taxes.

The $5.4 billion mining industry pays only $30 million a year in net proceed of mineral taxes to the state. Nevada mines produce nearly 80 percent of U.S. gold.

Contact Las Vegas Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901 and reporter James Haug at jhaug@reviewjournal.com or 702-799-2922.

 

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