Legislator says cuts need OK

CARSON CITY -- A state law requires Gov. Jim Gibbons to secure approval from the Legislature's Interim Finance Committee for his plan to cut state spending by 4.5 percent, a state senator said Wednesday.

Sen. Bob Coffin, D-Las Vegas, said the general appropriations bill approved by the Legislature in June contains a provision that allows governors to cut spending but also requires them to secure the legislative committee's approval of any cuts if budget reserves fall below $80 million by the end of the fiscal year.

That could give Democratic lawmakers in the Assembly, who have been critics of the cuts, power to reject them.

Legislative Counsel Brenda Erdoes agreed with Coffin's assessment of the law in an opinion letter she issued on Dec. 6.

"I think we are headed to the Supreme Court if he (Gibbons) doesn't allow the Legislature to participate," Coffin said. "What they are doing may be unconstitutional."

Gibbons' lawyer, Joshua Hicks, said the legal issue is complicated but former Gov. Kenny Guinn did not need legislative approval in 2002 when he made budget cuts. Hicks added that whether the reserves will fall below the $80 million threshold after Gibbons makes his cuts in January is unclear.

If they do not, then Gibbons, as Guinn did, will present only an information report on the cuts at the Jan. 24 Interim Finance Committee hearing. The report would not require legislative consent, Hicks said.

Coffin expects Gibbons will try to finagle the timing of budget cuts to avoid falling below the $80 million threshold.

Under the two-year, $6.8 billion budget approved by the Legislature, leftover funds, or reserves, are projected to stand at $179 million when the fiscal year ends June 30. The reserves are not the same as the state's rainy day fund, an emergency account that contains $267 million.

But Gibbons plans next month to announce how he would cut state spending by $440 million over the next 18 months.

About $284 million would come from state agencies reducing their spending and the remainder from the state's rainy day fund, according to statements made by Gibbons.

The rainy day fund appropriation would not be made until the entire Legislature goes into session in February 2009.

Assemblywoman Sheila Leslie, D-Reno, said the law is "murky."

"We are looking at it right now," she said. "There are loopholes. But why would he not consult the Legislature? What is his motivation for keeping what he is doing secret."

State Budget Director Andrew Clinger and Deputy Attorney General Randal Munn mentioned at a Tuesday District Court hearing in Carson City that the state appropriations act would require Interim Finance Committee approval of Gibbons' plan to cut state spending.

Clinger told District Judge James Todd Russell that the cuts would be discussed and approved at public hearings.

But neither told the judge that legislative approval would not be required if the $80 million threshold were not reached.

At the court hearing, Russell rejected a request by the Reno Gazette-Journal to release lists prepared by state agency directors showing how they would make budget cuts.

Gibbons had requested the cut lists. The newspaper has decided not to appeal Russell's decision to the state Supreme Court, said Scott Glogovac, a lawyer for the newspaper.

Munn said Wednesday that he had no obligation to tell Russell about everything in the budget reduction law and that it was not required, in context of the judge's questions, to mention the $80 million threshold.

He said Russell had asked Glogovac to explain whether Legislature had any role in determining budget cuts. When the Gazette-Journal lawyer had no answer, the judge turned to him for help.

"I pointed out (the law) provides a procedure where the IFC is supposed to approve them," Munn said. "It wasn't the objective of the court to delve into the statute."

If Gibbons does need Interim Finance Committee approval at its Jan. 24 meeting, then he will have a hard time securing it without first working with Democratic legislators.

The committee consists of the seven members of the Senate Finance Committee and the 14 members of the Assembly Ways and Means Committee.

Approval of any matter requires the consent of a majority of the Senate members and the Assembly members. Four of the seven senators are Republicans, but nine of the 14 Assembly members are Democrats, including Leslie and Assembly Speaker Barbara Buckley. Both have been critical of Gibbons' plan to cut state spending.

Coffin has asked Erdoes to determine what action legislators could take if Gibbons balks on allowing them to review and approve his cuts

The provision requiring legislative approval of budget cuts has been inserted in every state budget act since 1993, said Lorne Malkiewich, director of the Legislative Counsel Bureau.

Legislators inserted the provisions into budget acts after the 1991 session, when Gov. Bob Miller on his own volition made budget cuts during a recession.

Leslie said that Guinn worked with legislators when he was forced to make budget cuts after the Sept. 11, 2001, terrorist attacks but that Gibbons has tried to "keep his cards secret."