Budget shortfall rises day by day

CARSON CITY — Gov. Jim Gibbons is expected to announce today that state spending must be cut by far more than the $60 million to $90 million he estimated on Friday, when he called for a special legislative session to address the budget shortfall.

State Budget Director Andrew Clinger will brief the media today on new projections for the shortfall state government will face between now and June 30, 2009.

Members of Gibbons’ administration wouldn’t speculate on the size of the shortfall.

The governor and legislators already have cut spending by $914 million as tax revenues have fallen.

Gibbons announced last week that he would call the Legislature into a special session on Monday to find a way to continue cutting spending without laying off teachers, state employees and university faculty.

But some lawmakers predicted Tuesday that the special session, which Gibbons says will last no more than five days, will become chaotic and accomplish nothing unless the governor and legislators agree in advance on a plan for cuts.

"Where is his own plan?" asked Assembly Majority Leader John Oceguera, D-Las Vegas. "Every other governor had a plan and agreement with legislators before he called a special session."

Oceguera said Gibbons should have informed legislators earlier exactly how much would need to be cut and proposed how he would make the cuts.

Without specific proposals from Gibbons, Oceguera said, legislative analysts won’t be able to plan for the special session.

Oceguera sent Gibbons a letter Tuesday in which he complained about the governor’s inaction.

"Without a plan for a special session, it will be difficult, if not impossible, to discharge our duties expeditiously and economically," Oceguera stated in the letter.

Gibbons’ chief legal counsel, Josh Hicks, said he met Tuesday with top legislative staff members and briefed them on Gibbons’ "options" for handling the shortfall that will be outlined in the governor’s special session proclamation.

Hicks said legislative staff did not indicate during the meeting that they would not have enough time to prepare for the special session.

Hicks wouldn’t give details on Gibbons’ options, saying only they include:

• Postponing a 4 percent pay raise for state government workers and educators;

• Cutting spending;

• Directing funds that state agencies did not spend in the current fiscal year toward the shortfall.

"We will prepare an agenda for the special session, but we do not want to limit them (legislators) in the options they consider," Hicks said.

Gibbons will not issue a proclamation officially convening a special session until Sunday, according to Hicks.

The governor also will make a televised speech on the need for the special session Sunday evening, according to Hicks.

Oceguera said he still believes the governor and legislative leaders can come up with spending reductions that won’t require legislators to meet in a special session.

Democratic lawmakers are scheduled to huddle this evening in Las Vegas to come up with their own plan for spending reductions to introduce at the special session.

They want to avoid postponing the 4 percent pay increase for state employees, teachers and university faculty on July 1.

Some Republicans also are working on a plan to cut spending without touching the raise.

Senate Majority Leader Bill Raggio, R-Reno, however, is already drawing up a bill to postpone the pay increase one year.

The delay would save the state $130 million.

"That is not going to happen," said Assemblywoman Sheila Leslie, D-Reno.

Raggio and Assembly Minority Leader Heidi Gansert, R-Reno, "are the only legislators I know that are for it," Leslie said.

Hicks said he would not speculate on the size of the budget shortfall.

But Gibbons has scheduled a meeting of the state Economic Forum for Friday.

The group of five business leaders estimates the amount of revenue that will be available to state government.

Four of the five members of the forum are new and will be attending their first meeting on Friday.

Consequently, Oceguera said he wondered what insight they might offer.

As new members, they will not be sure of what they are doing, he said, and will simply rely on the projections given to them by Clinger and legislative fiscal analysts.

Review-Journal writer Sean Whaley contributed to this story. Contact Review-Journal Capital Bureau chief Ed Vogel at evogel@reviewjournal.com or 775- 687-3901.

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