Budget tips for state get reply

Higher taxes on mining, gambling or sales won't improve Nevada's dismal budget outlook.

But cutting state employees' pay and reducing spending on education might.

That's according to Gov. Jim Gibbons in a letter responding to suggestions by government employees on how Nevada should cope with a deep recession that's wreaked havoc on the state's economy and its budget.

Gibbons said that increased gaming taxes would cause casino layoffs and closures, and that "adding to unemployment is no better for gaming than it would be for state employees."

An increase in the mining tax would require two separate votes of the people, as would another employee suggestion, enacting a personal income tax. This couldn't be accomplished before 2012, Gibbons stated in the letter.

Increasing the sales tax might merely steer consumers to the Internet, the governor suggested.

Gibbons spokesman Dan Burns said the letter addresses more than 1,000 responses from state employees to the governor's request for money-saving ideas.

The governor did not dismiss further reductions in state employee pay or in spending on education.

"If any further (pay) reductions are needed, we will share them with you," Gibbons said about himself and his staff.

State employees are already furloughed one day per month.

Education spending consumes 54 percent of the state's general fund, he wrote, adding, "we cannot continue to take virtually all of the budget cuts out of the remaining 46" percent.

Revenue is estimated to be $67 million below projections for the July through September quarter of the fiscal year. New numbers could come Jan. 22, when the state's economic forum is scheduled to report its estimated revenue projections, Burns said.

The forum typically meets in advance of regular legislative sessions to provide information for lawmakers and the governor to craft a budget. Burns said the upcoming meeting was scheduled to provide Gibbons with projections to help him decide whether legislative action in a special session is needed to bring expenses in line with revenue.

Former North Las Vegas Mayor Mike Montandon, who is challenging Gibbons in next year's Republican primary, called some of Gibbons' statements "incredibly short-sighted."

Montandon, who works in government affairs for a Florida-based construction company that does business in Nevada and other states, agreed that pay cuts for state employees should be on the table.

"I work in the private sector. Everybody I know is taking a pay cut," he said. "The company I work for laid off 30 percent, and everybody left got a pay cut."

Montandon described as short-sighted Gibbons' statement that "whether we support Yucca Mountain or not, we could not begin receiving royalties on nuclear waste storage soon enough to use that revenue as a viable solution to our fiscal problems."

The proposal to store spent nuclear waste at Yucca Mountain in Nye County has been politically unpopular statewide because of safety concerns.

But Montandon said Gibbons doesn't mention the possibility of the area becoming a research site to study reprocessing of nuclear waste to make it safe to store.

"Just developing the technology to reprocess nuclear waste would be 20 years and billions of dollars in great jobs," Montandon said.

Democratic gubernatorial candidate Rory Reid described Gibbons' letter as a publicity stunt.

"I think his approach is ill-advised. What he's doing is worrying about his re-election," said Reid, chairman of the Clark County Commission.

Reid said the governor should focus on creating jobs and improving the economy so that drastic cuts to education aren't necessary.

"The answer to Nevada's problems clearly is not cutting education and doing less for our children," Reid said. "There needs to be a discussion about what we can do today to put people back to work."

One source of short-term job creation is an estimated $1.5 billion in federal funds from the American Recovery and Reinvestment Act, also known as the stimulus law.

Reid said the state, under Gibbons' leadership, has been slow to direct the money to job-creating ventures.

"The state's effort with respect to the stimulus has been mired in partisan politics," Reid said.

Assembly Speaker Barbara Buckley, D-Las Vegas, complimented Gibbons for reaching out to state employees for ideas to save money.

But she disagreed with his implication that education has been spared cuts up to this point, citing a 13 percent cut to higher education as an example.

She said further cuts could hurt students, especially if they were to occur when school is in session.

"It would be unfair to the students, and I think in the end, harmful to economic recovery," Buckley said. "When you look at what businesses want, they want a well-educated work force."

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.