CARSON CITY — As Gov. Jim Gibbons and top Nevada lawmakers prepare for a private meeting on revenue shortfall estimates nearing $800 million, educators and others who already faced 4.5 percent budget cuts aired concerns Monday about more reductions.
The shortfall projected by mid-2009 would be four times what Gibbons had estimated last fall. When he imposed the 4.5 percent cuts in January, the figure had grown to more than $500 million, mainly because of lagging sales tax and other revenue collections.
It’s probable that Gibbons soon will look at more budget cut plans, and leaders of Nevada’s K-12 public schools and university college systems are concerned because the January reductions are costing them nearly $151 million.
“With the first go-around, we pretty much exhausted all the easy-type cuts,” state public schools chief Keith Rheault said. He added that more cuts could lead to reductions in staffing for athletics or other non-teaching programs.
Jim Rogers, chancellor of the state university-college system, said the system can’t take more cuts because “at this point, we’re standing on the ledge of absolute destruction and permanent injury.”
“You can’t close people’s learning down,” Rogers said. “The issue is much more fundamental than the amount of money. When are we going to stand up and do what’s right?”
Rogers favors a renewed push for a special legislative session to find new funding sources. That’s something Gibbons, who ran on a no-new-taxes program in 2006, has opposed repeatedly. Senate Majority Leader Bill Raggio, R-Reno, has joined Gibbons in opposing a special session on taxes.
Howard Skolnik, director of the Nevada prison system that had to reduce prison spending by $25 million under Gibbons’ 4.5 percent cuts, said he hopes a move to lease out the state’s 500-bed prison in Jean will generate revenue to help in the event of more cuts.
Without a viable lease in the coming fiscal year, Skolnik said a shutdown of some other institution “is the only way realistically to absorb additional reductions.” He added that staffing cutbacks would create unsafe conditions for inmates and employees.
The state’s Department of Health and Human Services had to cut about $82 million under the 4.5 percent plan, and Mike Willden, head of the agency, said Monday, “Certainly with additional cuts we would have to look at a possible reduction in present client services.” He didn’t elaborate.
Gibbons, Raggio, Assembly Speaker Barbara Buckley, D-Las Vegas, and state Budget Director Andrew Clinger are among those expected to meet to discuss the looming shortfall.
Raggio said Friday that the estimates, based on a continuation of the slump in tax collections this fiscal year, could even surpass $800 million — but even at that the state wouldn’t be as bad off as more than two dozen other states facing economic problems.
In developing their shortfall projections, analysts for the governor and state lawmakers have tracked gloomy reports on major revenue sources, including a March 7 Gaming Control Board report showing a 5 percent drop in the casino win in January compared with the same month a year ago.
By the end of next week, a critical report on January sales is expected. The most recent sales report, showing a 1 percent decline in December, came out at the end of February.
Despite the various reports, Gibbons has said he hopes the state’s economy will turn around. Economists say a new boom in Las Vegas megaresort construction could improve revenues dramatically starting in 2009.
Late Monday, the governor said he would meet with the media March 31 to discuss worsening economic conditions and what actions he might take. “To be quite honest, it is a concern to me the number is growing,” he said of the budget shortfall. “It is not just Nevada, it is nationwide.”
Review-Journal Capital Bureau Chief Ed Vogel contributed to this report.