Gibbons calls for special session, releases budget-cut plans

CARSON CITY -- Gov. Jim Gibbons brought to the table two ideas for generating $80 million in new revenue when he called on Tuesday a Feb. 23 special session of the Legislature to deal with an $887 million shortfall.

The governor proposed increasing revenues from the mining industry by $50 million and allowing a Chicago company to launch a camera-based auto insurance and registration verification program that would net the state $30 million.

By forcing most state employees to work four-day workweeks at 10 hours a day and take a 10-hour unpaid furlough day per month, laying off 227 workers and cutting spending statewide by 10 percent, Gibbons hopes to keep state government operating until the end of the fiscal year: June 30, 2011.

But it wasn't enough for Senate Majority Leader Steven Horsford, D-Las Vegas, who condemned the governor's proclamation proposals as "irresponsible, mean-spirited and calculated to win re-election." He said the proposals would cut public school spending by more than $200 million, which he called unacceptable.

"We have a week to go before the special session, and the cuts to education would have a net effect of laying off thousands of teachers," Horsford said.

He said that the $50 million in additional mining taxes is not enough and that the insurance verification program is one that his staff testified against during the 2009 Legislature.

"No other state has implemented it," Horsford said. "Why does he want to take on such a risky scheme?"

Gibbons expressed confidence earlier Tuesday that he and legislators could reach agreement quickly on the spending reductions. He offered unusual praise to legislators although his relationship with them has been strained for most of his first three years in office.

"I want to give great credit to legislators," Gibbons said. "We are all in this together. These are tough times, but we will get through this together."

But such harsh criticism by the majority leader, who has been the go-to guy for lawmakers, is an indication that the special session could be a contentious one that lasts longer than the two days initially envisioned by the governor.

The additional revenue from the mining industry would not come from a new tax but instead by limiting deductions the companies can take before computing their existing taxes, Gibbons said.

He said he was not breaking his no-new-taxes promise, made repeatedly throughout his term as governor and more recently in the run-up to the special session.

"These are not new taxes," Gibbons said, but "simply clarifying the deductions they are allowed to take."

Tim Crowley, president of the Nevada Mining Association, called the governor's proposal flawed.

"We hadn't discussed it with anybody," he said. "I do think as the Legislature and the governor look at the deductions they are taking from our industry, they'll realize that by doing so they'll be including operating expenses in the calculation of our property values."

Robin Reedy, Gibbons' chief of staff, said the Chicago company, InsureNet, guaranteed Nevada $30 million if it implements its system of photographing license plates and determining whether vehicles are insured and properly registered.

Twenty-two percent of Nevada motorists drive without insurance, she said. The state collects a $250 fine from owners of uninsured vehicles and a $500 fine from each vehicle owner who does not have a valid registration.

A spokesman for InsureNet said the company plans to open an office in Nevada and hire only Nevada residents. Any information collected by the company would go into a national law enforcement computer network, and the company itself would not retain the information.

Currently, InsureNet is not operating its insurance verification system in any state. The company now verifies whether people have medical insurance.

Tom Jacobs, a Department of Motor Vehicles spokesman, said his agency currently conducts insurance verification checks, but there has been a lag time between when a motorist drops insurance and when that company notifies the DMV.

In the next few weeks, the agency will launch the Nevada Live system, which in most cases will allow it to immediately determine whether a vehicle is insured, he said.

Jacobs said he did not know why the governor wants to use a private company to verify insurance just as the DMV is about to start its improved system.

In past sessions, legislators have rejected moves to install cameras to detect speeders and red light violators.

Gibbons insisted the privacy rights of residents would be preserved through the InsureNet system.

According to the governor and his staff, about $12 million in savings would come from implementing the four-day workweeks in most agencies.

Instead of taking one eight-hour unpaid furlough day per month, state employees would take one 10-hour furlough day per month. Those extra two hours would save the state about $6.2 million in salaries.

State officials also expect to save $5.3 million in utility costs by closing some offices one more day a week.

Teachers and professors, who received a 4 percent pay cut last year, would suffer salary cuts of an additional 1.75 percent in July to equalize their pay cuts with those of state employees under the governor's plan.

Pay of teachers in some districts, including Clark County, was not reduced because their districts found other sources of revenue.

Gibbons last year initially discussed starting a four-day workweek, noting such a plan had been launched in Utah. The governor backed off after determining the savings would be too small. But many state workers in Nevada requested a four-day workweek in e-mails returned to the governor after he sought their ideas for savings.

Utah in December announced it would return to five-day workweeks for some DMV offices but found that 82 percent of employees favored the four-day workweek and that 60 percent of the public thought it was a good idea, according to the Salt Lake Tribune.

Savings from the four-day workweek initially were projected to be $3 million a year, but after implementing the plan, Utah saved $700,000.

Gibbons wants to let school boards and the Board of Regents -- which guides the Nevada System of Higher Education -- decide where to cut, but Horsford said Gibbons leaves them no choice but to order layoffs because he wants to cut their budgets.

Horsford would not give a figure for how much he would cut education but said he favors "as small of cuts as possible."

So far, legislative leaders have no plan of their own on how to cut state spending.

Gibbons' proclamation includes several other proposals.

He wants to take more than $12 million that now goes to fund Millennium Scholarships for bright high school seniors. State Budget Director Andrew Clinger said that move would lead to the fund going insolvent in 2014, not in 2019 if the funds were kept.

Gibbons wants to strike state collective bargaining laws to free local governments from binding union contracts as they deal with their own budget shortfalls and remove public school mandates for full-day kindergarten and class-size reduction.

His proposal also includes closing the Summit View Correctional Center in Las Vegas and the 140-year-old Nevada State Prison in Carson City.

Within hours of releasing his proclamation, Gibbons and U.S. Senate Majority Leader Harry Reid, D-Nev., traded insults.

Reid first criticized the governor for not including language in the proclamation to change a state law so that Nevada can apply for a $175 million federal Race to the Top education grant.

"After delaying a decision that prevented our state from applying for the first round in January, Governor Gibbons finally committed to addressing this issue in a special session of the Legislature," Reid said in a statement. "But, it appears he changed his mind. Now, after offering an agenda that would devastate education in Nevada, the governor has failed Nevada students by not committing to address eligibility for Race to the Top."

Gibbons responded by saying he would amend the proclamation to include the Race to the Top plan as soon as he and legislators agree on wording. To apply, Nevada needs to change a state law that prevents teachers from being evaluated based on their students' performance on tests.

"As usual, Senator Reid is shooting from the hip and talking about things he knows nothing about," Gibbons said. "I would urge Senator Reid to go back to reforming health care or meddle elsewhere."

Also absent from Gibbons' list was a proposal sought by the Southern Nevada Water Authority to fix a state law that now possibly voids its applications to pump water from rural Nevada to Las Vegas. A state Supreme Court decision in January found that water rights applications before 2002, including those to siphon the rural Nevada water, are void.

In response to questions from reporters, Gibbons said that the water rights fix could be added to the special session agenda but that his office needed more information from all parties.

"We can't solve the problem without full information," he said. "We are in discussions on that very problem now."

on the web

Special session proclamation

u25B6 www.lvrj.com/proclamation.pdf

Budget shortfall

u25B6 www.lvrj.com/budget_shortfall.pdf

Fiscal notes

u25B6 www.lvrj.com/fiscal_notes.pdf

The Associated Press contributed to this report. Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.