Gibbons critical of proposal to lease buildings to investors

CARSON CITY -- Gov. Jim Gibbons on Friday criticized Senate Minority Leader Bill Raggio's plan to reduce some of the state's projected $887 million budget shortfall by leasing state buildings to private investors.

He called the plan impulsive and short-sighted, contending it "merely delays solving our budget problems."

Raggio, R-Reno, told members of the Interim Finance Committee on Thursday that Nevada could secure $250 million by leasing buildings other than the state Capitol. Under the plan, the state would pay rent and other expenses for the buildings for 20 years and then reclaim ownership. The plan, according to Raggio, comes from Brian Sandoval, the former federal judge who is challenging Gibbons in the June Republican primary.

"Sandoval's idea merely delays solving our budget problems," Gibbons said. "Just like kicking the can further down the road, it does no real good for Nevada's working families."

Gibbons said Sandoval's suggestion showed a "lack of leadership experience."

Sandoval fired back late Friday by declaring that most Nevadans will think his idea on leasing state buildings "is better than raising more than $100 million in new taxes, laying off thousands of teachers and cutting vital programs for foster children, mental health patients and senior citizens -- all which the governor is planning to do."

"I have offered a responsible plan to save the state $540 million and am now the only candidate to commit to reducing the gap without raising taxes," he said.

Gibbons takes the position that he is not proposing a tax increase, but supports changing the deductions now allowed before mining companies calculate their net proceeds of minerals taxes. The change he advocates would bring in $50 million, although others want mining to kick in as much as $100 million.

Senate Majority Leader Steven Horsford, D-Las Vegas, commended Raggio on Thursday for proposing a new idea to secure the state money through leases, but Assembly Speaker Barbara Buckley, D-Las Vegas, said a cost-benefit analysis should be done. Like Gibbons, she questioned whether it would save the state money in the long run.

The Legislature goes into special session on Tuesday, but major policy changes such as the one proposed by Raggio traditionally require lengthy debate and study and are not something that can be approved quickly.

Raggio said Arizona secured $735 million by leasing some of its buildings and prisons and California is developing a lease-back plan to secure $2 billion. He said to avoid "ugly" state budget cuts Nevada needs to take actions that in the past would be considered "off the wall."