Governor tells budget critics to offer better solution

RENO — Gov. Jim Gibbons challenged legislators who oppose his budget-cutting proposals on Tuesday to come up with a better solution, if they can.

“I am waiting for one of them to tell us their solution,” Gibbons said during a speech to the Reno-Sparks Chamber of Commerce. “Their solution might not be more palatable than ours.”

Even if lawmakers increase taxes, Gibbons doubts they can raise more than a quarter of what he called a more than $2 billion budget shortfall.

“I have no idea where they will find the revenue to match their rhetoric,” he said of legislators who are against his budget proposals.

Senate Majority Leader Steven Horsford and Assembly Speaker Barbara Buckley, both D-Las Vegas, have been outspoken in their opposition to Gibbons’ plan to cut state employee pay and support to higher education. They, along with Assembly Minority Leader Heidi Gansert, R-Reno, also oppose his plan to reduce rates the state pays doctors and hospitals for treating Medicaid patients.

In addition, Assemblyman Tom Grady, R-Yerington, and Pete Goicoechea, R-Eureka, have criticized his proposals to close the Nevada State Prison.

In a joint statement, Horsford and Buckley said late Tuesday that Gibbons and his full-time staff have had six months to work on the budget while lawmakers have had four days of hearings.

“The Legislature, working in a bipartisan approach, will do the job the Governor has failed to do: provide vision and leadership during tough economic times,” it read.

Horsford in an interview said legislators soon will come up with a plan that does not reduce essential services.

Gibbons, according to Horsford, has chosen “mediocrity” by proposing a budget that cuts salaries of teachers who spend their own money buying classroom supplies.

Gibbons told the packed Chamber of Commerce audience that he will not support raising taxes during the current recession, called Nevada’s worst since a mining downturn in the late 1800s.

“We balanced the budget without raising your taxes,” Gibbons said. “If we can do it, they (legislators) can do it. We are doing the best we can with the revenue we have.”

The governor did not mention his support for a 3 percentage point increase in the room tax rate in Clark and Washoe counties, or the plan to take $79 million in property taxes from the two counties and an additional $31 million in taxes from the gaming industry.

He has said he can justify the room tax increase, which would bring in $292 million over two years, because voters in the two counties approved it as an advisory question in the November election. Gibbons has said the counties are in a better position to absorb additional cuts than the state.

Gibbons has submitted a proposed two-year general fund budget of $6.17 billion to the Legislature, 9.3 percent less than the $6.8 billion spending plan approved in June 2007. But the administration estimates it would need to spend $8 billion to keep services at the levels as contemplated in 2007.

To cover the shortfall, Gibbons wants legislators to approve 6 percent cuts in salaries of teachers, state employees and university and community college employees. He also wants to cut the higher education budget by 36 percent.

His speech was received politely by the business group, although a couple of members questioned portions of his budget.

Steven Laden, a Reno businessman, said bright college students will flee to universities elsewhere because of the higher education cuts. He questioned how Nevada can have the educated work force it will need in the future.

Gibbons said higher education was chosen for a big reduction because it is run by the Board of Regents, which could increase tuitions.

Even with the big cuts, state Budget Director Andrew Clinger said 13.7 percent of state spending will go to universities and community colleges. That compares with 11.2 percent nationally.

“The universities can adjust their revenues,” the governor said. “The Board of Regents runs them, not me.”

Clinger added during the presentation that Nevada probably will receive $420 million in additional federal Medicaid matching funds as part of the economic stimulus plan in Congress. That compares with the $108 million estimated by the administration when it prepared the budget.

But Clinger said he did not know whether the additional money will be given to doctors who treat the 194,873 Nevadans who now are covered by Medicaid, the free federal-state medical care program for the poor, elderly, blind and disabled. More than 239,000 Nevadans are expected to be on Medicaid by 2011.

 

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.

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