Legislature close to agreement, Gibbons says

CARSON CITY -- Gov. Jim Gibbons, after meeting for an hour with Democratic and Republican leaders of the Legislature, said Friday they're close to reaching agreement on a budget balancing plan.

Assembly Speaker Barbara Buckley said if a deal is done by Friday evening, the lower house will pass a budget bill -- and if it's not she'll put forward the Democratic plan for consideration.

Buckley said her budget bill would include $100 million from mining, a foreclosure fee that would be charged to banks when a home is foreclosed, a four-day work week for state workers, 5 percent cuts to education and a small contribution from the gaming industry.

"Obviously, we have 28 seats in the Assembly, we can pass any bill that we want," Buckley said of the two-thirds majority for Democrats.

The bill would then go to the Senate where it could be amended, then sent back to the Assembly.

The gaming industry has balked at paying a proposed $32 million in fees a year to support the Gaming Control Board, but legislative sources told the Las Vegas Review Journal that lawmakers can bridge the revenue gap without casinos pitching in. Another plan calls for raising $4.2 million in gaming license investigation fees.

Gaming industry lobbyists were testifying in the Senate to explain why casinos believe they can't pay more, saying the industry lost $6.7 billion in revenues last year and laid off more than 30,000 people.

Gibbons said his goal is to finalize a deal Friday in order to adjourn the special session on its fourth day, although it's unclear whether Republican and Democratic lawmakers can bridge differences on spending cuts and revenue-raising schemes that quickly.

"We're close to reaching agreement," Gibbons said after emerging from the meeting in Buckley's office.

Also in the meeting were Senate Majority Leader Steven Horsford, D-Las Vegas, Senate Minority Leader Bill Raggio, R-Reno, Assembly Majority Leader John Oceguera, D-Las Vegas, and Assembly Minority Leader Heidi Gansert, R-Reno.

Horsford and Buckley, who have been working closely together on a Democratic plan, have said they want to end the special session as soon as possible, partly because it costs $50,000 a day to keep meeting.

Gibbons didn't outline any deal to fill an $887 million budget gap, but said it might not be necessary to get more revenue from the gaming industry, which has balked at paying more.

"We have yet to figure out whether or not gaming is needed in this picture," Gibbons said. "That will depend on the actual numbers we are resolving between now and three o'clock."

Gibbons and lawmakers planned to meet again Friday afternoon.

Lawmakers have accepted about half of Gibbons' budget proposals, including cutting most state agency funding by 10 percent. But Democrats are restoring spending on social services and want to reduce the potential cuts on education to as low as 5 percent.

Indeed, Gibbons said the biggest issue to resolve is how much can be cut from education.

"The biggest one is just exactly what is the actual reduction to K-12 or to higher education," Gibbons said. "We're going to resolve that and come to a finite number this afternoon. Then we'll know for sure how big the remaining budget gap is."

Assembly Democrats want to cut state funding for K-12 and higher education by only 5 percent instead of the 10 percent that Gibbons has proposed, while Republican lawmakers have said they could agree to a 7.5 percent reduction in state spending on education.

Buckley seemed open to negotiation on education after the Gibbons meeting. She suggested on the Assembly floor Friday that lawmakers look at reducing administrative costs for education instead of reducing the number of teachers or increasing class sizes.

There also are differences on how to raise more revenues to balance the budget. Mining is expected to add $100 million to the general fund, but gaming has refused to agree to a proposal to charge casinos $32 million a year to pay for Gaming Control Board operations.

Gibbons said Friday he liked a new idea from Republicans in the Assembly to collect $91 million by selling revenue from the state's unclaimed property funds -- a proposal Democrats don't like.

After the meeting with Gibbons, Oceguera said Democrats were willing to sit down to craft a deal with Republicans and the governor.

"We all need to get in a room and figure out how we get to an end," Oceguera said.

Contact reporter Laura Myers at lmyers@reviewjournal.com or 702-387-2919. Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901. Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.