Rory Reid: Balance state budget by cutting agencies

CARSON CITY -- Democratic governor candidate Rory Reid said state workers and agencies might not like his plan to continue unpaid furloughs, eliminate many administrators and consolidate government, but extreme steps are necessary at a time when Nevada's economy is teetering.

"This isn't something I enjoy doing," Reid said. "It is an aggressive agenda. We need strong leaders to stand up and tell the truth and provide a plan to make Nevada a better place."

In the Moving Nevada Forward plan he unveiled Thursday, Reid describes how he thinks Nevada can realize $2.5 billion in savings through cuts and revenue growth in the next two years -- without raising any taxes or reauthorizing the $800 million in taxes that expire June 30.

He calls for cutting the budgets of the state controller's and treasurer's offices by 50 percent and the Supreme Court's budget by 25 percent, placing the Department of Motor Vehicles and Taxicab Authority within the Nevada Department of Transportation, putting state government on a four-day work week and continuing the unpaid furloughs and wage freeze for state workers.

Reid also expects the state economy to recover enough in the 2012-13 budget year to more than cover a projected $615 million revenue decline.

The Reid proposal was attacked by the Republican contender for governor, Brian Sandoval, and aides to lame-duck Gov. Jim Gibbons, who lost the June primary to Sandoval.

"Since Rory's plan relies on $615 million in revenues which don't exist and over half a billion in cuts which are based on faulty assumptions, it's impossible to take this plan seriously," said Sandoval, who has enjoyed a lead over Reid in polls.

"It's fuzzy math," said Lynn Hettrick, Gibbons' deputy chief of staff and the former Assembly minority leader. "There are a whole lot of things that just don't add up. This is an election piece. It isn't going to fix the budget problem."

Sandoval, who will debate Reid in Las Vegas on Sunday, has not announced an extensive plan to balance the state budget and revive the economy.

In January, he released a short-term plan that included a 4 percent cut in state worker pay, including teachers, and a reduction in state contributions to the Public Employee Retirement System.

Sandoval came out against tax increases.

He proposed raising hundreds of millions of dollars by selling state buildings for a large sum of money and then leasing them back, a step critics likened to taking out a loan.

The Reid plan got unexpected support from the conservative Nevada Policy Research Institute.

"There are a lot of good ideas in it," said Geoff Lawrence, an analyst with the Las Vegas-based think tank. "I am supportive of the plan."

Lawrence said that Reid wants to implement many of the ideas from the Sage Commission, a Gibbons-appointed group that recommended ways to improve government efficiency.

Lawrence said Reid needs to provide more details on the savings he expects to achieve.

Hettrick said Nevada ranks 50th in per capita spending on state government, according to a U.S. Bureau of Labor Statistics' study, and Reid "extrapolated" his savings from the savings achieved in wealthier states when they started cost-saving initiatives.

He objected to Reid's characterization that Gibbons helped cause the "worst budget shortfall in the nation" through "George W. Bush mismanagement and years of postponing tough decisions."

Hettrick said Gibbons wanted to cut spending more in 2009 and vetoed the budget approved by the Democrat-dominated Legislature, but lawmakers overrode his veto.

State Budget Director Andrew Clinger said Reid expects to save $31.9 million by consolidating agencies and eliminating administrative staff, but those agencies altogether do not receive $31.9 million in general fund money.

Clinger said he did not know how the controller's and treasurer's offices could do all of the work they are obligated to do with 50 percent cuts.

A spokesman for Controller Kim Wallin said she had not yet reviewed the Reid plan and declined comment.

In an interview, Reid said he would not insist on such large cuts if the agencies can show their work raises more revenue than would be saved if their budgets were reduced.

He agreed he must rely on Economic Forum revenue projections to put together a budget, but Reid said the forum's projections are "only estimates, too."

The group of five private business leaders will meet by Dec. 1 and project revenue for the next two fiscal years.

Reid said he is encouraged that the economy is on the verge of recovery because $5 billion in renewable-energy projects are under construction or on the verge of being constructed. The projects potentially could bring the state more than $1 billion in new revenue a year, he said.

Clinger questioned Reid's projections and said renewable-energy projects will employ few people.

Clinger expects to prepare a two-year budget of about $5 billion, about $1.5 billion less than the current two-year budget. His budget, which can be revised by the next governor, would continue furloughs and include a 10 percent cut in state agency spending.

But he contended Reid wants to cut prison spending by triple the 10 percent cut being prepared by his office.

Even with a 10 percent cut, Clinger expects 3,000 of the 14,000 prisoners in Nevada must be released.

Hettrick said if the state released more than that, then violent criminals would be on the streets and the public's safety would be jeopardized.

Assembly Majority Leader John Oceguera, D-Las Vegas, called the Reid plan "pretty solid."

"It is similar to what we are developing in the Assembly," said Oceguera, who is expected to become Assembly speaker in 2011. "We want to eliminate programs that are not working, save through efficiencies and require accountability from state agencies. We need to get Nevada moving in the right direction."

Oceguera said it is "too early" to tell whether the Legislature can balance the budget without tax increases.

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