Gibbons, leadership meet, begin working out compromise

An impromptu meeting Friday to discuss federal education funding bloomed into a full negotiating session between Gov. Jim Gibbons and legislative leadership Friday.

After two meetings, the second more than two hours long, in Assembly Speaker Barbara Buckley's office, Senate Majority Leader Steven Horsford emerged to say the group had "made a lot of progress" and would resume meeting after staff worked crunched the numbers on some of the talking points.

Once they receive updates on those numbers, he said the closed-door meeting would resume tonight.

The talks started before noon between Gov. Jim Gibbons and Buckley, D-Las Vegas, over his threatened veto of bill amending state law to qualify Nevada for the Race to the Top federal education funding.

After the talks expanded to other subjects in the plan to handle the state's $888 million budget shortfall, Horsford, D-Las Vegas, Minority Leader Sen. Bill Raggio, R-Reno and Assembly Minority Leader Heidi Gansert, R-Reno, joined the session in Buckley's office.

After the second meeting wrapped up at 6 p.m., Horsford said they planned to work into the night in hopes of resolving remaining issues and reaching a compromise plan that all sides can support.

Gibbons gave few details as he emerged from the meeting a few minutes later, but did say he is backing away from the reductions to mining tax deductions he originally proposed. His original plan raised an estimated $50 million over the biennium. Lawmakers had been looking for ways to basically double that to $100 million.

He also opposes raising the mining claims fee to $125 a year, raising upwards of $20 million.

Gibbons, in an interview on Jon Ralston's Face to Face show, said that is now "off the table" because of concerns about the constitutional, legal issues raised. The Net Proceeds of Mines tax is in the constitution and counsel has expressed some concern changing the deductions could be challenged.

He said it's not needed now because mining is saying the current tax may come in up to $62 million above what was originally projected.

He said he hasn't finally decided whether to sign the legislative version of the educational Race to the Top change, which could qualify Nevada for up to $175 million in education money. He is concerned their plan doesn't go far enough to meet federal requirements that student evaluations be used to evaluate teachers.

Gibbons said he does support the proposed increase in gaming investigation fees because that is asking those seeking a new gaming license to pay their costs.

"We're going to say you've got to pay more of the cost of licensing you," he said.

The plan is designed to raise about $4.2 million by raising the hourly investigative charge for potential licensees from $80 to about $125.

Asked about the gaming industry's adamant opposition to higher taxes on them, Horsford said, "Well, we seem pretty adamant too." But he said earlier in the day it wasn't certain more money from gaming would be necessary to balance the budget.

Gibbons and Horsford both said the GOP's proposal to use the unclaimed property fund to guarantee payments on what amounts to a bond sale was also being evaluated. That source could generate an estimated $91 million to cut the shortfall and Gibbons said he supports the idea.

"I think it's a way for the state of Nevada to fund a large portion of this deficit without having to raise fees or taxes," he said.

The biggest hold-up remains the size of the reduction to K-12 or Higher Education. The governor proposed 10 percent cuts, legislative Democrats 5 percent - a difference of $121 million. Assembly Republicans said they should split the difference at 7.5 percent - which would require $60.5 million in capital beyond the governor's original proposal.

Raggio earlier said the meeting was cordial and that Gibbons and the others "indicated a willingness to try reach an accord as soon as possible."

The size of the education cuts, he said, "have obviously been an issue."

There is apparent agreement to restore some $25 million to eliminate some of what lawmakers have dubbed the ugliest cuts to health and human services programs.