Gov. Jim Gibbons announced today he will deliver a special State of State speech on Feb. 8 to discuss the budget crisis estimated at nearly $1 billion and call for a special legislative session.
His announcement follows a meeting Friday of the state Economic Forum, which slashed Nevada's projected revenues for the current two-year budget cycle by $580 million. When education guarantees are factored in, the shortfall balloons to the $1 billion mark.
Daniel Burns, Gibbons' communications director, said the governor's office has been holding meetings to come up with ideas on how to cut expenses, but would not reveal details of those discussions, other than to say, "We ain't raising taxes."
"Society has changed. The way people live has changed. And government needs to change as well," Burns said.
In a written statement, Gibbons said: "It is irresponsible to spend money we don't have, the state simply must reduce spending. The time for legislative hearings and other delays has long since past, it is time for decisive action and that is what I plan to do."
The first-term Republican who is seeking re-election has been having informal open office hours with lawmakers every two weeks to talk about the state's budget woes. The third of such meetings is scheduled Tuesday.
Assemblywoman Sheila Leslie, D-Reno, said there's "not much appetite" to raise taxes as Nevada continues to suffer under the recession that's been punctuated by record unemployment, a collapsed housing market and depressed tax revenues.
Analysts last week said Nevada's economy, heavily dependent on sales and casino taxes that rely on tourists and discretionary spending, will remain troubled for the near future.
"We're really in unprecedented times here in Nevada," Bill Anderson, chief economist for the Nevada Department of Employment, Training and Rehabilitation, told the five-member Economic Forum. "The recovery, when it does unfold, will likely be relatively slow and relatively choppy."
Leslie said legislators are planning public hearings to discuss ideas, and said lawmakers and the governor have to work together.
Budget cuts are inevitable, she said.
"I think it's going to be painful. It could be as much as 22 percent of our state budget that we're short."
Gibbons in December asked state agency heads to develop plans for cutting 6 percent, 8 percent and 10 percent of their budgets. At the time, he said all options were on the table, including possible layoffs, salary cuts, extended furloughs and reduced government hours.
Earlier this month, he unveiled an eight-point plan to overhaul the state education system that would eliminate laws mandating class size reduction, full-day kindergarten, and local government and school district collective bargaining.
Under the state constitution, the governor, who has waged a war of words with Democratic lawmakers in control of the Legislature, sets the agenda for what is considered during a special session.
Democrats hold a 28-14 margin in the Assembly and a 12-9 margin in the Senate.
Last week, Gibbons partially blamed Democrats for Nevada's financial crisis, saying Nevadans are forced to "endure the consequences" of lawmakers who raised taxes.
Lawmakers cut about $1 billion in spending, but also imposed new taxes and fees to raise a similar amount to balance the $6.8 billion budget they approved over Gibbons' veto. Most new tax increases expire at the end of 2010.
Leslie, vice chairwoman of the Assembly Ways and Means Committee, said she hoped the governor "will be able to set aside his posturing of late" and work with lawmakers.
"A stalemate is not an option," she said.
