Gibbons Reassures City and County Officials He Won’t Make Up State Budget Shortfall with Local Funds
Submitted by on Mon, 02/01/2010 - 5:33pm
CARSON CITY – Gov. Jim Gibbons said today he will not seek to use local government funds to make up a state budget shortfall that ranges between $900 million and $1 billion.
Gibbons did propose a measure taking some local property tax revenue, four cents per $100 of assessed value, to help balance the state budget in his original 2009-11 spending plan. This was approved by the Legislature as part of the final budget.
But Gibbons said he has no plans to do so again, or look at other local pots of money, in the current budget crisis. The budget shortfall is expected to require a special session of the Legislature later this month or in early March.
Gibbons said he would not seek to touch a $4 billion public works fund in Southern Nevada that has been used to build roads, water improvements and schools.
Las Vegas Oscar Goodman, who attended the meeting in the capital, said he came away reassured that Gibbons has no designs on local tax revenues.
“He made a commitment to us he was not going to bother us if we don’t bother him,” he said.
Asked if the Legislature had the same position, Goodman said: “That’s another story.”
Gibbons said after the meeting it is possible that some cuts would flow to local government entities, but only as a trickle down from state budget reductions. Reducing spending on Medicaid, for example, would mean less Medicaid money flowing to local governments.
This type of local government impact was cited as a concern by Clark County Manager Virginia Valentine during the meeting because of the effect on the University Medical Center, Gibbons said. Valentine participated via videoconference.
Gibbons said he will outline a response to address the shortfall in his state of the state address on Feb. 8. He will also spend time describing just how severe and challenging the shortfall is for the state to deal with.
Gibbons said he is also considering further salary cuts as well as requiring state employees who are not taking furloughs to take the equivalent cut in salary.
Salary cuts don’t raise much money if they are imposed on state workers only, he said. A one percent cut in salary across the board however, including public teachers, would generate $30 million, he said.
But at $900 million, salary cuts alone won’t get the job done, Gibbons said.
“You can’t balance this budget on the back of salary reductions; that is just never going to work,” he said.
Layoffs are also a distinct possibility in the second year of the budget, Gibbons said.
“It may be we are now considering layoffs, very painful layoffs,” he said.
Gibbons said he is also looking again at phasing out the Nevada State Prison in the capital as a way to save money, but said closing Ely State Prison is not an option.
Closing nonessential facilities, going to a four-day work schedule and sweeping every account to generate money to balance the budget are all on the table, he said.
“There are no sacred cows when you have a billion dollar shortfall,” Gibbons said.
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