Guinn to tighten government programs

Friday, Dec. 4, 1998 | 11:13 a.m.

CARSON CITY -- Gov.-elect Kenny Guinn says he will slash programs, not raise taxes, to solve a looming $120 million deficit facing state government in the coming two years.

Everything except aid to public schools will be considered for reductions to achieve a balanced $3.1 billion budget for 1999-2001. "Everything is on the table," Guinn told reporters during a briefing on the state's gloomy financial picture.

Even his modest campaign promise of an extra $3 million to increase tax rebates to senior citizen home owners and renters may wait, he said.

Guinn rejected tax increases as part of the solution. "I committed myself," he said. "People are not ready for tax increases. We will tighten our belts."

Raises for state workers, school teachers and university faculty may not be possible either. Guinn said a 1 percent pay increase would cost $19.5 million a year. And that's not even figured into the $120 million deficit.

The Economic Forum, which met earlier this week, forecast the state will collect $3.1 billion in taxes in the next two years. Guinn said that existing programs plus those approved by the 1997 Legislature will gobble up $3.2 billion.

That means there's a deficit before Guinn starts to consider new or expanded initiatives in state government.

The law requires he submit a balanced budget to the Legislature. By Dec. 15, he must present a preliminary or base budget. The full budget must be presented Jan. 18.

Guinn, his chief of staff, Peter Ernaut, and Budget Director Perry Comeaux made it clear there won't be many holidays for them this month as they set their spending priorities.

About 54 percent of the state budget goes to aid to public schools and the University and Community College System of Nevada. Guinn said he wants to protect the public schools and the university from reductions. But he made it clear his first priority is kindergarten through 12th grade.

While Guinn laid out the problem, he didn't have any answers yet where the reductions will be made. Ernaut said the administration is "at the stepping-off point now," and faces a "monumental task" of shaving enough money to achieve a balanced budget.

The governor-elect said, "We've got to go through everything," but added, "We have to look outside education."

Guinn finds himself in a position similar to Sen. Richard Bryan when Bryan took over as governor. Bryan rejected any pay raises for state workers, shifted around collection of tax revenues so they would come in faster to meet payroll. He also raised some taxes.

Bob Gagnier, executive director of the 4,500-member State of Nevada Employees Association, which is seeking a 10 percent raise, said he believes there is "more than sufficient revenue based on the Economic Forum to provide employees with adequate pay raises."

Gagnier said salary increases for state workers do not have to be tied to school teachers. "It was Dr. Guinn who said that was unfair, and why is he proposing to perpetuate it?" In recent years, the governor and Legislature allocated enough money for similar pay raises for teachers, state workers and university faculty.

Assemblyman Morse Arberry, chairman of the Assembly Ways and Means Committee, said he's optimistic the economy will rebound. "I'm not saying we have to cut until we have the whole picture," he said.

Arberry, D-Las Vegas, says he doesn't want to retreat on any of the programs approved in 1997. He said the governor-elect has been given the budget figures, but Arberry won't see them until Jan. 19, when his committee starts meeting on the budget.

Guinn says the "base budget" for the coming two years is $3.1 billion. That includes all the present agency spending plus the amount needed for additional students in public school and the university system, welfare numbers and prison inmates.

Some $63.6 million is needed to fund programs approved by Gov. Bob Miller and the 1997 Legislature that are supposed to start in the next biennium. These include opening of the Veterans Home in Boulder City, a juvenile hall in Clark County, the Family to Family program to help parents of young children and Nevada Check-Up for insurance of children of the working poor.

Another $21.4 million is needed for "rollup costs" for such things as increases in electric, water or telephone bills or higher postage rates, Guinn said. And the state must spend $20.9 million in the next two years to meet increasing federal mandates in new or expanding programs.

Those expenses, totaling $3.294 billion, do not even take into account inflation. For instance, Guinn said, the state provides so much for a school book, and there is no room in the budget to increase that amount, despite their rising cost.

State agencies presented budget requests in September of $4.1 billion, and Comeaux has already ordered cuts of $900 million.

There won't be any cash for construction of university projects and state facilities such as prisons in the coming two years. So the state will have to issue bonds. Comeaux said about $150 million in bonds could be issued without raising the 15-cent state property tax rate.