Guinn still arguing over extra funds

Thursday, April 29, 1999 | 11:24 a.m.

CARSON CITY -- On the eve of the Economic Forum, Assembly Democrats and Gov. Kenny Guinn were at odds on how much extra money will be available in tax revenue for the state to spend in the next two years.

The forum, a group of five financial experts, meets today to estimate collections on tax revenues for the biennium. The initial estimates were made in December and the forum will fine-tune that forecast.

Nevada's economy has rebounded since December. The question is whether there will be a continued upward trend.

What the forum predicts will mean whether a lot of state programs and requests from special interests will be funded. The forum hears testimony from experts from the state budget office, the Legislature and gaming and tax agencies.

Estimates from Guinn's budget division and the legislative staff are $65 million apart.

After hearing the economic forecasts, the forum makes its decision. The Legislature and Guinn must abide by the forum's estimate in passing a balanced budget.

Assemblyman Richard Perkins, D-Henderson, said the legislative fiscal staff estimates there will be $95 million more than predicted in December in tax revenues in 1999-2001. Guinn predicts tax collections will be $34 million higher than originally forecast.

Perkins said the Guinn administration is being "overly conservative" and added that he thinks they are "trying to sandbag us."

Perkins said he suspects Guinn wants to influence the forum into making low predictions so that the Legislature won't have the chance this session to spend the money. This would permit a surplus to build during the interim, and that would allow Guinn to decide in 2001 how that money should be allocated.

Guinn's Chief of Staff Pete Ernaut said, "It's imperative that we remain conservative so the Legislature does not overspend."

In 1991, Gov. Bob Miller had to slice $176 million from the budget because of a downturn in tax revenues. Guinn this year had to reduce the budget by $140 million because of lower than expected tax collections.

"That's twice in the last eight years," Ernaut said.

Whatever the estimates, Perkins said the leadership in the Legislature is "committed to staying away from the pork," referring to special projects financed by the state.

Perkins said he wants to pump more money this biennium into education. Clark County School Superintendent Brian Cram made a persuasive case that the Guinn budget actually reduces the financial support per child, he added.

The governor agreed to put only enough money into the University and Community College System of Nevada to permit a 2 percent growth, Perkins said. He said he would like to put more money in that system, which predicted it would have 6 percent more students.

Perkins said the economy has rebounded in Nevada in recent months. "The Asian market is coming back," referring to the Oriental high-rollers that are returning to play in Las Vegas casinos. In addition, new resorts will be opening this year, drawing in more customers.

Two years ago, the Economic Forum predicted higher revenues. But much of the tax money did not materialize, forcing Guinn to reduce on-going programs, continue a freeze on state hiring and not give any pay increases to state workers, school teachers and university and community college faculty.