Gov. Guinn readies for ‘State of State’ speech

Brendan Riley

Thursday, Jan. 14, 1999 | 5:15 a.m.

CARSON CITY, Nev. -- Gov. Kenny Guinn will present a $10 billion-plus budget and outline his goals on Monday as he gives his first "State of the State" speech to Nevada lawmakers.

The Republican governor planned to spend the weekend fine-tuning his speech. But no last-minute changes were expected in the budget plan - it was in final form at the printer by midweek, so that copies could be distributed on the same day of Guinn's address.

Guinn wasn't providing much in the way of new details in advance, although his goals for Nevada in the coming two years - including no new taxes - had been stated clearly during a long campaign capped by his election last November.

"He's not going to soften his speech or evade any issues," said Guinn press secretary Jack Finn. "He will roll up his sleeves and be as forceful as he can."

Guinn's expected bare-bones budget assumes $3.2 billion in state general fund revenues, mainly in sales and casino-related taxes and other collections. The rest of the funding will come largely from federal sources.

He's trying to keep a lid on spending partly because of uncertainty over Nevada's casino-dependent economy now that California voters have approved a major Indian gambling initiative.

The state's expenditures must match its revenues, so there's no mystery about the total spending he envisions. The only mystery - until Monday's speech - is the exact percentages and amounts for major spending categories.

Based on the current budget that was approved by the 1997 Legislature, Guinn will propose spending more than half of the money for public schools, community colleges and universities.

Roughly a quarter of the budget is likely to go for human services programs - although there's some concern already because of advance word from Guinn that he'll cut some of those programs.

Public safety, mainly Nevada's burgeoning prison system, accounts for the third largest spending category. In the current budget, public safety takes about 11 percent of available money.

Combined, those three categories account for about 90 percent of all state general fund spending.

While Guinn says a potential budget shortfall has resulted in decisions to cut or hold the line on some government programs, he isn't expected to suggest any major new taxes or tax increases. However, in virtually all budgets over the years, some fee hikes are included.

Guinn also may talk about a long-term plan for revamping Nevada's tax structure. He already has said fundamental changes to that tax structure are needed to ensure adequate services in the nation's fastest-growing state.

The governor already has said he has no plans for pay hikes for state workers because of the projected shortfall - and that in turn has prompted one employee group to question the projections.

"We're not short of money," says Bob Gagnier of the State of Nevada Employees Association. "But in Nevada it's a grim picture. It's being painted that way so they can get the programs they want and get rid of the ones they don't like."

Gagnier predicted that in April new projections by Nevada's Economic Forum would show extra money and set off a late-session frenzy by lawmakers for pork-barrel projects.

Some Democratic lawmakers also have expressed concern about Guinn's education spending plans - even though Guinn, a former educator, has said schools are a top priority for him.

The legislators fear Guinn may try to end guaranteed funds for class-size reduction programs and just put the money into general public school funding. That's viewed as a softening of a mandate to cut class sizes that had been pushed for years by former Democratic Gov. Bob Miller.

Guinn also has said several state agencies and some child and family-related programs face cuts to cover a shortfall that could hit $135 million.

The governor also said he foresees no layoffs of state employees. A hiring freeze was imposed several months ago by Miller because of the shortfall concerns.

While the 1999 Legislature won't convene until Feb. 1, review of Guinn's spending plan will start immediately. Combined Senate Finance and Assembly Ways and Means committees are scheduled to hold their first meeting on Tuesday, a day after the "State of the State" speech.

Other elements of Guinn's spending plan are likely to include:

-A state building program that includes a $50.7 million, 1,000-bed addition to a 1,000-bed, medium-security prison under construction south of Indian Springs in southern Nevada. Another $10 million is included for a mental health hospital in Sparks.

-A plan to reform the financially ailing health insurance plan that covers state workers. Mismanagement by an outside vendor resulted in a huge backlog of unpaid claims, and the program has run millions of dollars into the red.

-A call for shrinking or restructuring the state's bureaucracy. Without such an effort, Guinn has said he wouldn't favor any new taxes for individuals or businesses - including the casino industry that gave him heavy financial backing in his $5.3 million campaign.

-Continued efforts by the state to help senior citizens; and continued opposition to a federal, high-level nuclear waste dump at Nevada's Yucca Mountain.