Governor seeks cuts in budget

Wednesday, Sept. 19, 2001 | 10:47 a.m.

CARSON CITY -- In view of the shaky economy, Gov. Kenny Guinn has directed his budget staff to look for ways to curtail state spending this fiscal year.

After the terrorist attacks on New York City and Washington, D.C, state Budget Director Perry Comeaux talked with the governor about not hiring some of the 400 new positions authorized by the Legislature for this fiscal year.

"We already know there will be revenue losses," Comeaux said Tuesday. "The question is how much."

The National Championship Air Races in Reno, one of the biggest tourist draws of the year for Washoe County, was canceled last weekend. The grounding of airlines led to vacant rooms in the hotel-casinos in Las Vegas as the summer tourist season comes to an end. And some airlines have canceled flights into Las Vegas.

Comeaux said the governor asked him to put together some information. "We're going to give him some options to look at -- some things that he can do."

In July, the latest month for a report on gaming revenues, the gross win slipped by 2.3 percent in casinos statewide. And for the last 12 months the revenues rose by only 1 percent.

Comeaux said he expects to deliver his recommendations to Guinn sometime next week. This won't be anything new for Guinn. When he arrived in office, he had to leave 1,000 state jobs vacant in order to balance the budget because of a slip in the tax collections.

Guinn's press secretary Jack Finn said it was too early to decide what might be done. But he said one option might be to beef up the advertising and promotion budget to draw more tourists.

State Tourism Director Bruce Bommarito said his staff is researching what strategy to pursue to make sure the visitor economy holds up. It's too early to know the full impact, he said. But the agency is looking at cuts in some programs to put money in other areas.

He said there could be additional advertisements or media blitzes in tourist-rich areas.

Adding to the problems, AAA Nevada reported Tuesday that gas prices surged in the past month. Since August, the average price of a gallon of regular unleaded self-serve gas in the state jumped 23 cents to $1.67.

And the state Welfare Division reported Tuesday also that for the fourth straight month, the number of those receiving public assistance rose to 21,330 in August, an increase of 4.3 percent from July which had jumped by 5.5 percent.

Economists don't like the short-term view for Nevada.

Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno said, "This is all very bad news in the short term for tourism destinations, especially those that require a person to get on an airplane."

"The tendency is to nest -- to stay close to home."

During the Gulf War, the economy in Nevada dipped, he noted.

The Gulf War was far away "and fundamentally different," he said. This attack was on American soil.

If there is a "long and arduous (combat) process, it could get painful," he said referring to the economy. "We have never experienced anything like this."

Glen Atkinson, a professor on economics at the University of Nevada, Reno and an expert on taxation, noted that some of the high-end players may have taken a bath in the plunge of the stock market Monday. And they may not be able to come to Nevada.

Atkinson said a downturn in visitors could mean less gaming and sales taxes. And it would be a drop in the room tax and also the auto rental tax. At the last session, the state took a bigger share of the car rental tax to help finance pay raises for schoolteachers.

"Depending on the size and duration of people's reluctance to travel, this could be substantial," Atkinson said.