Guinn weighs state’s economic options

Tuesday, Sept. 25, 2001 | 9:50 a.m.

CARSON CITY -- Gov. Kenny Guinn huddled with his economic advisers Monday, but he said it's too early to determine whether cutbacks in state government are needed in the wake of an economic downturn after the Sept. 11 terrorist attacks.

"I hope to have something in a week to 10 days," the governor said. "I want to see the occupancy rates," of the hotels in Las Vegas before making a move.

The 2001 Legislature approved Guinn's suggested spending program, which calls for a flat two-year budget for state agencies.

"So, you can't say there should be a 5 or 10 percent across-the-board cut," because the budgets are sparse already, Guinn said.

The governor met for about two hours with Chief of Staff Marybelle Batjer, state Budget Director Perry Comeaux, Deputy Budget Director Don Hataway and economist Bill Anderson, of the state budget office.

There is still much information to gather before taking any steps, he said. He said he also wants to confer with Assembly Speaker Richard Perkins, D-Henderson, and Senate Majority Leader Bill Raggio, R-Reno, to discuss the fate of the state's economy.

"When you don't know, you batten down the hatches," Guinn said, referring to the uncertain economy. But, he added, "The stock market rally (Monday), that helps."

The governor said he wants to learn whether occupancy rates at Las Vegas hotels rose to 65-70 percent this past weekend. If they did, he said, that would be a "good sign."

Still, he said, about 240 organizers have canceled plans for conventions in Southern Nevada during September and October. He said there hasn't been any falloff regarding convention business in November, however.

He also wants to learn how much of their budgets state agencies failed to spend last year, as that money reverts to the general treasury. Those numbers won't be available for a week to 10 days.

He noted the bulk of Nevada's economy emanates from Clark County, which has experienced a rash of layoffs, particularly in the gaming industry.

While attending a college football game at the University of Nevada, Reno Saturday, Guinn said he watched eight commercial aircraft land. He hoped they were filled with visitors.

A "rainy day" fund, which includes more than $136 million, also exists. The governor and Legislature can dip into the fund, if necessary.

According to the law, that money can be used if the Legislature and the governor declares a fiscal emergency. The fund can also be tapped if tax collections fall short by 5 percent or more of the "total anticipated revenue for the biennium in which the appropriation is made."

The "stabilization fund" was created in 1991 after the state suffered an economic downturn, which precipitated layoffs and spending cutbacks.

One possibility this time would be holding some of the newly created 400 state jobs temporarily vacant.

The governor also said that he will develop several contingency plans, based on a variety of scenarios. But, he said the economy in Nevada depends largely on what happens nationally and internationally.

If consumer confidence is restored in the near future, Nevada should be able to survive a short-term downturn without taking drastic measures, state officials say.

Meanwhile the state Commission on Tourism intends to ask the Interim Finance Committee for emergency funds today to initiate an advertising campaign designed to lure the visitors to Nevada.