Las Vegas Sun

December 18, 2014

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Guinn announces state belt-tightening

CARSON CITY -- Gov. Kenny Guinn said he plans to delay spending on certain construction projects and new equipment for state agencies in an effort to keep Nevada's budget out of the red.

The governor, who has already placed a freeze on hiring new state workers, also said his cabinet officers would suspend all non-essential travel.

Guinn on Thursday delivered a "State of the Economy" address, which was televised statewide. He followed the speech with a press conference, during which he gave few specifics on what steps he would take to keep the government solvent.

It's premature, he said, to talk about calling legislators back for a special session, and he said Nevada is well positioned to weather the economic downturn.

He said he wants to get a better handle on tax revenues before taking specific action.

"I'm not going to overreact," he said during the news conference.

Guinn stressed the point that he was not laying off state workers. He said about 1,400 vacant positions won't be filled, and about 87 new jobs would be frozen, with the exception of those involving health or safety programs.

Evidence of an economic rebound does exist, he said. "We've stopped the decline," and things are starting to move upward, he said. Last weekend in Las Vegas the hotel occupancy rate was 70 percent, and the weekday occupancy rate so far this week has improved over the prior week, he said.

Las Vegas Deputy City Manager Steven Houchens agreed that the economy will bounce back, although how far remains in question.

"There's a lot of uncertainty, but based on what we know today we see the economy recovering," he said.

Based on the number of new building permits issued in July and August, coupled with lower interest rates, Houchens said development in the Las Vegas Valley would likely continue.

"There are good signs, but there are ominous signs out there, too, with consumer confidence and the stock market ... . I tend to agree (with Guinn) that within some period of time we will be back to pretty strong levels," he said.

Houchens said the city is in good shape; officials expected growth to slow and acted appropriately in budgeting for the coming fiscal year.

"We're in a pretty good position, short-term, but if it goes into a more longterm scenario, we'll have to take a look at secondary measures," Houchens said.

Clark County Commission chairman Dario Herrera said he believed the governor's speech provided some comfort to the thousands of casino employees who recently lost their jobs.

"I think the governor clearly demonstrated his compassion for the dislocated workers and their families, and certainly outlined initiatives that could help them during this very difficult time," he said. "I think it was absolutely comforting; he clearly demonstrated an understanding of the issues."

Said North Las Vegas Councilman William Robinson, "(The economic downturn) might hit us harder than any other city. We just believe that we will persevere."

State Budget Director Perry Comeaux told the media that the state collected $8 million to $10 million more than expected during the past fiscal year.

Guinn said the state had close to $140 million in a "rainy day" fund, which could be used during an emergency. To do that, however, he would have to call the Legislature into session, a move he said he is not yet willing to make.

He's not directing the state to spend any more on tourism advertising until he sees the results of a promotional blitz planned by Las Vegas and Reno.

Guinn said he would develop a list of projects that may be delayed. For instance, he said $4 million to $5 million could be saved by postponing technology improvements. "A wait of one more year would not disturb the budget," he said.

He said handling layoffs of those employed by private and service industries -- most of the workers affected live and work Las Vegas -- is more difficult than the changes he has ordered for state government.

Last week there were 5,549 claims filed for unemployment benefits, compared to 2,922 the previous week. More than 1,000 claims were filed on each of the first three days this week.

Guinn said he has authorized training for 40 new state workers, who will process unemployment claims. He said the state is relaxing a rule that requires someone who is out of work to prove every week that they are looking for employment.

He said people, such as maids and cab drivers, should not be forced to spend money on gas and other items associated with a job search. "We don't want them using up their reserve funds," Guinn said.

During his 10-minute, somber address, Guinn said he has asked financial leaders to consider rearranging pay schedules for unemployed people who may be in jeopardy of losing their homes. He requested the state's utilities to expand assistance programs for those unable to pay electric or natural gas bills because they are unemployed.

The University and Community College of Nevada's Board of Regents was asked to consider helping displaced workers with tuition costs. He also said he is working with the federal government to help those enrolled in welfare employment training programs retain child care benefits and housing assistance. The state is participating in a program with the Culinary Union to consolidate at a single location community charities and programs for displaced workers.

"I am confident Nevadans will again reach out and help their friends and neighbors in need," the governor said during the televised speech from his office in Carson City. "Because now is a time of giving more of ourselves than ever before."

Sun reporters Diana Sahagun, Adrienne Packer and Mathis Winkler contributed to this story.

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