State leaders await Guinn’s budget-crunching

Erin Neff

Tuesday, Dec. 31, 2002 | 11:23 a.m.

Gov. Kenny Guinn is busily crunching numbers and writing down financial options in longhand this week as he tries to decide which tax hikes to include in his biennial budget.

The governor is carefully guarding his proposal, saying he will not discuss specific details of his plans yet, except to say that it is his only priority.

"(First lady) Dema jokingly says I go to bed with the budget and wake up with it," Guinn said Monday. "I am putting a lot of thought into the budget process trying to come up with the best way to deal with our current budget process while at the same time planning for Nevada's future."

Guinn will unveil his plan to address his estimated $800 million budget shortfall during his State of the State address Jan. 20. He spent the weekend in the office crunching numbers and analyzing data with chief of staff Marybel Batjer, officials said.

"I don't think I've ever seen anyone more focused on any one job than he is right now on the budget," Greg Bortolin, Guinn's press secretary, said.

Guinn has held several strictly off-the-record talks about his thought process, but he has not discussed anything specific with other state leaders.

Senate Majority Leader Bill Raggio, R-Reno, said he has had very few talks with Guinn about the budget process, and has even fewer details.

"I do know that he's working very feverishly on it," said Raggio, who had lunch with Kenny and Dema Guinn recently. "I don't have the details; he hasn't spelled them out to me."

Assembly Speaker Richard Perkins, D-Henderson, also met recently with Guinn and said he will spend the coming weeks before the State of the State address waiting to see which decisions Guinn makes.

"The governor has a difficult task ahead of him," Perkins said. "I'm going to wait and see what he has to say."

Guinn, who will be inaugurated Monday for a second term, has been talking about the budget for months in very general terms -- and with numbers some other politicians and business leaders question.

The governor has repeatedly said this budget -- and the legislative session that begins Feb. 3 -- will be a referendum on what type of state Nevadans will have in the future.

After the Economic Forum revealed its financial forecast for the state, Guinn announced that Nevada will need $800 million in new revenue just to fund existing programs.

Raggio said one detail Guinn has mentioned about the budget is how he arrives at the $800 million figure.

Guinn has also hinted that Nevada needs to raise money for additional programs.

During the campaign, Guinn received an endorsement from the Nevada Education Association after promising to raise per pupil student spending to the national average in his next budget.

But during the same campaign Guinn also declined to discuss specifics on tax policy, relegating the analysis of various options to the appointed members of the Nevada Task Force on Tax Policy.

That panel of eight citizens representing various aspects of the community -- from gaming to mining and small business -- recommended a hodgepodge of taxes, highlighted by a one-quarter of 1 percent levy on business gross receipts over $350,000.

Guinn has examined the task force's recommendations, but he is not necessarily committed to including the entire proposal in his budget recommendation.

He has already expressed trepidation about the gross receipts tax, in part due to how quickly the business community recoiled from the proposal.

The governor has not yet discussed what options he may include in his budget if the gross receipts is not included. At one point he said it was a better option than simply increasing the gross gaming tax, but on another occasion he said he was not sure if it was the best solution.

Guinn has expressed support for increasing taxes on cigarettes and alcohol, and will reportedly ask the Legislature to immediately approve those hikes to help balance the budget.

Guinn will also use at least $110 million of the state's $136 million rainy day fund to balance the current budget, and could possibly ask the Legislature to approve $50 million to replenish the rainy day fund.

The rainy day fund is essentially the state's emergency account, tapped to fund everything from fighting wildfires to providing emergency monies for such projects as offsetting costs in the medical malpractice crisis.