Governor: Rainy day fund may be used

Wednesday, Sept. 11, 2002 | 9:35 a.m.

CARSON CITY -- If the Nevada economy continues to sag, Gov. Kenny Guinn said, he may have to drain more than $100 million from the state's rainy day fund.

Guinn said Tuesday he would have some decisions by Thursday on where he will reduce the spending of state agencies.

Guinn is trying to achieve a 3 percent overall reduction in the spending. The toughest areas, he said, are in health services and prisons.

Guinn initially had planned to take $100 million from the Rainy Day fund with permission from the 2003 Legislature, when he thought there would be a $275 million shortfall in tax collections. Legislative financial experts, however, say it could be as much as $325 million.

Guinn said Tuesday's report saying collections from the state gaming tax for the first two months of this fiscal year were down 7 percent was troublesome. The budget is built on an increase this fiscal year of 3.9 percent, he noted.

Guinn's chief of staff, Marybel Batjer, said the governor is going over the suggested reductions carefully.

"These are important decisions and he doesn't want to make them on the fly," Batjer said.

Guinn said he was irked by comments by Sen. Bob Coffin, D-Las Vegas, who suggested the governor should have looked at the rainy day fund when the Legislature was in special session earlier this summer.

Coffin said he asked the governor to put the reserve account on the agenda of the special session to permit the governor to draw down the money.

"The cuts (to state agencies) might not have been 3 percent. Maybe they would have been 2 percent," Coffin said.

Guinn's comments came Tuesday after a meeting with Batjer, other staff members, state Budget Director Perry Comeaux and Deputy Budget Director Andrew Clinger.