Guinn warns of immediate cuts if no interim tax

Cy Ryan, Jennifer Knight and Emily Richmond

Friday, March 21, 2003 | 11:25 a.m.

CARSON CITY -- Nevada's public schools and higher education system probably will have to make immediate spending cuts if the Legislature does not pass the so-called "bridge taxes" by April 1, Gov. Kenny Guinn said today.

Guinn also said he has cautioned education officials to be prepared to make budget cuts during the next 3 1/2 months to enable the state to make it until June 30. University regents said the worst-case scenario is that some classes might have to be canceled mid-semester.

Clark County School District officials were already facing potential cuts of $220 million over the next two years, a possibility that has district officials scrambling to rally public support for Guinn's budget plan.

Agustin Orci, deputy superintendent of instruction for the Clark County School District, said this morning he had not yet been briefed on Guinn's latest predictions but was anxiously waiting for an update. It's been tough enough to consider hundreds of millions of dollars of cuts over the next two years, Orci said. Being forced to trim the budget before the end of the fiscal year in June could be "devastating," he said.

The decisions on reductions will be made in the next nine to 12 days as the governor reviews how the war is affecting tourism, lifeblood of the state's revenue system.

Guinn said he met Thursday with Clark County School Superintendent Carlos Garcia and Washoe County School Superintendent Jim Hager.

"We've protected them as long as we can," said Guinn, referring to the decision not to reduce state aid to schools this fiscal year.

He said the two superintendents "understand and they have been cooperative." He said he would be talking with them every day next week. Garcia and Hager were meeting today with other school superintendents to explain the situation.

Guinn has also conferred with Chancellor Jane Nichols of the University and Community College System to advise her the system will also have to make further reductions in its budget.

University system institutions have already been hobbled by cuts made earlier last year. Guinn asked state agencies last August to give back 3 percent of the operating funds that were allocated to them during the 2001-2003 Legislature.

As a result fewer classes were open to students this semester, maintenance was cut back and positions that were needed to sustain student services were not filled, university officials said.

Further cuts could be even more detrimental, Board of Regents Chairman Doug Seastrand said.

Seastrand said the worst-case scenario is they would have to cancel classes midway into the semester.

"That is one of the more unbelievable things that we might have to do is to cancel existing classes and say, 'I'm sorry, we don't have the money to continue,"' Seastrand said.

"There just aren't a lot of places to get money from," Seastrand said. "We are at the point where we would have to cannibalize programs."

Employees represent the largest expense for university and community colleges. Even if faculty or staff had to be laid off, the system would have to buy out their contracts, which would be more expensive, Seastrand said.

Guinn had recommended the Legislature impose "bridge" taxes on cigarettes, liquor, restricted slot machines and the business activity tax to start April 1 to help the state limp financially through the year.

The Senate Finance Committee Thursday tapped $135 million from the rainy day fund to help the state. That bill could be passed next week but would leave only $1 million in the fund. But that may not be enough for the state.

The Senate and Assembly taxation committees so far have been reluctant to approve the "bridge" taxes.

Marybel Batjer, chief of staff for Guinn, said state Budget Director Perry Comeaux is contacting agencies to see where additional reductions can be made in the next few months.

Both Guinn and Batjer said it was difficult to make these cuts to achieve the revenue needed in a few months.

There is no estimate now of how much might have to be reduced. The longer the wait, the deeper the reductions, Guinn said.