Reconsider on taxes, Jim

David McGrath Schwartz

Friday, Oct. 26, 2007 | 7:26 a.m.

The state's No. 2 Republican broke with Gov. Jim Gibbons on Thursday, criticizing him and other politicians for not being willing to talk about raising taxes.

Senate Majority Leader Bill Raggio, R-Reno, said the state needs to fully look at its tax structure and whether education, social services and other basic services are sufficiently funded. If not, he said, the state should explore ways to increase revenue.

It marks the bluntest break yet by Raggio, who joined a growing chorus of people concerned with the governor's request that most agencies prepare for cuts.

Gibbons has stood by his no-new-tax pledge, even though several officials have said already underfunded programs cannot be cut.

Raggio took a broad swipe at the anti-tax campaign rhetoric.

"Everybody, including advocates for funding now, were saying no new taxes, no increases in taxes," Raggio said in an interview Thursday. "Everyone should quit the political bluster and figure out whether our tax policy is right."

With sales and gaming taxes coming in less than projected, Gibbons recently instituted a hiring freeze for most state positions and requested that departments come up with budget cuts of about $185 million over two years.

Since then, Nevada System of Higher Education Chancellor Jim Rogers, Clark County Commission Chairman Rory Reid, Washoe County officials and Clark County Sheriff Doug Gillespie have either refused to provide suggested cuts or voiced strong concerns.

Raggio's remarks to the Sun on Thursday came as he publicly targeted the governor's proposed cuts.

"There are some services and programs, which are critical, that cannot absorb major cuts, including child welfare, mental health, education and public safety," he said in a statement to the media Thursday.

In it, Raggio also suggested delaying some programs, including the school empowerment program that had been one of Gibbons' major policy initiatives.

Of all the governor's critics, Raggio is the most significant. He has been the Republican lion of Nevada politics, first elected to the state Senate in 1972 and serving as its majority leader for most of the time since 1987.

Breaking with a Republican governor is a rare step for the Senate veteran.

The 80-year-old lawmaker is a party loyalist. Raggio has not spoken in opposition to Gibbons in the 10 months he has occupied the governor's office.

But Raggio comes from an era before intense partisanship and anti-tax fervor became hallmarks of Nevada politics. He sided with former Republican Gov. Kenny Guinn to raise taxes in 2003.

Raggio has been a strong supporter of higher education over the years, often aligning with Rogers, who has called for a business tax to meet Nevada's needs.

Raggio said he didn't mind if his views on reworking tax policy clashed with some of his colleagues'.

"I speak for myself," he told the Sun. "We haven't had a real meaningful tax study for about 20 years. We need a comprehensive review to decide whether revenue levels are right and we're meeting our needs."

Gibbons was not available for comment late Thursday, according to a representative. But she said the governor stood by his anti-tax pledge , which is largely credited with carrying him into office.

"The governor believes that increasing taxes at a time of economic downturn is irresponsible," said Melissa Subbotin, the governor's spokeswoman.

The governor had exempted some departments from cuts, such as the major funding for K-12 education and the Public Safety Department. Under the 5 percent reduction, though, higher education and health and human services would take the biggest hit.

Subbotin said the initial proposal was just a "first step" and should not be construed as any type of final decision.

"We're moving thoughtfully through the process," she said. "We want to make sure we're addressing what appears to be a significant revenue shortfall."

She wouldn't say, though, that any department would be exempt from cuts.

She also denied that Gibbons was becoming isolated, even as local and state officials are repudiating the governor for his fiscal policy.

"Absolutely not," Subbotin said, pointing to support from state Sens. Bob Beers and Barbara Cegavske, two prominent members of the Republican Party's anti-tax coalition.

Beers has called Gibbons fiscally prudent for preparing for budget cuts. He also said that enrollment at the state's two universities was down, and they didn't need as much funding.

He added, though, he didn't support cutting the child welfare programs.

Raggio's statement did back the governor's position on some issues. He said a special session to raise taxes should be a last resort. And he said it was prudent to prepare for lower-than-expected revenue.

But Raggio also said that legislative analysis doesn't predict a continued drop in tax revenue growth.

On Thursday, Washoe County officials and Gillespie also raised their voices to the governor.

Gillespie outlined his concerns to Gibbons in a letter. A sheriff's spokesman wouldn't comment on the contents of the letter. But a county official with knowledge of the letter said Gillespie wants the governor to exempt the county's Juvenile Justice Services Department from the cuts because of the potential effect on public safety.

Washoe County officials have also voiced opposition to the cuts in letters to Gibbons.

Frances Doherty, presiding Family Court judge in Reno, and Mike Pomi, director of Washoe County's juvenile services department, also opposed proposed cuts to juvenile justice institutions in letters sent Thursday to Gibbons.

"We hope that failure to exempt such public safety entities was an oversight which will be corrected," they wrote. "We are opposed to any cuts that impact the safety and security of the general public and of the youth in our community."