Gibbons: Feds should give states direct economic aid

By David McGrath Schwartz (contact)

Thursday, Oct. 30, 2008 | 3:59 p.m.

CARSON CITY -- Gov. Jim Gibbons wants the federal government to provide money directly to state governments, echoing a call that Democratic governors from New York and New Jersey made on Wednesday.

Gibbons called for Congress to pass an economic stimulus package that would extend unemployment benefits, earmark money for transportation projects to create jobs, and increase funding for Medicaid.

Gibbons, who was a congressman before taking office in 2006, has been known as a small government conservative, and has stood by his pledge not to raise taxes.

Asked if this was a shift for Gibbons, his spokesman, Ben Kieckhefer said: “It’s impossible to know how Congressman Gibbons would’ve voted for it.

His perspective has changed when it comes to looking out for the best interests of Nevada. When you’re chief executive, you have a different perspective than say, when you’re on the board of directors.”

In a letter sent to Nevada's three members of Congress and two senators, Gibbons points out the state’s unemployment rate of 7.3 percent “is expected to climb much higher.”

He also argues that a “significant investment in infrastructure” would create jobs.

“The State of Nevada has many needed infrastructure projects designed and ready to go, and an infusion of capital from the federal government can be put immediately into Nevada’s economy to help address the needs of Nevada workers, as well as improve the infrastructure in our state.”

His comments echoed those made by Democratic governors from New York and New Jersey on Wednesday in front of a congressional committee.

Conservatives and the White House have been critical of new economic stimulus packages. White House spokeswoman Dana Perino just said Thursday that infrastructure spending is no help because it doesn’t create jobs fast enough.

The state has already cut $1.2 billion in spending during the current budget cycle. As it prepares its budget for the next two years, Gibbons has asked departments to prepare 14.12 percent cuts. As revenue forecasts have worsened, some believe the cuts could climb to as much as 20 percent compared to the legislatively approved amounts in 2007 and 2008.

At those rates, some observers believe, the state could struggle to provide basic government services. Gibbons campaigned on a promise not to raise taxes, and has given no indication he would waver from that.

Kieckhefer said that the request for federal assistance is not an acknowledgement that the state can’t make due with the money it has.

“If the economic stimulus doesn’t pass, is state government going to shut down? Of course not,” Kieckhefer said. “It would be additional help to take better care of our citizens right now.”

Kieckhefer said the governor supported the $700 billion Wall Street bailout passed by Congress as “unappetizing, but probably necessary.”

He said he hoped that any plan to help state governments would be viewed differently.

“This is getting people to work. This is more of a tangible benefit that would hopefully be felt on the street,” he said.

Sun reporter Lisa Mascaro contributed to this story.