Gibbons: Jobless fund nearly broke, Legislature to blame

By Cy Ryan

Tuesday, Sept. 8, 2009 | 1:42 p.m.

CARSON CITY – Nevada’s unemployment fund will soon be broke because of the state’s record unemployment, but Gov. Jim Gibbons said Tuesday that he opposes raising the tax on employers that helps pay for jobless benefits.

Nevada will have to begin borrowing $100 million a month from the federal government once its unemployment fund is depleted, which is expected by the end of this month or early October.

“The fund is spending $40 million a week,” said Gibbons, who blamed the tax increase by the Legislature for adding to unemployment in Nevada.

The unemployment fund is partly supported by the tax on employers based on the wages paid to a worker. The average rate this year is 1.3 percent on $26,000 in wages.

The unemployment rate in July was 12.5 percent, the third highest in the nation.

Gibbons told reporters initially he “doesn’t see going to the employers’’ since they have been hit with taxes imposed by the Legislature. He later amended his statement to say the he doesn’t make recommendation to the state’s Employment Security Council that meets Oct. 6

The governor said 48 other states have had to borrow from the federal government to keep the checks flowing to the jobless.

The state ended up $31.6 million short in the tax revenue it was projected to collect last fiscal year. Gibbons said he won’t know until November the tax collections for the first quarter of this fiscal year and what actions to take

He said he doesn’t know if cuts in government can be made further by his administration or if he will have to call a special session of the Legislature.

“I do not want to call a special session,” he said. He said he hopes such things as the federal stimulus funds and a turnaround in the economy will help.

On the possibility of U.S. District Judge Brian Sandoval resigning to run against Gibbons in the Republican primary election, the governor said, “Welcome to the fight.” He didn’t know why Sandoval was leaving a life time appointment.

But the governor said Sandoval, when he leaves the bench, should be questioned about his vision for the future of Nevada.

Asked about some criticism that federal stimulus dollars are going to rural areas and not the populated cities like Las Vegas and Reno, the governor said the projects are “shovel ready” in many of the smaller counties.

He said he will make sure the state is following the federal requirements and if there is a per capita rule on where the money is spent.