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AP Photo/Scott Sady
Gov. Jim Gibbons answers questions from reporters after delivering his State of the State speech in the Capitol building in Carson City Monday, Feb., 8, 2010.
By J. Patrick Coolican (contact) 
, David McGrath Schwartz
Wednesday, Feb. 17, 2010 | 2 a.m.
Related Documents (.pdf)
Sun Archives
- Governor’s plan: Layoffs, pay cuts, tax loophole closures (2-16-2010)
- Hundreds attend town hall meeting to weigh in on state budget crisis (2-13-2010)
- Gibbons seems to be backsliding on pledge to not raise taxes (2-13-2010)
- Two Democrats break ranks, call for state tax hikes (2-13-2010)
- Gibbons to sign proclamation Tuesday calling for special session (2-12-2010)
- Crackdown on uninsured drivers weighed to help fill state budget gap (2-11-2010)
- Governor plans emergency address on Nevada budget (2-7-2010)
- Governor’s speech will lay out state’s budget problems (2-7-2010)
- State budget comes up $800 million short (1-22-2010)
- Forecast: Economy will begin to rebound in mid-2011 (1-22-2010)
- Gibbons’ no-talk order further divides branches (1-22-2010)
- Special session may require help of state Supreme Court (1-10-2010)
Sun Coverage
Imagine a game in which there are no winners. Scrabble without vowels. All chutes, no ladders.
That is the situation as the Nevada Legislature meets next week for a special session, made official Tuesday by Gov. Jim Gibbons’ proclamation, to close a $881 million budget hole.
Republicans and Democrats know they will be forced to turn their backs on favored policies and favored friends.
“Certainly nobody wins,” said Eric Herzik, a UNR political scientist.
Democrats and Republicans, conservatives and liberals, interest groups such as mining and labor — all will almost certainly take hits.
Gibbons is calling for 10 percent cuts in most state-funded agencies, including schools and universities. Other reductions include some that are wince-inducing, such as dentures for poor people. State workers will see their pay cut, and 227 will be laid off. Vacancies will be left unfilled.
Democrats are loath to pursue another course, as they don’t have the necessary two-thirds majorities for a tax increase and have no interest in an election-year vote on one. So they will likely swallow hard and make the cuts.
Last week, they faced attacks from labor leaders for capitulating and not advocating a tax increase.
But even those cuts are not enough, forcing Gibbons to acknowledge that he cannot cut his way to a balanced budget. He proposed eliminating some tax deductions for mining companies, the equivalent of a $25 million tax hike on an industry that Gibbons, who has a master’s degree in mining, has long courted and felt at home with.
Indeed, Democrats got something of a respite Tuesday, while it was Gibbons’ turn to take his jabs from both Democratic opposition as well as conservative allies after releasing his plan early in the day.
Last week, in a State of the State speech, Gibbons pleased conservatives with a red-meat barrage on the evils of big government.
But the plan released Tuesday satisfied no one, with the mining industry and conservative anti-tax advocates decrying the increased levies.
Mining companies are taxed on net proceeds but allowed a slew of deductions. Gibbons proposes eliminating some of the deductions.
That’s not a tax increase, he said. It’s merely “clarifying the deductions that they are allowed to take.”
Not so, mining lobbyist Jim Wadhams said. “When more revenue is exacted from any of us, as taxpayers, that’s a tax increase.”
Chuck Muth, president and CEO of Citizen Outreach, which has pressured politicians, including Gibbons, into signing a pledge not to raise taxes or fees, also said it was a tax increase.
“There’s no way to wiggle out of that one,” he said. He compared it to the federal government eliminating mortgage-interest or charitable-giving deductions for taxpayers.
“It’s not that he’s doing it,” Muth said. “It’s denying what he’s doing. To be disingenuous, to propose a tax increase and say it’s not a tax increase, that is what’s most aggravating.”
Robin Reedy, Gibbons’ chief of staff, sounded like a Democrat in her response: “It’s a matter of fairness. The fact is, (mining) pays very little.”
How the mining issue is perceived and resolved could have fatal consequences for Gibbons in his bid to win the Republican nomination for governor. He faces a difficult challenger in former federal Judge Brian Sandoval.
Gibbons received 67,000 votes in the three-way Republican primary in 2006, and nearly 20,000 came from rural counties, where mining is a key industry.
Gibbons took fire from his left, as well.
Danny Thompson, head of the Nevada AFL-CIO, ridiculed Gibbons for proposing that the Legislature eliminate the statute that gives collective-bargaining rights to local public employees, including teachers, firefighters and police. Gibbons and other conservatives hope to rein in public-employee pay by breaking their unions. The idea is “nonsense,” Thompson said, as their pay is not related to the state budget crisis.
“Anyone who thinks otherwise doesn’t understand the state’s budget,” the former legislator said.
Lawmakers attacked some of Gibbons’ cuts. He restored some programs, including housing for the mentally ill, home health care for seniors and 77 new welfare workers to deal with the growing demand.
Other cuts included $35 million from school districts and $9.5 million from higher education, on top of the 10 percent in cuts previously levied against them.
“That’s the wrong way to go,” Assembly Speaker Barbara Buckley said. “We’ve been searching for ways to go the other direction.”
For all of the displeasure among insiders, it’s Nevadans who will bear the brunt of the budget crisis.
Gibbons’ plan proposes 10-hour workdays, four days a week. Many state offices will be closed another day, although details aren’t firm.
The Department of Motor Vehicles, open six days a week, will look at scaling back to four or five days a week, Director Edgar Roberts said. Offices could be closed Sundays, Mondays and Tuesdays, he said.
For prisons, Corrections Director Howard Skolnik has spent the past year saying his department couldn’t institute eight-hour-a-month furloughs for employees without jeopardizing inmate and worker safety.
Gibbons is ordering all departments institute 10-hour furloughs a month — increasing the pay cut for state workers from 4.6 percent to 5.77 percent.
“We’re right on the edge,” Skolnik said. Programs will have to be eliminated, there will be rolling lockdowns and prisons closed, he said.
Health and Human Services Director Mike Willden said he would lobby that welfare offices be spared from closing an additional day each week. The state processes 1,000 applications a day for services such as food stamps, welfare and Medicaid, which many newly impoverished are using to survive.
“The burden and pressure will be too hard to run four days a week,” Willden said.
Nevadans hoping the special session would reform the state’s fiscal structure will have to wait for another day — as they usually do.
The state will have to limp along until the next regularly scheduled session in 2011, acknowledged Buckley.
“I think the plan for lawmakers is to weather the economic recession,” she said. “The economy will begin to rebound. It’s just a matter of when ... You cannot remake your state financial structure in a week. I think people underestimate the amount of consensus needed to remake the state’s financial structure.”
Gibbons’ spokesman Dan Burns said, “I don’t view it as simplistic as kicking the can down the road. But there is some truth to the fact that we will have serious budget issues in 2011.”
By then, the deficit is projected to be $2 billion to $3 billion.
No win situation is an accurate way to describe all of our incumbents in the next round of elections! None of 'em are gonna win reelection! They ALL failed us and we will throw the bums OUT of office!!!!
Throwing out the incumbents will not miraculously make more money appear in the state coffers. The economy is destitute and the tax revenues with it.
You have two choices. Cut spending or raise taxes. Those that produce don't want the state taking any more from them and those that rely on others to provide for them want to take and take and take.
I have to wonder how much less the cuts would be if the legislature had listened to the Governor last year when he laid out just how dire the finances really were? Seems like Gibbons is the only one that is telling the truth.
ATTENTION CARSON CITY:
Why don't you make marijuana legal, tax it, regulate it, use the proceeds to balance the budget & provide free health care for all.
Time is now to de-criminalize this herb drug that has no side effects, has many medicinal purposes and causes no deaths ever.
If you can legalize & tax cigarettes & alcohol, then you can do the same with other drugs.
Fringe benefits:
1) 90% of prisons emptied, saving money on guards, lawyers, police officers & judges.
2) Tourist spike due to the legalization would increase the economic benefits.
3) Drug dealers out of business overnight.
Those of you who think legalizing drugs would harm the state, please watch the documentary film "The Business of getting High" (netflix users can play instantly).
Good God, the line of vehicles near the DMV office in Henderson now is setting records. Park at WalMart, park illegally on American Pacific, remove rocks to park on a dirt lot across the street. I swear we're turning into Tijuana without the bullets.
Now they might be open 4 days a week? You have got to be kidding. Those companies that offer to stand in line for you will make a bundle. You can wait 3 hours now for service, but soon you'll have to take a day off. We're living in Hell, kids...
They could close the DMVs and let people register at the smog places...
Test on line.
DMV has become a Nazi-like organization, that punishes us for wanting to drive a car to get to a job.
One second too late to re-new insurance...more State punishment.
I am sick of Government punishing us like we are abused children.
Where is "would-be" governor Rory? He has been very quiet these days. No doubt still out gathering information or whatever on the budget.
Listening to Jimbo is bad enough, adding Rory to the mix would be worse.
I would gladly pay a small income tax if it helped our state infrastructure. We all use the roads, libraries, state offices, schools, etc. I think if you asked most employed citizens, they would agree. (Except those above who believe we should get everything for free, legalize drugs and prostitution and kick families out of the state.
I guess it all depends what kind of state we want to be-
Democrats need to get a backbone and do what is best for the people of this state.
A reasonable tax is not the end of the world.
Grow up -shouters and screamers of no taxes-it is called a state, a county and a city because we come together as a community.
You want to live in total lawlessness, go to some third world country-quit trying to turn Nevada into one.
Democrats are pushing a personal income tax.
Democrats are pushing a personal income tax.
Democrats are pushing a personal income tax.
Democrats are pushing a personal income tax.
Democrats are pushing a personal income tax.
Democrats are pushing a personal income tax.
CNEV-Why don't you pay my income taxes if they are enacted. I rather have the money I have earned than have any program the governement runs.
Governor and the conservatives are killing the working families of this state. Just look around at the quality of life issues and notice how little this state has to offer. Same ole story... here race to the bottom folks. Take care Nevadans
Heaven help us all, when Rory looks better than Jimbo. I just can't believe the media is still covering for Harry not letting anyone run against the protocol son. Harry would be taking us down on both a federal and State level. Where is the Federal help Harry, during Nevada's lowest economic times?
dear jhib
what income taxes? Right now you get a free ride from the state of Nevada! You pay NO state taxes.
Gee, maybe the mining companies, the ones taking billions in gold profit out of the state, could help Nevadans understand how to weather a downturn. They usually handle it by cutting employees and hiding while bankruptcies and foreclosures happen all over the communities the teabagging miners live in. (See history of Elko in the late 1990s).
Then they wait it out until gold prices go back up (see history of Elko in the early 2000s) and they hire again and so do the local businesses and houses sell again and they get greedy until the cycle returns again.
It's a mining way of life that has seeped into the core of Nevada.
We need a state income tax. That way, all those teabagging miners making their temporary huge $70,000 a year salaries driving trucks can pay their fair share until they have to leave to chase the next mining boom.
It can't just be about the tourists. We all need to be responsible. As it is now, Nevada will be the butthole of the country. A place where only the toothless, knuckledragging mouthbreathers will live and be happy while sucking on their own teabags.
"Not so, mining lobbyist Jim Wadhams said. 'When more revenue is exacted from any of us, as taxpayers, that's a tax increase.'"
Exactly! Solving budget shortfalls by exacting money from state workers, teachers and higher education employees is a tax increase.
renomouse...
I ask every day here why the people of Nevada allow themselves to be raped by Mining & Gaming. (particularly Mining.) I think the Neo-Nuts are so blinded by their own rhetoric of NO TAXUS that they don't even SEE that Mining Corps are laughing ALL THE WAY TO THE BANK, YEAR, AFTER YEAR, AFTER YEAR...
They don't think us fools, they KNOW IT.
The $2 to $3 billion deficit is imaginary. That is the money they want to spend based on past growth during the boom time.
http://npri.org/publications/legislature...
http://npri.org/publications/what-revenu...
Gmag,
How does mining hurt us? They create jobs, build wealth, pay salaries.
Just because they don't pay enough in taxes according to you or other people on the hard left (who all seem to be more interested in inputs and not results) doesn't mean they are harming the state.
By that logic, every resident of Nevada is harming the state because they don't pay an income tax.
Meanwhile the fireman are still paid $300,000 a year. Until that is corrected, nothing will get better.
We elect our lawmakers to make tough decisions. I don't envy them. I especially don't envy Democrats who go around saying they support social services, education, and tax fairness, then lack the guts to back their words. Republicans will not suffer with their constituents because most Nevada Republicans think they can live without government (although they need it every minute of every day, but just don't want to pay for it). Democrats will deserve to suffer for being hypocrites and dishonest.
Nick:
Read the article! You comment is silly in context of the State Budget!
Hey DavidCurtis:
Maybe if you act like an adult, they will treat you like an adult. I have lived here 20+ years and and count on one hand how many times I have had to go to a DMV office. Every routine service is available online and really is there any reason you can't plan to have your insurance in place at the proper time?
"Meanwhile the fireman are still paid $300,000 a year. Until that is corrected, nothing will get better."
Hey Nick, leave the CCFD alone, we have a hard enough time spending ours days hanging out at 24 hour fitness, playing XBOX and grocery shopping.
Not to mention our side businesses ...
JBond, the Gov is proposing the State set up cameras ($) to catch (punish) us.
Who is the child? The Gov thinks we are.
People talk about two options for bridging the deficit as if they're mutually exclusive.
We need to BOTH cut cost and raise revenue for the state. It seems foolish to look at a problem like this and focus almost exclusively on cutting costs.
I agree wholeheartedly that most of the money could come from cuts, but Nevada needs to find a more stable tax base.
Nevada is the second-lowest taxed state in the country (to Alaska)! The state has grown substantially, and we need some form of a reliable tax base to maintain the infrastructure and critical government services (e.g., education, public safety, roads).
I hate paying taxes as much as anyone, but I also recognize that if we rely on tourists to pay for our schools, roads, and public safety, then our state will always be at the mercy of others and their willingness to come "blow cash" in Vegas.
It's not popular - especially in a recession - but something needs to be done on both sides to bridge the deficit gap.
I LOVE THAT NEW PROGRAM FOR PHOTOGRAPHING/FINING NON-INSURANCE PEOPLE! WELL DONE!
About fricken time. Now we need to do the same thing about illegals and we'll be all good!
There is some good out of all this. Cutting the eduation is absolutely stupid btw. Cut salaries across the board, not education.
JBond is right...the majority of responsible adults have no problems keeping auto insurance current and renewing auto registrations on-line.
The "punishment" some of you are speaking of only applies to those who are breaking the law. If you can't keep your car insured or if you don't register it in time, don't complain about fees. (That sounds like a child whining when his parent punishes him for doing something wrong.)
As for cameras that "punish" us like kids, they only catch people breaking the law. Red light cameras would (1) save lives, (2) pay for themselves in a very short time period, and (3) would continue to provide revenue for a long period of time. If they're illegal right now, I don't know why. Over 400 cities and communities in the U.S. currently use them.
PATRICK...
Give me a break, think-tanker!
WHY SHOULDN'T MINING PAY A FAIR TAX?
Can you answer that one simple question?
Please?
And if you think for one minute that only "THE HARD LEFT" (?) advocates FAIR TAXES from Mining, you are waaaay farther out of touch than I realized.
Newcomer, I agree with traffic cameras, that use them everywhere in California and I see people braking hard sometimes just because they notice the cameras instead of gunning through the reds. They do work.
I'm curious, what are all those camera's I see currently in Henderson/Las vegas? Most intersections have them already...
One of the many reasons my wife and I are moving there is because there is no state income tax.
Please do not offer to open that can of worms. Income tax always starts small. - Then there is new money, then there is new spending that outweighs the new money, because the people who live there because of no state tax are now moving to Florida. Now there is a budget shortfall, so let's raise the income tax just a bit more....and so on.
Trust me, I currently live in a ultra liberal, high tax, no services, to expensive no job state that only gets worse partially due to this type of philosophy.
If NV can't cut taxes, understandable for your particular situation, maybe tax incentives for companies to move there (unlike WI which seems to hate businesses), that could help, partially.
One thing is that relying on one industry doesn't work. All auto in MI, bad - all turism, bad - all government...really bad....like here in WI. :-)
Journey, you can't collect registration for people unless there permenant residence is in Nevada. I don't know what the 'requirements' are for when you move, I believe they give you 6 months? Regardless, if you live here for any lengthy period of time with out of state plates you will get fined or have issues with dmv at re-registration time.
GemsofNirvana, I agree that NV should stay away from a state income tax. It's a major draw to this state for individuals and corporations (whose employees don't pay the tax).
That said, Nevada barely taxes its citizen at all (2nd lowest in the country), yet the state has grown rapidly (Vegas is the 28th largest U.S. city), and the infrastructure and public good service costs are simply too heavy for our tax base. (Of all states without an income tax, our property tax is the lowest.)
While the low tax rates attract people to the state, the growing population and number of illegals living in the state (along with the fact that our tax base relies almost exclusively on tourism) has handicapped our state financially.
Instead of an income tax, I'd propose permitting a 10-20 cent gas tax or increased property tax rates to implement a stable tax base that Nevadans themselves pay for. A gas tax would be partially paid for by tourists and would cost somewhere around $75-100 per household. Property tax rate hikes might cost an additional $100-200 per year on the average household.
Even on the high end, paying an extra $300 per year is minuscule compared to a flat income tax and would (along with substantial cuts in spending) bridge the budget gap and help Nevada begin to stand independent of tourism in terms of providing for the public services (e.g., education, public safety, transportation, infrastructure improvements and maintenance) that are needed in a growing, thriving community.
Gmag,
Your definition of a "fair tax" seems to always be "pay more"
First, Democrats are not pushing for personal income taxes. Get your facts straight.
Second, this is supposed to be about leading our state. Democratic legislative leadership has offered viable solutions and will continue to do so. In the end, I think that they will show the courage of their convictions and that will secure their re-election.