CARSON CITY — The Interim Finance Committee meets today and one of the items on the agenda is the budget shortfall – estimated at about $900 million.  The discussion begins at 9 a.m. and can be viewed at: The Nevada Legislature.

Addressing the issue of the budget was Assemblyman Pete Goicoechea who acknowledged options are few.  “We need to move away from calling this an economic downturn and call it what it is,” he said.  “Let’s face it, we’re in trouble.  If it’s a recession it’s the worse one we’ve ever seen.”

He added there will come a time when the federal government loses the ability to fund stimulus projects.  “When that day comes we’ll be in a true depression.”

Despite the bleak outlook, Goicoechea doesn’t expect anyone to bring forward a tax increase and he would not support a business tax increase.  “We can’t increase taxes on businesses at a time when customers just aren’t coming through the door,” he said.

Instead, residents can expect the Legislature to bring the budget into balance with reductions in spending, fee increases and perhaps layoffs of state employees.  He said residents can certainly expect a special session of the Legislature so representatives can hammer out the details.

Although Governor Jim Gibbons is crafting a proposal that could shift as many as 300 state workers to unemployment lines, a number that does not include k-12 teachers or higher-education employees, Goicoechea felt strongly any layoffs would just make the economy worse and should be viewed an option of last resort. 

He noted the state is already facing double-digit unemployment, and those who still have jobs are concerned about the future of them, so few are spending money in a state that depends on taxable sales for revenue.

“Taxable sales are off by about $143 million; they’re in the tank” he said. “When people are unemployed they don’t buy big-ticket items.”

The budget may be tight, but Goicoechea said he would oppose efforts to dip into city and county funds.  “They just don’t have it to give; they’re laying people off.”  He noted the state government is still in hock to local governments from the $160 million it borrowed from the LGIP (Local Government Investment Pool) and the $200 million it borrowed from the Indigent Accident Fund, which is in essence county money.

Many proposals are being discussed – among them cuts to education.

Goicoechea said there’s talk of shortening the school year by ten days, which would save the state about $120 million/year, an effort he could support. Although that would represent a cut in salary for teachers, the alternative would be far worse because other cuts would have a more significant impact on the classroom. A 10 - 20 percent cut to the education budget would most certainly mean there would be teachers who lost their jobs.

Nevada already ranks 50^th in the nation for per-pupil spending.

An added advantage to shortening the school year by ten days (five days at the beginning of the year and five days at the end) would be less long-term impact on family’s lives than going to a four-day extended hour schedule that would require family’s to come up with childcare.

The Interim Finance Committee is meeting today (Feb. 3) and tomorrow (Feb. 4) in Carson City.  Hearings will also be held in Las Vegas on Feb. 9 and 10.  On Feb. 10 legislators will hear from K-12 teachers in the morning and higher education in the afternoon.  Agendas for the meetings can be read at the Nevada Legislature website.  

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