WINNEMUCCA — Governor Jim Gibbons stopped over Sunday morning to attend the Ranch Hand Rodeo and later visited with members of local government. The primary topic of conversation: the projected $3 billion budget gap the state is facing in advance of the 2011 Legislative Session.

The gap was partially created by temporary measures taken during the 2009 Legislative Session, which included tax increases scheduled to expire next year, and during the 2010 Special Session, which included federal money that will not be available during the next go-around.

The $3 billion gap represents half of the state’s spending.  Where the money will come from and who will pay was the primary topic of conversation between the governor, members of the Humboldt County Commission and Winnemucca City Council.

TAXES:  In conversation there appeared little the governor and  local representatives couldn’t agree on – especially taxes to mining.  Mining revenue is widely believed to be responsible for the economic bubble protecting the northern rural counties during the financial crisis impacting the rest of the state. Another widely held belief is that taxes to mining means fewer jobs.

The Progressive Leadership Alliance of Nevada is circulating a petition that, if successful, would change the way mines pay taxes.  Currently mines are taxed on net proceeds; PLAN and other supporters would have mines pay a tax on gross receipts – like all other businesses. The Nevada Mine Association recently filed suit against those circulating the petition in an effort to stop it.

“Emotion trumps science,” Gibbons said while explaining that people just don’t understand how mining works.  “People think it’s a bunch of guys in their pickup trucks with rakes and shovels in the back who are raking up buckets of gold to take to Canada. That’s just not how it works,” he said in reference to the high overhead incurred by mining.

Lost in the debate, noted Mayor Di An Putnam, are the many donations mining makes to local schools and communities that might have suffered more during the economic decline if not for the generosity of the mining companies.

In addition to the mining tax, the governor also spoke out against a broad-based business tax, which he said was just another name for an income tax, and a use tax on services, which could include everything from a shoe shine to a hair cut.

When asked directly if taxes of some sort would have to be raised in order to close the budget gap, Governor Gibbons shook his head in agreement. However, he said before that happens he would like to see every reduction possible made to the budget.

SPENDING CUTS/SHIFTING THE BURDON:  The governor suggested what was needed was more reductions in state government – including cuts to higher education.  As he has in the past, Gibbons argued Nevada’s colleges have the ability to raise the money they need to operate through tuition and other sources, but are still relying on taxpayers for 85 percent of their funding.   

He also commented negatively on the six-figure salaries being earned by some in higher education – including one individual who allegedly earns $1.4 million/year.  He commented, “That’s100 times more than I make.”

Towing the line on conservative philosophy, Gibbons said the state was really only mandated to do three things:  1) public safety, 2) education, and 3) protect children, the elderly and others who are vulnerable.

The governor said the state shouldn’t provide any service that could be provided by private industry – then went a step further and discussed some of the responsibilities the state provides that could be transferred to local government.

“Why should the state be responsible for birth certificates?  The counties can do that,” he said.    The cost to local government for the transfer of services currently paid for by the state is just what members of  local government fear.  Another concern is funding going the other way; that is, that money being generated locally would be used to fill the state budget gap.

But there were other concerns about the ramifications of severe cuts.  Councilman Joyce Sheen questioned whether reducing state government -- with the inevitable layoffs that result from such a measure -- would merely add to the unemployment lines.

HE STATE LEGISLATURE:  Commission Chairman Chuck Giordano and Mayor Putnam both recently traveled to Carson City to speak with the state's Legislators about their concerns, but the meetings did not appear to go well.

Giordano referenced comments made by the Speaker of the Nevada Assembly, Barbara Buckley, who suggested counties still surviving in the bad economy should bail-out the cities that are struggling, he claimed.  Mayor Putnam said there appeared to be animosity from Buckley and Senate Leader Steven Horsford towards the rural counties.

Gibbons referenced the need for more conservative leadership from Las Vegas.  He said of  state assemblyman and senators, “They vote how their leaders tell them to vote.”

Gibbons said he anticipates the Legislation voted on during the special session will be signed on Friday.