SAN FRANCISCO — If Nevada Gov. Jim Gibbons gets his way, there will be no new taxes to fill the state’s gaping budget hole, though residents will be given the option of buying gift certificates to pay teachers’ salaries.
Nevada’s general fund revenue for the 2009-2011 biennium will fall $962 million short of projections made when the budget was passed in 2009, according to the most recent projections from the governor’s budget office.
That’s a shortfall of 14% from a budget that was already based on recession figures.
As a result, Gibbons, in an unusual off-year state of the state address Monday night, called lawmakers into a special session Feb. 23.
Normally, Nevada lawmakers do not meet in even years and there is no state of the state address.
Gibbons, a Republican, is fighting for re-election. He will face two well-funded challengers in June’s GOP primary.
“The dire economic situation we are facing now requires immediate action,” Gibbons said in his televised address. “While there is some evidence to suggest that our nation is approaching the end of this economic decline, the fact is this recession still has a crippling hold on Nevada.”
The governor insisted tax increases are off the table.
Gibbons has delivered some budget-balancing proposals, though not enough so far to close the entire budget shortfall.
He wants across-the-board cuts in most departments, the shutdown of the state’s oldest prison facility, and layoffs for “several hundred” state employees.
Though he didn’t say exactly how, Gibbons said education spending will also be cut, noting that K-12 and higher education comprise 54% of general fund spending.
“We can’t solve a $1 billion hole in a $6 billion budget if half of that budget is off the table,” he said.
Concerned citizens could help teachers out with Gibbons’ proposed education gift certificates.
“You can use the gift certificate to donate money to a nonprofit organization that will make sure your money is spent only on teachers’ salaries,” the governor said.
Gibbons is also asking for an overhaul of public education that includes vouchers for private school students, the elimination of elementary class-size reduction mandates, and an end to collective bargaining for school employees.
These Republican proposals are likely to go over like a lead balloon with the Democratic majorities in the Legislature.
“There is a real possibility that thousands of teachers and educational personnel could be laid off throughout Nevada,” Senate Majority Leader Steven Horsford said in his party’s formal response to Gibbons’ speech. “We know this is unacceptable. Just as unacceptable is the prospect of increasing class sizes in already overcrowded schools.”
Horsford said his party was not going to push for tax increases in the special session, but added that Democrats plan to put reform of the state’s tax system on the agenda in 2011.
Nevada has relatively low levels of state debt, and its general obligation bonds carry ratings of Aa2 from Moody’s Investors Service, AA from Fitch Ratings, and AA-plus from Standard & Poor’s. Fitch and Moody’s each downgraded the state one notch during 2009.