Budget battle begins

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CARSON CITY — In the midst of the worst recession in generations, the 75th session of the Nevada Legislature opened Monday with Democratic leaders warning of spending cuts and promising to retain essential services.

"We will still need to make cuts and even eliminate some programs that are ineffective or have simply run their course," Steve Horsford, D-Las Vegas, said as he assumed the role of Senate majority leader.

"People I have talked to all over the state are terrified of losing their jobs," Barbara Buckley, D-Las Vegas, said in beginning her second session as Assembly speaker. "In better times, when we clung to the illusion that our state was recession-proof, we never worried about coping with a 9 percent unemployment rate. Job creation must be one of our top priorities."

Unemployment in Nevada reached 9.1 percent in December, the highest rate since 1983. It is expected to peak at 11.4 percent next year.

Most of the opening day was spent on ceremonial matters. Lawmakers introduced 245 bills for discussion and hearing. The Senate approved Senate Bill 1, which allocates $15 million for the cost of the 2009 legislative session. The bill funds legislator salaries — just $8,777 each for the 120-day session.

Because of declining tax revenues, Gov. Jim Gibbons has asked legislators to adopt a $6.17 billion two-year budget, or 9.3 percent less than the $6.8 billion budget passed in 2007.

However, Gibbons estimates the state needs to spend $8 billion to keep services at the levels contemplated two years ago.

To cover the difference, the governor proposes 6 percent salary cuts for state employees, university and community college workers and teachers. He also wants to cut state support to higher education by 36 percent.

During a recent presentation, state Budget Director Andrew Clinger said 10,000 state-paid workers must be laid off if legislators do not approve the reductions or identify new sources of revenue.

In separate speeches, Buckley and Horsford said there will be cuts, although not the cuts proposed by Gibbons.

Buckley said legislators will examine every tax break that has been approved over the past few decades in their quest to find revenue.

She added they also will "make sure we don’t lose money in the long run by implementing" the higher education cuts sought by Gibbons.

Horsford said Nevadans don’t want children and senior citizens to "pay the price of economic turmoil by having this Legislature and Nevada’s governor tear down everything that has been built up over the years."

Sen. Randolph Townsend, R-Reno, emphasized that legislators need to work together to complete the session by the June 1 scheduled adjournment date.

Sen. Mike McGinness, R-Fallon, said Horsford’s speech was strong, but he thought the new majority leader was going to emphasize the tough economic times Nevada faces.

Horsford, 35, is the first African-American majority leader and one of the youngest in state history.

With the victories of Allison Copening and Shirley Breeden over Republican incumbents Bob Beers and Joe Heck in November, Democrats captured the Senate for the first time since 1991.

They hold a 12-9 advantage in the Senate. In the Assembly Democrats hold a veto-proof 28-14 margin.

In her speech, Buckley said legislators will try to prevent further foreclosures, noting that one in 11 Nevadans is in danger of losing his or her home.

Forty-eight percent of Nevadans are upside down on their mortgages, owing more than the properties are worth.

"This session we will have an opportunity to enact legislation that would institute mediation for homeowners who wish to remain in their home and who are desperate for a workout agreement," Buckley said.

Democrats have not yet advocated any tax increases to cover spending shortfalls.

Buckley said that in addition to reconsidering tax breaks, legislators will examine how revenue is distributed between state and local government and if government consolidation could yield more revenue.

"When we face a crisis, it often brings people together," she said. "Maybe that’s a silver lining in today’s crisis?"

Horsford said in closing: "We will make Nevada great again."

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.