Las Vegas Sun

March 28, 2024

ECONOMY:

Governor: Salary cuts possible, any tax hike must be temporary

CARSON CITY – Gov. Jim Gibbons doesn’t favor increasing Nevada’s sales tax or extending it to services to solve the state budget crisis.

Any tax increase will have to sunset – have a firm ending date. “It is only in place for the period of time this economic downturn is in place,” he said.

The state faces a shortfall of $300 million or an additional 9.5 percent this fiscal year, which ends June 30th. Agencies have already sliced 4.5 percent from their budgets and then reduced them an additional $3.2 percent.

And an estimated $1.5 billion will have to be cut from the $7.1 billion budget agencies are seeking for the next two fiscal years.

The governor told reporters he didn’t know if a special session of the Legislature would be needed before the 2009 regular session convenes in February.

He will meet again on Friday with key legislators to examine all the options.

One thing he mentioned is cutting salaries. “I’m willing to take a salary reduction,” he said. His pay now is $141,000. “I would like to see it start at the top.”

That would take approval of the Legislature to cut the salary of state workers.

The governor, when asked about following the proposal of California in raising the sales tax and extending it to services such as fees charged by lawyers or golf courses, said: “We are not California and we do not need to tax everything including the air we breathe.”

California, he said, has a problem with spending. The neighboring state has proposed raising taxes first. Nevada, on the other hand, has reduced spending first, he said.

After cutting budgets, “then we will see where we are at the end of the day,” he said.

“We will see a flood of people coming to Nevada to buy things if California does what it intends to do,” he said.

There has been mixed reaction to his softening his stance on taxes if all else fails. It ranges from some who don’t want any taxes raised to those who want to solve the problem by increasing revenues.

After a meeting with legislators last Friday, Gibbons said “all options” are on the table, including taxes. He will meet again Friday in Reno with lawmakers for a second session.

The governor noted that the Legislature would need a two-thirds majority in both houses to pass any tax. Democrats have a two-thirds majority in the Assembly but not in the Senate.

Gibbons also threw cold water on any plan to tax gold. The gold mines have the cost of production and the price per ounce of gold is diminishing.

“I am not in favor of any activity that is going to put at risk a business or the economy of this state,” he said.

Cy Ryan may be reached at (775) 687-5032 or [email protected].

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