The statement from the governor’s office came minutes before the Nevada Senate convened as a Committee of the Whole to review Sandoval’s $5.8 billion budget proposal, but did nothing to temper Democratic leadership criticism of the spending plan.
Senate Majority Leader Steven Horsford, D-North Las Vegas, said Sandoval’s budget would saddle the 2013 Legislature with a $1.1 billion shortfall heading into the next session, and called on both parties to tackle the problem of the state’s tax structure. According to legislative staff, filling such a gap would require 12.6 percent revenue growth over the next two years — an unlikely scenario in a state that leads the nation in unemployment, bankruptcies and foreclosures.
“There are a lot of areas where we can agree with this administration that there are going to be some cuts,” Horsford said on the Senate floor.
But when it comes to key elements of the budget — like deep cuts to education and some social services — “we’re going to have a lot of discussion on how this ends,” he said.
He urged the Senate to “put ideological views aside” and “come together as a body.”
Horsford said the governor’s budget plan is $2.5 billion less than the spending plan approved by lawmakers two years ago, and reiterated his objection that Sandoval’s no-tax-stance was one-sided by shutting out discussion about raising taxes.
“Our point is let’s have the adult conversation now,” he told reporters after the Senate hearing.
The governor’s budget director, Andrew Clinger, said the new revenue amended into the governor’s proposal includes $41 million in mining net proceeds that was not included in the original budget. Clinger also said mines collections should be $17.9 million higher than forecast last year.
Another $26 million savings is expected in revised Medicaid matching rates paid by the federal government for 2013.
Horsford’s remarks about future shortfalls brought a response from Senate Minority Leader Michael McGinness, R-Fallon, who said it’s easy to “scare ourselves to death” talking about what-if scenarios down the road.
“We need to work on the current budget,” he said, adding that the governor’s amended budget “seems to fill up the holes we’re talking about.”
Horsford and Sen. Sheila Leslie, D-Reno, also questioned borrowing against future insurance premium taxes, a move that would generate an immediate $190 million, but obligate the state and future Legislatures for interest payments of roughly $53 million a year for four years beginning in 2014.
Heidi Gansert, Sandoval’s chief of staff, said that proposal would be a “last resort.”
“The object would be not to use it,” she said.
Sandoval has pledged to veto any bill that includes a tax or fee increase. He’s also said he will veto AB183, a bill given final legislative approval last week, that reduces the amount of money school districts must keep in a separate account to make bond payments, and allow them to use those funds for school improvement projects.
Sandoval wants that money as well, to help pay for school operations — a move critics argue would break the trust of voters who approved the bond money for construction. He said he will veto the bill because it would leave a $300 million hole in his budget.
Clinger said tax revenues are up about $32 million from forecasts made in December by the Economic Forum, an independent panel of business financial experts who project state revenues on which the budget must be based.
The forum meets again May 2 to make its final projections for the upcoming biennium.
Dale Erquiaga, senior administration adviser, said the governor has told agency heads to begin preparing wish lists for budget “add backs,” in the event projections improve.