Democratic leaders present proposals for legislative session

The Democrats who control the state Legislature, under pressure to come up with alternatives to the governor’s unpopular budget proposals, presented an agenda Thursday for the legislative session that begins next week.

Assembly Speaker Barbara Buckley and Senate Majority Leader Steven Horsford put forward plans to prevent home foreclosures, create “green” jobs and embark on an intensive budget-building process that includes long-term fiscal planning.

The plans do not spell out how much money Buckley and Horsford, both D-Las Vegas, think should be in the next state budget or where they think it should come from. Rather, they proposed a schedule of hearings over the next two months in which legislative committees would review the major areas of the budget and set targets for funding.

“We are in the worst financial situation we have been in in our state’s history,” Horsford said at a joint news conference with Buckley announcing the plans. “We will not follow the governor’s lead and slash budgets without consulting Nevadans.”

Republican Gov. Jim Gibbons has challenged the Democrats, who hold the majority in both legislative houses, to come up with better ideas if they don’t like Gibbons’ proposed cuts to teacher salaries and higher education.

But Horsford said legislators want to make budget determinations through a transparent, deliberative process in which the public, the business community and other interests all can have a say.

“We will not make these decisions in a vacuum,” Horsford said.

Gibbons called the idea that he had concocted his budget in a back room “misleading.”

“Every state entity met with our Budget Office before and during the time my proposed budget was put together,” the governor said in a prepared statement. “Legislative staff were invited to and attended every meeting with agency personnel.” Only the higher education system declined to fully participate, he said.

Gibbons said he was pleased to see Democrats share his concern with renewable energy and long-term budgeting. But when it comes to this year’s budget, he said, Democratic leaders have had months to consider the budget crisis but still have no specifics to offer.

“Our citizens expect us to find solutions to the economic crisis instead of making excuses as to why we have not found those solutions,” Gibbons said. He termed the Democrats’ budget process nothing more than a “plan to have a plan.”

Buckley said the budget review will assess “what we can cut, what we can reform and what we must preserve,” and will last from Feb. 6 to March 30.

Legislators then will vote on the spending targets for “what the state needs to finance if we are to maintain our priorities,” Buckley said. There’s little doubt that spending will need to be cut, she said, but Gibbons’ proposed cuts go too far.

“I am predicting that there will be bipartisan agreement that the level of these cuts cannot be as severe as that proposed by the governor,” Buckley said.

Gibbons’ proposed $6.2 billion budget would see the state spend more than $600 million less than the amount legislators approved in 2007. Gibbons’ proposal includes a 6 percent cut in state worker salaries and a 36 percent cut to higher education funding.

It appears likely that the federal economic stimulus bill making its way through Congress will help Nevada close its budget gap. In the version that passed the House of Representatives this week, the state would get about $1.3 billion for generic budget relief, education funding, Medicare and other purposes. The legislation that now is being considered by the Senate might be still more generous.

Buckley and Horsford said once votes are taken on essential spending levels, legislators then would examine the revenues needed to reach them. The committees will study existing tax exemptions and abatements to see whether they ought to remain in place and look at ways to crack down on uncollected taxes before taking up the question of whether new revenue sources — that is, increased taxes — are needed.

The Democrats have set an April 17 deadline for drafting a revenue plan. They say they hope to have a budget put together not long after the state Economic Forum on May 1 delivers the final projections that dictate available revenue.

“Our hope is that the budget plan will be ready earlier than ever before,” Buckley said.

There is no question that the budget crisis will be at the center of this legislative session. But the Democrats also are proposing policy measures that they say will help ease Nevadans’ economic pain.

The foreclosure plan would force lenders to go through mediation with homeowners before foreclosing, a measure the Democrats say would lead to loan modification plans allowing people to stay in their homes, potentially preventing almost 13,000 foreclosures.

More than 51,000 Nevada homeowners are losing their homes to foreclosure, Horsford said, while 48 percent are “upside-down” on their houses. The housing market crash has decimated the construction and related industries and contributes to rising crime rates, Horsford said.

Other proposals would protect renters from being evicted without notice by banks foreclosing on their landlords; require banks to keep up foreclosed properties so neighborhoods don’t become blighted; and curb predatory mortgage lending practices.

The green jobs plan would set up training centers for new jobs improving energy efficiency in buildings, for which money is being set aside in the federal stimulus plan.

“We will be able to make renewable energy a priority that it has not been in the past,” Horsford said. Nevada, he said, could create 15,000 “green-collar jobs” weatherizing homes and making buildings more efficient.

The Nevada Conservation League on Thursday endorsed this plan, saying it would put Nevadans to work while at the same time allowing consumers to save on energy costs.

In addition to the short-term patching of the budget gap, the Democrats hope to enact measures that would ease the effect of future economic downturns by putting 1.5 percent of all revenue collected in a “budget stabilization fund” that could be drawn upon under adverse conditions.

Buckley said the state wouldn’t start depositing into such an account until the current recession eases, but that now is the time to put it in place while the effects of today’s downturn are vivid in people’s minds.

Contact reporter Molly Ball at mball@reviewjournal.com or 702-387-2919.