He says his star will rise as anti-tax anger grows

CARSON CITY — Nevadans would be facing far more than the $1 billion in tax increases approved by the Legislature had he not hung tough on his no-new-taxes pledge, Gov. Jim Gibbons said Wednesday.

Gibbons is convinced that Silver State residents will grow increasingly angry at legislators in coming months for the record tax increase and $6.9 billion spending plan they approved during the session that adjourned early Tuesday.

He expects that will translate into increased popularity for himself in next year's election, when he could draw Assembly Speaker Barbara Buckley, D-Las Vegas, as his gubernatorial opponent.

"I think people will see it," he said. "This spending and tax plan is a job-killing, economy-crushing insult to the people of Nevada. They are going to lose jobs because of it."

Already Gibbons has begun to refer to the tax plan as the "outrageous Horsford-Buckley tax increase of 2009," in reference to the Assembly speaker and Senate Majority Leader Steven Horsford, D-Las Vegas.

Gibbons said he spoke earlier Wednesday with a man who runs a company with 40 employees. This man told him he has no choice but to lay off some workers because his taxes increase next month and the recession has caused his income to drop.

In a wide-ranging interview about the 2009 Legislature, Gibbons added the state will continue to need a governor willing to stand up to legislators at the next legislative session in 2011 because tax revenues could be $2.6 billion below what some legislators believe state government should spend.

"I don't want us to become like General Motors suffering through a bankruptcy," he said. "I am proud to stand up against taxes and increased spending."

While he hopes for a major recovery, the governor said most economists believe that what we are experiencing today is the "new standard economy."

Horsford and Buckley quickly defended their actions.

"I feel like we did our job," Horsford said in a Tuesday interview. "We took a very difficult situation -- the economy, the state having the worst budget (shortfall) in America ... and we were able to pass a balanced budget. We funded education, and we protected other critical services for the people of the state of Nevada."

Buckley said Nevada was "facing probably the worst economic times the state has ever seen."

"It was staggering," she said. "The governor chose, in his budget, an extreme approach which would have set the state back for decades. The probable closure of UNLV and UNR, $690 million cut from K-12, cutting children and pregnant women off health insurance.

"At some point, we have to act like grown-ups," she added. "How will Nevada survive if we don't have a university system? How would we be poised for economic recovery if we have massive layoffs of teachers?"

But Gibbons and Buckley agree on one thing. Each thinks they will benefit from the Legislature's actions, even if for different reasons.

"I think people have a pretty good sense of who Jim Gibbons is now," Buckley said. "I do not think he will be re-elected."

Gibbons disagrees.

"If it had not been my resistance to the spending and taxes of this session, those items would have been much higher," he said. "How much more of a burden can the working people take?"

The Economic Forum, the group that estimates tax revenue for state government, calculated in May that the state would receive $5.5 billion in tax revenue over the next two years, or about 5 percent less than the $5.8 billion produced during the two-year budget period that ends June 30.

With the tax increases and federal stimulus funds, state general fund spending in the next two-year budget period will be about $6.9 billion, or about $600 million more than actual spending during the current two-year budget period.

SOME SUCCESSES

Though Gibbons is critical of the tax plan, he said there were successes during the session. He is happy that lawmakers put his energy plan and other energy bills into law. His energy plan, Senate Bill 395, was the last bill passed before adjournment.

A state energy czar will be named who will seek renewable energy companies to locate in Nevada. Tax incentives will be given to companies that build solar, wind or geothermal plants. Utilities must buy 25 percent of their energy from renewable sources by 2025.

"We are now two years ahead of every other state," Gibbons said. "This is our way of working through this recession. This is our strategy to diversify the state economy."

He added many of the elements in his energy bill were taken out by legislators and placed in their own energy bills. He intends to sign them all.

Gibbons is also proud he was the first Nevada governor to post the entire state budget on the Internet. But he was dismayed that all the key decisions on taxes and spending were made by legislators in private meetings behind closed doors.

Gibbons said he and his staff were barred from those meetings because they "didn't agree to their automatic assumption to raise taxes."

Gibbons was also pleased by the Legislature's approval of plans to limit retirement benefits for future state employees. He noted that Gov. Kenny Guinn failed in 2005 when he sought to limit benefits.

"We are now headed in the right direction," Gibbons said. "It's a start."

Still, Gibbons criticized the Legislature's decision to give state employees 4.6 percent salary cuts by requiring them to take 12 unpaid furlough days a year.

Gibbons said he considered furloughs himself but ultimately dropped that idea and proposed 6 percent salary cuts. Furloughs won't work because the state needs full-time workers in critical areas, he said.

"How do I furlough a group of individuals like prison guards without having to hire people to fill in for them? I can't shut the place down."

Nevada Highway Patrol troopers and parole and probation officers already are at minimum levels and the public will be less safe if they work less, he added.

GOVERNOR WITH MOST VETOES

Gibbons makes no apologies for so far vetoing a record 41 bills and having 25 of them overridden in the Legislature.

"There were so many bad bills sent over to me," he said. "I vetoed them for no other reason than they were bad bills, or meaningless bills."

Many of the bills he vetoed were "clearly driven by special interests, by the trial lawyers and unions. They were not in the best interest of citizens."

Gibbons said it was inevitable there would be conflicts between the Democratic-controlled Legislature and him. He was the first Republican governor since Bob List in 1981 to govern with both houses of the Legislature controlled by Democrats.

"There is nothing wrong with vetoes. The system was designed for the process of vetoes."

Contact reporter Ed Vogel at evogel@reviewjournal.com or 775-687-3901. Contact reporter Molly Ball at mball @reviewjournal.com or 702-387-2919.