Governor Calls Special Session

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CARSON CITY, Nev. (AP) - Nevada Gov. Jim Gibbons is calling a special session of the state Legislature to help ease a budget crisis and revenue shortfall expected to top $1 billion - possibly by delaying pay raises for government workers and educators.

In a surprise move Friday, the governor said the session will start June 23 and run for up to five days. His announcement following a meeting with other state officials and legislative leaders on Thursday that ended with key lawmakers opposing the idea.

Gibbons, who sets the agenda for special sessions, said he decided that one was needed anyway because "a budget crisis of this magnitude should not be addressed by only a few selected leaders." He'll issue the formal call for the session next week.

"We are facing the worst fiscal crisis in the history of the state," Gibbons said, adding that "the only responsible action is to convene the entire Legislature so that all can participate in crafting the solution and all options can be considered."

Senate Majority Leader Bill Raggio, R-Reno, who on Thursday had questioned the need for the session, said Friday he talked with the governor following his earlier comments and decided that deferring
4 percent cost-of-living increases was the only way to avoid layoffs.

The deferral would have to be approved by the full Legislature, rather than by its Interim Finance Committee which handles many other matters between the state's every-other-year regular sessions.

"It's hard to justify salary increases when the economy is down, when the private sector doesn't give pay raises," Raggio said. "I think we have to follow suit. The alternative is laying off people. I can't justify that."

By deferring the raises, scheduled to take effect July 1, thestate would save about $130 million in the coming fiscal year. That includes nearly $40 million for state employees and state university-college system employees and about $90 million for similar raises for K-12 teacher.

Other moneysaving plans besides delayed pay raises are likely. Gibbons spokesman Ben Kieckhefer said they could include Lt. Gov.
Brian Krolicki's "securitization" plan that would raise $600 million or more through a one-time bond sale. The bonds would be paid off over 23 years with about $1.25 billion in tobacco company payments.

Kieckhefer also said lawmakers could consider budget cuts beyond those already in place. While Gibbons could order such reductions on his own, Kieckhefer said the lawmakers should be involved because of the prospect of reduced government services.

Another solution - an unlikely one - would be some form of higher taxes. Gibbons has opposed tax increases, and it would take a two-thirds vote of both the Senate and Assembly to pass a tax increase and override a veto.

Democrats were united in their criticism of the move by the first-term Republican governor.

"Unbelievable. Unbelievable," Assembly Speaker Barbara Buckley, D-Las Vegas, said in commenting on the pay raise deferral plan. "It's apparent that the governor wants to change the message away from his text-messaging, because this idea makes no sense."

Gibbons, who wants a divorce from his wife, apologized Wednesday
for using a state-owned cell phone to send more than 860 text messages over several weeks last year to another woman. A new poll,
released Friday, showed him with a low 21 percent approval rating.

Buckley said the raises for K-12 teachers can't be withheld in most cases because of contracts that school districts already have negotiated with the teachers. She said that means the districts will be forced to cut programs for children.

Senate Minority Leader Steven Horsford, D-North Las Vegas, termed the governor's move "completely irresponsible," adding, "Rather than going through the Interim Finance Committee and making the necessary adjustments, the governor and the Republican leadership are throwing away taxpayer dollars by calling for a special session."

"This is about political maneuvering and no real solutions. The public is tired of that."

Assembly Ways and Means Chairman Morse Arberry, D-Las Vegas,
said he heard about the special session from reporters rather than the governor, and considered the plan "a boondoggle."

"To blindside us at the last minute now that he has a bright idea, come on," Arberry said. "He can call this, but I have not bought off on the idea. There's no proof that by taking away these raises it's going to fill the budget void."

The governor and lawmakers already have approved 4.5 percent budget cuts for state agencies, along with delays in one-shot appropriations and construction projects and tapping the state's "rainy day" fund for fiscal emergencies.

The moves have followed a steady series of dismal reports on slumping revenues from major sources, such as casino and sales taxes. Gibbons' budget staff has projected a $1 billion revenue shortfall by mid-2009, and another $1 billion shortfall in the two-year budget cycle that will end in mid-2011.

Special sessions, other than very brief ones following regular sessions, tend to be the exception rather than the rule in Nevada. That's especially true in election years. Most lawmakers are up for re-election this year, and from the point the session is called until 15 days after it ends they can't accept campaign contributions.

Also, legislative leaders typically are consulted in advance of such sessions on whether one is actually needed and to determine what the agenda will be. The last one lasted only a few hours, immediately after the regular 2007 session.

(Copyright 2008 by The Associated Press. All Rights Reserved.)