Balancing Nevada

Nevada’s special legislative session, currently in its second day, has been described by many as a dog-and-pony show effort to balance the state budget – most of the real negotiations to extract money from the private sector and cut state spending has been going on behind the scenes in closed-door sessions. But listening to the testimony of the aggrieved, however tedious, sure makes you understand what’s at stake when a state endeavors to pull itself into the black “with responsible government spending and without raising taxes,” as Governor Jim Gibbons has pledged to do.

On Tuesday, there were the college students, bussed up to the state’s capitol at Carson City, pleading to be allowed to finish their degrees before tuition soars out of their reach. There was also director of the state’s Department of Health and Human Services, Mike Willden, helping legislators figure out just how many of Nevada’s indigent mentally ill would be left to wander the streets.

At the end of the day, a pediatric cardiac surgeon, beamed in to the assembly room from the hospital where he works in Las Vegas, congenially explained that if the legislature approves a proposed $2.5 million line-item reduction in Medicaid benefits to anesthesiologists, he won’t be able to operate on poor kids. Poor kids, who without surgery, will die.

And those aren’t even “the ugly cuts,” as Assembly speaker Barbara Buckley, among other people, calls the meanest of the state’s reductions (and which Las Vegas Sun columnist Jon Ralston has itemized). Around the same time in the Senate hearing room, things got so hot for Willden that the governor sent staff to pull him out of the proceedings. (The governor’s people also rescued budget director Andrew Clinger, but he’s back today.)

Nevada needs close to $900 million to cover all the expenses in its $6.8 billion biennial 2009-2010 budget. That may not seem like much if you live in California, where the state still scrounges around for $19.9 billion in cuts and performs imaginative revenue gathering to shore up its chronically ailing $90 billion budget (latest ugly cut there: $1 billion in medical care to inmates). But Nevada’s public services and state institutions already dangle on a thin thread: “Limited government,” as Alexandra Berzon points out in the Wall Street Journal, “is as much part of the folklore of Nevada as cowboys and mobsters.”

The state has no personal income tax; the state legislature meets for only 120 days every other year. More than half the state’s revenue comes from the gaming industry. And with the whole U.S. economy resembling the gaming industry, those revenues have been down. Way down.

Through all of this, the governor has been quite busy -- although perhaps entertaining is a better word. On Monday night, 12 hours before the $50,000-a-day special session was to begin, a local television news reporter caught up with him at the Reno airport at the same time that someone discovered his gal pal Kathy Karrasch hiding out in the airport bathroom. The currently unmarried governor at first declared it all a coincidence in an expletive-laden defense, but later owned up, and sort of apologized.

The governor’s busy social life, however, has not interfered with his efforts to offer up novel sources of revenue for his state, such as hiring a company called InsureNet to install surveillance cameras on the highways to catch insurance scofflaws (a plan that could earn the state anywhere from $30 million to $100 million in $250 fines). He has also suggested reducing the deductions mining companies use to reduce their state tax burden: Unlike Wyoming, which levies a 6 percent severance tax on the gross production value of the minerals its extractive industries remove from the ground, Nevada’s constitution guarantees the mining industry no more than 5 percent of its net profits. By midday Wednesday, the legislature had passed over both ideas.

Gibbons has also, notoriously, proposed saving $829,304 by ending state subsidies for adult diapers, which prompted the advocacy group Progressive Nevada to circulate boxes of Depends to make their point.

“These aren’t just ugly cuts,” griped the AARP’s Barry Gold about cuts to services for the elderly. “They’re horrific.”