Nevada budget crisis

Nevada is about to save money on state utility bills thanks to State Treasurer Kate Marshall (D-Reno).  Her plan to contract with LPB Energy was just approved in a contract up to $10 Million.

LPB Energy uses proprietary data management to maximize efficiency and lower utility bills.  There are no up-front costs for the service, and LPB is paid a flat 30% commission on savings.

Governor Jim Gibbons (R-Sparks) announced that there would not be any step or cost-of-living pay increases for state workers or school teachers in his proposed budget.

The plan is being predictably opposed by state workers and school teachers.  The union representing state employees may sue if this budget recommendation is passed.

SPECIAL SESSION BUSINESS

The special session ended in one day and largely without incident yesterday, with all bills for the bailout passing by more than a 2/3 margin.

The Assembly GOP staged a protest with their limited numbers, calling for state employee staff reductions, hour reductions and/or pay reductions instead of the $160 million credit line.

State Sen. Barbara Cegavske (R-Las Vegas) was the lone "nay" vote in the Senate on the line of credit bill.

The budget bailout special session is set to begin at 9:00am today, with new members of the legislature spending the morning taking photographs and being sworn in.

The business of the session will be to close a $340 million budget deficit that remains for this fiscal year.  Elected officials on both sides of the aisle have said that this is not a permanent fix of any sort, and the special session is intended only to get the state through this fiscal year.  A more permanent budget solution will be addressed in the next regular session in February.

The plan includes a $160 million line of credit that would only be tapped if cashflow requires.  The idea of financing state debt may prove to be the most contentious issue of the session, drawing fire behind closed doors from caucus members on both sides of the aisle.

It will be official as of 10:30am today, says fellow macrame enthusiast Anjeanette Damon of the Reno Gazette-Journal.  That is when Governor Jim Gibbons (R-Sparks) will issue the proclamation calling the legislature into a special session on Monday at 9am.

The final number for the budget shortfall is still being calculated, but is expected to be around $340 million.  The legislature will authorize a $150 million loan from a line of credit, and will raise the remaining funds through a number of cuts and the emptying of reserve accounts.

The slide into a recession is expected to continue this week as economic numbers are released.

Taxable sales and existing home sales reports will give an economic snapshot of the Nevada market, and the release of the third-quarter GDP numbers from the Commerce Department will show the bad news on a national level.

The Associated Press is reporting that proposed budget reductions that require legislative approval may force a special session in early December.  The state has a gap of nearly $300 million in the budget for this year, and rumors speak of a December 8th special session to take the legislative action necessary to close it.

University system chancellor Jim Rogers wants a $3 billion federal grant to fill our state budget deficit.  Success seems unlikely, but Rogers raises an issue of fairness in his request: Nevada ranks 47th in reimbursements from the federal government, getting 70 cents for every $1 sent to Washington, D.C. 

This could be seen as a smaller, more sensible component of the massive overall bailout plan.  For $25 billion you get an auto industry, but for $3 billion you can get a whole state.  With the numbers being thrown around Washington right now on bailouts, the chancellor's request seems almost reasonable.

Gaming regulators seemed to float the idea of lowering the minimum gambling age from 21 to 18 at a recent conference.  In a move that could boost gaming revenues, we would be the first state to help close the budget deficit by introducing young adults to wagering.  

Such a move would require a legislative change in the next session and the signature of the Governor.

One irony of the move is that a gambling age of 18 would allow high school seniors to help pay for their own high school education with gaming losses.

Even the world's oldest profession is not recession-proof.  Nevada brothels have seen a drop in traffic and per-visitor revenue. 

With increased haggling causing a drop in prices, customers may see more bang for their buck.