Las Vegas NowGovernor Gibbons Says Special Session May be Needed

Governor Gibbons Says Special Session May be Needed

Another special session of the Nevada Legislature may be needed after the November elections because of the state's severe economic decline that mirrors a national crisis, Gov. Jim Gibbons said Friday.

The governor said a special session may be necessary if decisions on major budget-cutting steps and other economies can't wait until the regular 2009 session, starting in February. But he added he has not yet discussed the idea with legislative leaders.

"I'm not going to rule it out at this point in time," Gibbons said, adding that a decision will hinge on "what the next few weeks bring."

Gibbons and lawmakers already have slashed the state's current budget, for the two fiscal years ending next June, by $1.2 billion.

That reduced the budget by nearly a fifth. For the coming two-year budget cycle, starting in July 2009, Gibbons has asked agencies to find ways to cut another 14 percent from their budgets.

Assembly Speaker Barbara Buckley has said the upcoming cuts may have to be closer to 20 percent, and Gibbons agreed that's a possibility if downhill economic trends persist.

"The problem is that ... we are probably 18 months away from any kind of turnaround in this economy," Gibbons said, adding that jobless rates are climbing and the $700 billion national economic rescue plan just approved by Congress will help but will take time.

Buckley, D-Las Vegas, is holding meetings over the next month with business leaders and community groups to gather ideas on how to overhaul the state's financial structure.

The Republican governor announced Friday that he's forming a task force to coordinate efforts of local governments getting federal funding to provide buyer assistance for foreclosed homes, rehabilitate homes that are blighted and demolish homes that are beyond repair.

The funds were authorized under a housing and economic recovery law passed by Congress during the summer, prior to the latest financial meltdown -- which in this week alone cost investors an estimated $2.4 trillion.

Most of the $72 million that Nevada is getting through the recovery act will go to southern Nevada, hardest hit by the state's housing crash. The task force will be headed by Kirk Clausen, Wells Fargo regional president. Economic analyst Jeremy Aguero also will serve on the panel.

Gibbons also has formed a commission to find ways of making government more efficient. That panel has come up with recommendations that could save hundreds of millions of dollars over several years.

The governor and top aides noted the revenue take for the state so far this fiscal year is about $285 million, which is about $18 million or 6 percent less than the amount that had been estimated in June.

Economic analysts say the current slump in key state revenues shows that Nevada is in a recession and the outlook won't improve in the short term. They expect unemployment in the state to jump to an average monthly rate of 8.6 percent next year and remain at that rate in 2010. The state's jobless rate in August was 7.1 percent, the highest in 23 years.

A recent report from the Rockefeller Institute of Government, a policy research organization, said Nevada's economy has declined more than that of any other state since January 2007, and could get even worse.

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