Despite the criticism from advocates, organizations and interest groups since releasing his executive budget Jan. 24, particularly regarding proposed cuts to education and health care services, Sandoval remains upbeat about the prospect of recalibrating spending levels and redefining the fiscal health of the state.
“I’ve said a number of times that if Nevada were a stock, I’d buy it now,” he told hundreds of attendees and members of the Reno Sparks Chamber of Commerce. “I know I get a hard time all the time talking about how optimistic I am, but I believe if we make the hard decisions now that we can change the status quo for good.”
Changes to the budget for the next biennium can be seen in $1.6 billion in proposed spending cuts. No new taxes have been offered and Sandoval said he intends to let a potpourri of increases enacted in 2009 sunset at the end of the current fiscal year.
“Nobody likes the budget-cutting process,” Sandoval said, “but these are the times in which we live, and we have to adjust.”
But the governor does propose to spend $5.8 billion — a $500 million increase over the Nevada Economic Forum’s projections.
“We made existing dollars work harder,” he said.
Those dollars largely come from a reallocation of room sales tax revenues, originally targeted for education, to the state’s general fund, as well as a loan taken out on insurance premium taxes the state receives.
Sandoval has credited his staff with ingenuity in developing the budget while critics have said the governor is engaging in a ploy of misdirection and borrowing against the future, with shaky legal cover by which to do so.
Sandoval’s budget also desires to usurp property tax revenues from Washoe and Clark counties to offset massive cuts in higher education funding. But county commissioners have repeatedly expressed opposition to such action, most especially because the state also appears intent on pushing down responsibility for providing certain public services to the local level.
“I understand that there is going to be debate on these issues,” Sandoval said in acknowledging the criticism he faces.
Though Sandoval said government is often the problem, he intends to pass legislation that would establish a public-private partnership for new economic development initiatives, including an investment of $10 million to attract and recruit new businesses to the Silver State.
“Nevada’s economic development efforts are not well coordinated and sometimes conflict with each other,” Sandoval said.
Looking for new development models and engaging private industry are necessary reforms, Sandoval said. But jobs continue to be the biggest indicator of economic recovery, he added, and the state’s unemployment rate doesn’t give much promise in this regard.
“The real key to Nevada’s future success is just not a retooling of the state budget or controlling state spending or even creating a new framework for economic development,” Sandoval said. “You and I know that the real key to success is to get Nevada working again.”
Sandoval defends his no new taxes stance with this concept in mind, insisting that stability in the state’s regulatory and tax structures is paramount.
“I want an environment where businesses can start hiring again,” he said.