Nevada's leaders face more budget austerity

Nevada's leaders face yet more budget austerity
By Jim Christie

SAN FRANCISCO (Reuters) - The slump in Nevada's casino industry shows signs of reaching bottom, giving state leaders some hope the state's economic engine will warm up.

Sandoval, sworn in last month, opposes tax hikes and has proposed slashing spending and shifting revenues to close a $1.2 billion gap to balance the books over the next two-year budget cycle. He proposes a $5.8 billion general fund budget.

It was fueled by the implosion of the state's once-torrid housing market -- foreclosures abound in Las Vegas, where home builders once struggled to meet demand to keep up with explosive growth ....

'WE HAVE CUT AND CUT AND CUT'

There other signals that Nevada's economy is regaining its footing, albeit without enough strength to pare its 14.5 percent unemployment rate, the worst of any state, said Stephen Brown, director the Center for Business and Economic Research at the University of Nevada, Las Vegas.

A pickup in revenue from gambling can't come fast enough for Nevada's legislature. Even some of its Republicans are concerned the state's cost-cutting risks going too far.

"We have cut and cut and cut," Assembly Speaker John Oceguera, a Democrat, told Reuters in a telephone interview on Friday. "There's not much left to cut."

Oceguera said more cuts are inevitable and is concerned in particular about Sandoval's proposed reductions to K-12 and higher education of 9 percent and 18 percent respectively.

Sandoval has also proposed pay cuts, state employee layoffs and pushing some costs down to local governments ....

A 28-year veteran of the legislature, Rhoads [State Senator Dean Rhoads, a rancher near Elko, Nevada] said he expects gridlock over the plan for several weeks, adding that lawmakers also hope Nevada is poised to emerge from the nightmarish fiscal straits of recent years. "I never could have dreamed anything this bad," he said.