Guinn warns of possible $1 billion shortfall

LAS VEGAS - Nevada must change the way it does business or face a rocky financial future, Gov. Kenny Guinn has warned.

''I have a concern about the future of Nevada,'' he said. ''If we do business the same as we do today, with the same revenue stream, we will be $1 billion short by 2008. That will be devastating to us.''

Guinn said recent studies paint a dim picture of Nevada - per capita income per family has dropped, state residents' buying power has declined and there isn't adequate economic support for education, either at the kindergarten through 12 grade or at the university level.

''We've got a lot of information but not necessarily the solutions,'' Guinn told the Las Vegas Chamber of Commerce Wednesday.

With proper budgeting, Nevada's future can be redirected and protected, Guinn said, but the changes must come now and there will be ramifications.

''People must look at what we can afford, what we can do and how well we can do it,'' he said.

A comprehensive review of state government is now being undertaken to help determine how Nevada can better plan its budgeting process.

Guinn's office is also looking to cut the state's operational costs. It has trimmed 1,021 jobs from the state payroll and has instituted a hiring freeze.

''For the first time in the state we had an internal audit and the first recommendation (resulted in) over $2 million in savings, by implementing simple changes,'' Guinn said.

Without going into specifics, Guinn said he would like to see legislators create a budget that leaves $100 million or more in a surplus account for one-shot funding.

Guinn also said Nevada needs to boost its economic diversification, but it has to be selective about what kind of industries it pursues.

The governor said he has set what he calls ''megapriorities'' with education topping the list.

''If you only have so much money to spend, do you spread it out over 200 applications or do you try to make a difference through education?'' he asked.

Second on his list is safety and welfare, including Medicaid, and third is state employee benefits and training.