Schools must join in Nevada budget cuts
CARSON CITY – Nevada Gov. Jim Gibbons said Friday that public schools will have to share the pain of state budget cuts.
But he said taking K-12, public safety and the Department of Corrections off the list of those excluded from reductions will mean significantly smaller cuts for every other state agency – just 4.5 percent instead of 8 percent.
To accomplish that, school districts will have to cut a total of $96.2 million from the more than $2 billion in state funds they are budgeted to receive.
Gibbons also relented in his earlier refusal to consider part of the Rainy Day Fund to cover the revenue shortfall, saying he won’t dip into it until fiscal year 2009 but may cover up to $200 million in shortfalls at that time if necessary.
He and Department of Administration Director Andrew Clinger said they expect to have to cut as much as $440 million from the budget. That includes the $285 million in programs outlined Nov. 7, up to $30 million in one-shot projects, at least $10 million from the capital improvement program and the remainder – about $130 million – from the Rainy Day Fund.
They haven’t yet finished the revenue projections showing how they arrived at that total.
The only expenditures still protected from reductions, Gibbons said, are Clark and Washoe counties’ child welfare and juvenile justice programs; state worker, teacher and judicial raises; and Public Employee Retirement System funding.
The change means that, instead of more than 40 percent of the general fund budget being protected from cuts, less than 8 percent is protected.
Gibbons said the change is more fair because it spreads the cuts so that a few agencies don’t have to bear the entire burden. Also, he said, “it removes the real pressure for layoffs.”
He said there will be no layoffs under this plan.
“The more we start exempting individual agencies, the greater the burden on those who’ve got to make the cuts,” he said.
The final straw, he said, came “when we started looking at how deep the cuts would be in Health and Human Services.”
Clinger said HHS was looking at up to $187 million in general fund cuts, which also would cost the state another $100 million in federal matching funds – a total of nearly $300 million.
Now, HHS is looking at $78 million in reductions, which probably will cost another $50 million in federal funding – a much smaller hit.
Mike Torvinen, administrative services officer at HHS, said 8 percent was going to affect people in nursing homes, enrollment in the children’s health insurance program and the biggest HHS program of all, health-care services through Medicaid.
“We figured a very significant impact in health-care dollars throughout the state, enough to have potential impact on the economy,” he said. “Going back 4.5 percent will get to the point where it’s going to be significant, but we’re not looking at the devastation that would have come with an 8 percent cut.”
As to how the cuts will be made, Gibbons said he intends to rely on the agencies, school districts and regents to make most of the detailed decisions.
Gibbons said he expects agencies to begin making their cuts immediately and not wait until January. Clinger said many already have implemented savings plans, holding positions vacant and not starting new programs.
Gibbons pointed out that, if the economy rebounds as many economists are now saying it may, the cuts can be lifted in certain areas and the money released.