Nevada gov't-unions face big dues hit

Layoffs may be coming to Nevada state government. Monday could be remembered as Black Monday in state employee annals, as Gov. Jim Gibbons will outline another round of budget cuts -- perhaps as high as 6 percent, according to some estimates -- because the faltering state economy has left government with an $800 million budget shortfall.

Dennis Mallory, chief of staff for American Federation of State, County and Municipal Employees Local 4041, said Tuesday there is no way Gibbons can avoid layoffs since state agencies have already had to absorb $565 million in cuts he imposed in January.

"If there are any staff reductions in prisons there would be an imminent threat to the community," said Mallory, who heads the union formerly known as the State of Nevada Employees Association. "Who's to stop prisoners from jumping over the walls?"

He added that if Nevada Highway Patrol officers are laid off, and drivers don't see a trooper for 100 miles to 200 miles, then who is to stop them from putting the pedal to the metal?

But Ben Kieckhefer, Gibbons' press secretary, said the administration still has not made a final decision on where cuts will be made.

"I don't know how anyone can say with certainty there will be layoffs," Kieckhefer said. "The governor will try to avoid layoffs at all costs."

Mallory admitted he doesn't know yet where the cuts will be made, or how many people will be laid off. But he said he's certain Gibbons has no choice but to order layoffs.

The agency most affected, according to Mallory, will be the state's largest -- the Department of Health and Human Services. That department has come under fire in recent weeks because its Bureau of Licensure and Certification did not regularly inspect Las Vegas medical clinics where careless medical practices might have exposed 40,000 people to potentially fatal blood-borne illnesses.

The economic crisis gripping state government is the worst since 1992, when Gov. Bob Miller cut spending by $173 million and laid off 236 people. The state budget then was less than one-third of today's.

Gibbons will hold a briefing Monday to explain what actions he might take to balance the state's $6.8 billion two-year budget at a time when gaming and sales tax revenues -- the two largest revenue sources -- continue to fall below last year's figures.

The governor and legislators built the two-year budget expecting revenues from all tax sources would permit $1 billion in spending increases. It now appears actual growth will be about $200 million -- or less than 2 percent a year.

At the same time, the Consumer Price Index has risen by 4 percent over the last year and a state population estimate due later this week will show Nevada's population increased by 3.6 percent.

Budget Director Andrew Clinger said Tuesday that no decisions have been made yet on where to cut.

Monday's briefing will feature a presentation on many areas that the administration could cut to cover the deficit, he said. Key legislators have been invited to the briefing.

Clinger, who made no mention of potential layoffs, would not say whether the governor has decided on across-the-board cuts to state agencies.

But if such cuts were approved, Clinger said it would require steeper reductions than the 4.5 percent cuts Gibbons imposed in January.

When he made the cuts in January, Gibbons timed them to take place over the last year and a half of the state's two-year budget. However, almost all of the $180 million to $240 million in additional cuts being looked at now would be made during the fiscal year that begins July 1.

Nevada government is operating under a budget that ends on June 30, 2009.

Additional reductions in state funding also may lead to reductions in personnel or services in the Clark County School District. The district has already identified $17.04 million in cuts for fiscal 2008. That's the lion's share of the $22.4 million 2008 reduction to Nevada K-12 education brought on by Gibbons' call for cuts in state spending.

The cuts are accounted for mainly by deferred spending on full-day kindergarten, empowerment schools, remediation and special programs. In Clark County, spending on new technology has been postponed and the replacement of school buses has been delayed.

Superintendent Walt Rulffes did not want to speculate on where future cuts would fall, but said that it's getting increasingly difficult to keep them from directly affecting education programs.

"Clearly, we're getting into staffing issues," said Rulffes, who met with Gibbons on Tuesday. "I honestly don't see how this can not impact services."

Assembly Majority Leader John Oceguera, D-Las Vegas, said Democratic leaders are looking for options for the governor to consider before making new cuts. He said they want the state to postpone already approved building projects.

"I hope we don't end up in a position where we have to lay off people," Oceguera added.

Sen. Bob Beers, R-Las Vegas, said Gibbons faces a simple choice: cut services or increase taxes.

"It does not make sense to kick the populace when it is down by increasing taxes," he added. "We would all rather have times of plenty, but that is not the case."

Layoffs are a clear possibility, according to Beers, although he has not discussed it with Gibbons.

Assembly Minority Leader Heidi Gansert, R-Reno, favors across-the-board cuts because otherwise some agencies would face excessive spending reductions.

"It is going to be more difficult this time," she said. "There are times you have to make do with less."

Gansert added she would oppose tax increases because it would be an increased burden on businesses and residents dealing with a sluggish economy.

Sen. Bob Coffin, D-Las Vegas, will oppose any move by Gibbons to cut state spending further unless the governor receives the consent of the Legislature's Interim Finance Commission. Coffin has maintained that state law required Gibbons to get consent from the Legislature for any cuts.

Legislators, however, declined to file a legal challenge to Gibbons' budget cuts in January.

Coffin said Gibbons should realize it would make sense politically to involve the Legislature in these decisions. The governor would not have to take the wrath alone from special interest groups if their projects are dropped or state employees are laid off, he said.

Much of the state's economic decline has been blamed on plummeting home sales in Nevada.

Gibbons ordered state agencies in January to cut spending by 4.5 percent to cover about half of what then was estimated as a $565 million deficit. He also postponed about $20 million in building projects, kept 800 state positions vacant and capped the enrollment in child health care and other programs to cover another $40 million of the shortfall.

And he pledged to seek legislative permission next February to take $232 million out of the state's $267 million rainy day fund to cover the remainder.

But the state economy, particularly the gaming industry, has not rebounded since January, and Gibbons on Monday might have to cut an additional $240 million or more in state spending.

Gaming revenues have fallen dramatically over the past three months. Since the beginning of the fiscal year, on July 1, the state has received $518 million in gaming taxes, or $19 million less than the same period a year earlier.

Meanwhile, state sales tax receipts for that period are $490 million, or about $17 million less than the same period a year earlier.


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