Saying the state's projected revenue shortfall has now reached $517 million, Gov. Jim Gibbons on Friday outlined 4.5 percent budget cuts for all general fund agencies that will reduce spending by $283 million over the biennium.
Another $20 million or so will come from cuts to capital improvement projects.
He said the rest of the reduction - just over $200 million - will come from the Rainy Day Fund, which he originally tried to protect from being drained.
The biggest hits are to the Department of Health and Human Services with $81.8 million in cuts and K-12 education at $92.7 million.
But, Gibbons said, there will be no layoffs or furloughs of state workers and that the cuts were designed to do as little damage to services as possible.
Director of Administration Andrew Clinger handed out a sheet showing that, if school districts cut new programs, they can save up to $63.9 million, leaving them just $28.8 million to take out of nearly $2.5 billion in general fund money in the Distributive School Account.
Gibbons said Nevada's 17 school districts will decide best where and what to cut.
"We don't have the ability to make those changes," he said. "They have to do that."
Superintendents made it clear at a Legislative Education Committee meeting they need more time, possibly a couple of months to make the cuts because they have to put them before their elected school boards.
They also argued they should be exempt from cuts.
Gibbons originally did exempt education, but said he changed his mind when he saw the damage larger cuts would do to Health and Human Services.
Gibbons said districts should act quickly because the longer they wait, the worse things will be. He also said their next quarter's check from the state treasury in April will be reduced.
While Secretary of State Ross Miller argued earlier this week the Board of Prison Commissioners should decide where and how to reduce the Department of Corrections budget, Gibbons said Friday he has finalized those cuts as well, taking $23.4 million out of prison spending for the biennium.
Miller argued that the board, which he sits on with Attorney General Catherine Cortez Masto and Gibbons, has authority over corrections and that the cuts should be reviewed and decided there in a public meeting.
The board voted to try to schedule such a meeting even though Gibbons maintained the decision was his, not the board's.
Miller issued a statement after the cuts were announced objecting to the governor's actions.
"This has been a flawed process from the beginning, veiled in secrecy with arbitrary deadlines and a complete lack of transparency," he said. "The timing of the announcement is particularly surprising given the fact that just three days ago a spokesperson for the governor indicated that the cuts would likely be delayed until after the next Board of Prisons meeting."
Questioned about cuts in prison medical services in light of ACLU claims Nevada's inmates are getting unconstitutionally poor care, Clinger said the reduction there is in positions that the department has been unable to fill.
He pointed out how difficult it is to get medical professionals to move to rural Nevada. Gibbons said DOC Director Howard Skolnik is working with the ACLU to avoid a legal battle and fix any problems there.
Miller isn't the only one who won't have a vote in the cuts. When all is said and done, the state's ending-fund balance will be about $130 million, according to Clinger. The Legislative Interim Finance Committee doesn't get a say in the cuts unless that fund drops below $80 million.
Health and Human Services Director Mike Willden said he was proud his department was able to make those cuts without significant damage to services.
He said the most significant damage is the state will have to cap Nevada Check Up program at 30,000. The program provides health care coverage to children of families who can't afford it.
Willden said there are now 29,178 in that program so, later this year, there will be a waiting list.
He said that cap runs afoul of a federal rule saying a cap on Nevada Check Up ends another program that is now serving about 100 pregnant women. But, he said, the state will do everything possible to make sure those women are covered somehow until they give birth.
"They will not be without prenatal care," he promised.
He said physician pay increases in Medicaid will be deferred, saving about $17 million.
He said the 22-bed psychiatric hospital in Las Vegas will open in February, triage centers in Reno and Las Vegas will stay in business and that Early Intervention Services, Child Mental Health and the autism program will remain intact.
Willden said Child Care Assistance is being cut $1.4 million but there will be no immediate impact this biennium because that can be covered out of reserves. In Welfare, he said 25 vacant positions are frozen but that the TANF program itself wasn't touched.
Most of his savings, he said, come by freezing positions - 241 of them - slowing growth of programs and "phasing things in."
"I feel good about where we ended up," he said.
Gibbons and Clinger said many of the reductions are already in place. Clinger said many reductions including hiring freezes have been in effect at the agencies since October.
Asked if there might be more cuts down the road, Gibbons said he and his cabinet have taken the "most conservative approach" in making the cuts.
"Let's hope our pessimistic predictions are as bad as it gets," he said.
• Contact reporter Geoff Dornan at firstname.lastname@example.org or 687-8750.
On the Net
Complete documentation of the reductions has been posted on the Budget Division's Web site at budget.state.nv.us. Click "07-09 Budget Reserves" right under the division title at the top of the page.