Budget cuts could force a few layoffs
September 20, 2002
Gov. Kenny Guinn laid out $37.5 million in additional budget cuts Thursday — including the elimination of 44 state jobs.
But Guinn said he expects agencies will be able to make most of those cuts through attrition and that nearly all of the workers who lose positions will find other jobs with the state.
Overall, the cuts total 3 percent, the amount Guinn said would be necessary to cover the rest of the state’s revenue shortfall.
Guinn said he held off making the cuts as long as possible to make sure his decisions will carry the state and its agencies through until the Legislature opens in February 2003. “I’m going to do this once. That way they know what they have through the rest of this year,” he said.
All of the lost jobs are in Human Resources and Corrections — 22 positions apiece. In terms of fiscal cuts, Human Resources was hit hardest, losing $15.9 million of the total. Those cuts will cost Human Resources agencies all of the $10.4 million in lost federal matching funds.
As a result, many of that agency’s new programs and enhancements in services to the poor, sick and disabled citizens will be on hold until the Legislature convenes.
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The governor said all of the agency reductions were based on recommendations made by the heads of those agencies. He said he gave them as much flexibility as possible in making those choices because they know best where to cut with the least damage to vital programs.
The university system took the second-largest hit, cutting programs a total of $11.1 million. The individual campuses and programs were left to decide how and where to make the specific reductions in programs.
Finance Vice Chancellor Dan Miles said the university system receives 19 percent of the general fund budget but was suffering nearly a third of the total cuts.
Guinn said during his Thursday news conference that those programs are likely to contain the most controversial cuts and are highest on his list to restore once the 2003 Legislature is in session.
Budget Director Perry Comeaux said a key consideration was how to avoid losing any more federal matching money than absolutely necessary.
Corrections lost 22 positions, but only about $5.1 million in total funding. A total of nine positions were cut from Prison Medical Care and six from Jackie Crawford’s administration. Individual prisons lost only one person apiece except for Nevada State Prison on Fifth Street where four were cut in part because two old units there are being shut down.
Comeaux said local governments in Clark and Washoe counties will share in the pain as several of the “temporary” cuts on Guinn’s list will force them to pick up services now funded by the state. The largest on that list is the $1 million reduction in Health Aid to Counties, leaving only about $300,000 in state funding there.
Guinn said those two counties are large enough and financially stable enough to absorb those reductions at least for a while. He said efforts were made not to hurt the state’s smaller, less prosperous counties.
In Public Safety, more than $840,000 of the $1 million cut came from Parole and Probation’s $27.8 million budget.
And the plan withholds $156,500 from Nevada’s share of the Tahoe Regional Planning Agency budget. That matches California’s decision to hold back $313,000 from TRPA since the states split the cost 2 to 1.
Along with the other budget reductions and decisions made this year, Guinn said those cuts bring the total budget reductions and savings to $290.5 million for this two-year budget cycle. He said that is very close to the projected shortfall of $293.8 million.
A shortfall in sales tax collections combined with slumping gaming numbers, to leave state government an estimated $162.4 million short of what was budgeted for this biennium. That same sales tax problem left Nevada’s 17 school districts $54.4 million short — which adds to the state problem since the law requires the state to make up that funding.
Guinn said he kept his promise not to ask reductions in education funding so that public schools around the state don’t have to reduce programs and services.
Another big piece of the shortage is Medicaid where the recession and effects of Sept. 11, 2001, have driven caseloads to 161,000 — 30,000 higher than projected. The result is a $26 million hole in the budget. Welfare caseloads are well above what was budgeted.
He said, it will be up to his administration and lawmakers to fix the state’s tax system so that it generates enough revenue to cover future growth and program needs.
“This is not all 9-11,” he said. “This is partly our systemic problem.”