Sisolak tells Nevada agencies to prepare 12 percent budget reserves
Gov. Steve Sisolak has directed all state agencies to prepare budgets that reserve 12 percent of the amounts requested for each year of the coming biennium.
Altogether that asks them to outline $1.073 billion in potential reductions out of the $9 billion in General Fund spending. In the memo instructing agencies to lay out what they would potentially cut, the Governor’s Finance Office said reserve decision units “must be complete and concise and must include a description of what is being recommended for reserve as well as the consequences of that recommendation.”
The memo directs all agencies to submit their proposed reserves by the close of business Nov. 20.
“Unfortunately and despite a responsible reopening of a majority of the state’s economy since May, Nevada continues to face significant revenue shortfalls and a historic economic and fiscal crisis as a result of this pandemic,” said Sisolak.
He said the agency recommendations will provide options as his administration develops the governor’s recommended budget for the coming biennium.
“I know they will do so responsibly and with the goal of protecting as much vital funding for critical services as possible,” he said. “Like Nevada families, the state must budget with what we have in front of us in our current situation as we continue to monitor projections and updates.”
“He’s doing the right thing,” said Sen. Ben Kieckhefer, senior Republican member of the Senate Finance Committee. “He’s getting the information necessary to prepare a balanced budget for the next legislative session.”
Kieckhefer said Sisolak is asking for options for additional cuts because he needs to build the budget around the revenues the Economic Forum gives him in December. State law requires the governor and Legislature to use the forum’s revenue projections unless they raise taxes or otherwise find additional revenue.
The forum will make preliminary revenue projections next week, giving the administration a pretty good feel for where the December projections will land.
“Hopefully 12 percent gets the job done but I’m not sure of that,” said Kieckhefer.
The $1.073 billion would reduce General Fund spending for the coming two fiscal years to $7.87 billion. According to the targets outlined by the finance office, the Department of Health and Human Services, K-12 and the university system in that order would be hardest hit because they are the biggest spenders of General Fund cash.
HHS will have to outline options for reductions totaling $371.7 million. The Department of Education is next at $279.1 million followed by NSHE at $169.8 million. The cuts for all agencies are split 50-50 between the two years of the biennium.
Sisolak said he will also continue to advocate for direct, flexible relief funding from the federal government for both the state of Nevada and its local governments. He said as virus cases continue to increase in Nevada and across the country, “the need to provide federal funding support to state and local governments grows every day.”