State agencies bracing for additional cuts of 15 percent or more; first part of process nearly done

Friday, Nov. 19, 2010 | 3:04 p.m.

That’s the word from some internal state emails I have obtained, insight from a state staffer with knowledge of the coming cuts and budget czar Andrew Clinger.

Clinger told me today that the Sandoval administration is anticipating that the Economic Forum will land on a figure of about $5.3 billion and to get there would require 15 percent additional across-the-board cuts – on top of existing 10 percent reductions. My state government insider relates, as you will see from his email below, that translates into “thousands” of layoffs. Clinger could not confirm that, saying this is an “iterative process” and that the governor ultimately has to make the final recommendations. He also said the administration does not plan to simply take a broadsword to the budget – that is, Sandoval plans on prioritizing the cuts, not simply cutting every agency by the same percentage.

Clinger also confirmed that there is consideration, as you will see in the email, of a plan, introduced but never heard in 2009, to change how Public Employee Retirement System benefits can be purchased. Clinger said changing the benefits system could save a lot of money – he said or example, that a longtime employee could cost the state $200,000 to lay off.

Clinger said when this round of data gathering ends Monday, budget officials will give Gov.-elect Brian Sandoval several options and that further requests for agency cuts may be made. This is not the beginning of the end but the end of the beginning, as Churchill put it.

Below you will see some of the email correspondence I talked about and at right you will see some documentation of what is being sent to agencies.

The email:

1. Agencies have been called in by the Budget Director since the end of last week, and told to cut millions of additional dollars from their budgets (and sworn to secrecy). In my particular Department's case, it amounts to an additional 20% cut (added to the earlier 10% cut mandate). Not sure how each Department or Division was calculated as to their share of the new cuts as this information is not being provided by the Budget Director - just told that's what it is, just do it. Layoffs in my Division alone will be almost 20% of total staff (and I work for a public safety related agency). Anticipated layoffs for the entire state government, will have to run into the thousands (to be added to the State's existing unemployment rate) as a result of the new Administration not wanting to extend the sunsetted tax hikes.

2. The new administration has informed agencies they are planning a bill draft that will eliminate NRS 286.3007 that requires purchase of PERS credits for State employees who's position's are eliminated so not to play for any termination costs for laid off employees. As such, many state employees that are just a few short years from retirement, will be out on the street with nothing.