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October 25, 2014

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Tension builds as Gibbons cloaks budget cuts in secrecy

With a deadline approaching this week for state agencies to submit proposals to cut their budgets by 8 percent, concern is mounting over the lack of transparency in Gov. Jim Gibbons' push to eliminate a $285 million fiscal shortfall.

Gibbons and his Republican administration have refused to make public, or even inform lawmakers who approved the state's $6.8 billion budget, what is likely to get the ax, leaving tens of millions of dollars in social programs aimed at the state's most vulnerable population - including the poor, the aging and the mentally ill - hanging in the balance.

"I don't understand all of this cloak and dagger stuff," longtime homeless advocate Linda Lera-Randle El said. "If you are elected to represent the people of this state, why would you not come forward and be honest? We need to know where we stand and where we're heading."

The lack of public vetting also has left Democratic legislative leaders in a state of uncertainty as the administration bores in on the cuts behind closed doors.

"They're keeping us in the dark," Assembly Speaker Barbara Buckley, D-Las Vegas, said. "We don't know what they're really looking to cut."

Senate Minority Leader Dina Titus, D-Las Vegas, said the governor's conservative anti-government approach to the budget crunch, sparked by slumping sales tax revenue, is making matters worse.

"It's not a very good way to make policy," Titus said. "When the state's in crisis, people don't want you to be partisan and an ideologue who is isolated from everyone's daily problems. They want you looking for solutions."

State Budget Director Andrew Clinger said all departments and agencies must submit their budget reduction proposals to his office by Wednesday so he can review them and make recommendations to Gibbons in early January. The governor will do the final trimming soon after.

This is the second round of proposals that the administration has asked the departments to submit in the past two weeks. The previous request was for a 5 percent reduction, but after tax revenue continued to decline, the threshold was upped to 8 percent. The administration has refused to disclose the earlier proposed cuts.

Clinger last week released a list of how much money departments are now being asked to cut from their budgets to meet the 8 percent threshold, which would make up most of the shortfall over the next two years, about $282 million.

Roughly 48 percent, or $3.3 billion, of the state's overall $6.8 billion budget, however, is being exempted from the cuts, Clinger said. That includes about $2.3 billion for K-12 education as well as funding for the Corrections and Public Safety departments, state employee pay raises and child welfare and juvenile justice programs.

The remaining departments and agencies, including the Gaming Control Board, the six constitutional offices and the Nevada System of Higher Education, are being called on to carry the brunt of the financial burden.

Nearly half of the proposed cuts, $140 million, is to come from the Health and Human Services Department, with higher education expected to make $102 million in reductions.

Health and Human Services Director Mike Willden acknowledged that he's facing a "heavy burden" as he prepares to submit his budget reduction plan to Clinger.

"I understand everybody's frustration," he said. "I don't want to cut out anybody. We'll present the plans and hopefully the governor and the budget office will see the big picture and the right decisions will be made."

Whatever is trimmed from his department, however, will be magnified because it will trigger the loss of matching federal money, Willden said.

That, he explained, could "double the hurt," raising the potential funding loss for social services throughout the state to nearly $300 million over the next two years.

Those at the forefront of the fight to preserve money for social services say the depth of the potential cuts is outrageous.

"It's kicking people when they are down," said Bob Fulkerson, director of the Progressive Leadership Alliance of Nevada, a government watchdog group. "Why is it that the weakest and the most vulnerable are the ones whose heads are on the chopping block?"

Late last week, Fulkerson sent a letter to Gibbons criticizing his administration's "closed-door, seat-of-the-pants" process and demanding information about a plan to privatize the state's mental health services.

Mark Nichols, executive director of the Nevada chapter of the National Association of Social Workers, said the budget-trimming effort borders on being inhumane.

"We don't want the governor to pit the interests of children against the interests of seniors or the interests of the mentally ill against the interests of families in need," he said. "Nevada deserves better."

In higher education, there is just as much outrage.

Chancellor Jim Rogers has set up a meeting with Gibbons on Monday to explain to the governor the "devastating effects" an 8 percent cut would have on the university system. Rogers has publicly said the cut will "eviscerate" the system.

Besides eyeing the department budget cuts, Clinger said, the administration is considering other cost-saving measures to help bring the state out of its deficit.

The administration is looking to see what can be trimmed from $70 million in one-time legislative appropriations to various charitable groups and how much of $195 million in capital improvements can be held back, he said.

Those ideas are supported by Democratic lawmakers and social activists, who want to steer Gibbons away from cutting human services.

But they say the governor could easily resolve the financial crisis if he tapped into the state's $267 million "rainy day fund," set up for fiscal emergencies. Gibbons' predecessor, Republican Gov. Kenny Guinn, used that fund when sales tax revenue declined dramatically after the 9/11 terrorist attacks. When the economy recovered, Guinn and the Legislature rebuilt the fund.

Gibbons, however, has made it clear that he prefers cutting government spending, a strategy that is supported by influential Senate Majority Leader Bill Raggio, R-Reno.

"This governor deserves some credit for being prudent and fiscally responsible," Raggio said. "He's on the right track. He's asking for information to try to make a valued judgment."

Veteran state Sen. Bob Coffin, D-Las Vegas, who has served alongside Raggio on the Senate's Finance Committee for the past 17 years, disagrees.

"The governor can buy time with the rainy day fund," said Coffin, who suggested Gibbons call a special legislative session in January to get approval to dip into the state's reserves and plan for potential future deficits. "To be practical, you want to draw on all the resources at hand."

Coffin, who recalls criticizing former Gov. Bob Miller, a fellow Democrat, when he cut millions of dollars out of the mental health budget in 1991, said he has "grave concerns" about the way Gibbons is approaching the latest crunch.

Gibbons, Coffin said, could calm nerves if he disclosed exactly what he's looking to cut.

Exempting some departments from the reductions also is a bad idea that puts too much strain on budgets that would make up the difference, Coffin said.

"I'd rather see everybody involved in the same mess so that everybody is pulling together and we're not having these special-interest groups knifing each other," Coffin said. "You've got very good people turned against each other."

Coffin explained that it isn't easy to get back social services once they are cut.

"It takes many years to recover," he said, adding that mental health services still haven't returned to the level they were before Miller cut them 16 years ago.

Guinn, who has been at odds with Gibbons over the past couple of years, was reluctant to criticize the governor's strategy.

"Everybody's got their own style," Guinn said. "He's facing what every governor has to do."

But Guinn did offer some friendly advice.

"Every cut hurts," he said. "You always want to have as much public input as you can so that as many people as possible can be involved in the process."

Sun reporter Cy Ryan contributed to this report.

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