Las Vegas Sun

March 28, 2024

STATE BUDGET:

Layoffs can be avoided one more time, but it’s the last time

Updated Sunday, Dec. 7, 2008 | 11:55 a.m.

Gov. Jim Gibbons, flanked Friday by a somber chief of staff and budget director in his office, signed the proclamation calling for another special session to cut the budget.

There will be votes Monday to cut services. The state will sweep up unspent money from various accounts. Legislators will consider short-term financial finagling to make up the $342 million shortfall.

But layoffs won’t be a part of the package.

As in nearly all other rounds of reductions made over these past 18 months of fiscal despair, state employees will be spared the unemployment line.

During the state’s economic tumble, state leaders have cut $1.5 billion.

Yet only $311 million of the cuts have been to operations — the spending on salaries, services, Medicaid reimbursements and other ongoing costs. That includes $73 million in cuts to services expected to be passed during the special session Monday and Tuesday.

The remainder has come from unspent money drained from state accounts and a rainy-day fund, and by delaying capital projects — one-time expenditures for buildings and repairs.

Through all of this, there have been only 35 layoffs.

For all but the most limited-government conservatives, saving jobs has been a priority.

But with the state facing another $1.5 billion shortfall for the upcoming two budget years, budget officials and legislative leaders say there are no more pots of money to raid. No more one-time projects to delay.

Unless revenue increases drastically, massive firings seem inevitable.

The Gibbons administration has made avoiding layoffs a priority. In September 2007, when the first revenue numbers came in below projections, Gibbons immediately froze hiring for all but a few positions.

Currently, about 2,700 positions, or 14 percent of the state’s 19,000 positions, are vacant.

“Unemployment is up and we’ve been trying not to put more people out of work,” said Josh Hicks, Gibbons’ chief of staff. But, he conceded, the budget “is heavily dependent on salaries. We don’t have the cushion of one-time money.”

Assemblywoman Sheila Leslie, D-Reno, acknowledged the state has drained accounts to avoid layoffs and cuts to services. She noted, though, that demand for — and the employees to provide — services such as welfare, food stamps and Medicaid assistance increase during tough economic times.

The easier solutions the state has used to weather tough times are no longer an option, she warned.

“I don’t want people to think we’re Chicken Little — the sky really is falling,” she said. “We’ve been doing our best to prop up the sky as best as possible.”

For the more fervent conservatives, the lack of layoffs means “real” budget cuts haven’t yet begun.

Assemblyman Ty Cobb, R-Reno, complained that it “means we haven’t made the hard decisions yet. When we’re cutting textbook budgets, it shows how screwed up our thinking is.”

Cobb and other conservatives have long criticized the pay and benefits of public employees, which they say are not in line with the private sector.

Steven Miller, vice president of the free-market think tank Nevada Policy Research Institute, said he’s not surprised there have been so few layoffs of state workers. To do so, he said, would require political will and clout that Gibbons simply doesn’t have.

“He’s sort of been gelded, politically. So he is not in the position to pursue significant government reforms,” Miller said.

Yet Nevada state government is far from a bloated bureaucracy. A recent study by the Greater Las Vegas Chamber of Commerce found that Nevada has the fewest government employees per capita in the United States. And the number of state workers per resident has been dropping over the past 20 years.

In 1989, there was a peak of 10 state employee positions per 1,000 residents. Today, there are seven state employee positions per 1,000.

Dennis Mallory, head of the American Federation of State, County and Municipal Employees, the union that represents many state workers, said Gibbons and legislative leaders deserve credit for minimizing layoffs.

But, he warned, “if this continues to go the way it is now, they’ll start cutting down programs. When they’re shutting down programs, people are going to be laid off.”

The state is facing a 34 percent cut in spending for the 2010 and 2011 fiscal year. And if, as most lawmakers say, there is no more easy money, layoffs will become necessary.

Mallory estimated that “a couple thousand” jobs would be lost under that scenario.

Republican and Democratic legislative leaders, including Assembly Speaker Barbara Buckley and Senate Minority Leader Bill Raggio, have said there is no way the budget cuts could be that large.

Yet, on Friday, Gibbons said he would veto any tax increase.

If he does, and succeeds, his record of avoiding layoffs will end.

(Editor's Note: This story was corrected. An earlier version referred to Medicare instead of Medicaid.)

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