Who has sliced spending the most?

By David McGrath Schwartz

Saturday, Dec. 26, 2009 | 2 a.m.

With more budget cuts anticipated, state agency heads and advocates for services are preparing to make their cases on why they should be spared the ax this time.

The answer to one key question might help decide what gets cut among K-12, higher education, social services and public safety agencies:

Which agencies over the past two years of falling state tax revenue and budget cuts have reduced their spending the most?

Gov. Jim Gibbons has asked agencies to prepare budget-cutting scenarios.

First, he asked departments to prepare 1.4 percent and 3 percent. A few weeks later, he raised it to 6 percent, 8 percent and 10 percent, which would amount to as much as $437 million in cuts from March 2010 to June 2011.

Gibbons has also requested that the Economic Forum — five business leaders who project the amount of tax dollars the state will have available to spend — to convene before Jan. 19.

Democratic and Republican lawmakers argue Gibbons should wait before ordering more cuts and calling a special session of the Legislature. The shortfall over the past six months — it now stands at $67 million — can be handled with some financial sleight-of-hand, such as moving money budgeted for one year to the next and tapping a $160 million line of credit earlier than scheduled, lawmakers say.

We may be in the worst of the recession right now, but 2010 might be better, they say.

One factor that could intensify the competition among agencies and advocates: It’s unlikely Gibbons will call for across-the-board cuts, as he did in earlier rounds.

Administration officials have said, for example, it would be tough to cut more from the Corrections Department, where the state has avoided one-day-a-month furloughs because of concern for inmate and prison guard safety.

Budget Director Andrew Clinger said the administration is still waiting for the latest recommendations from the agency directors. But he said it was unlikely there will be across-the-board cuts.

Although some advocates use different methods to measure how much they have been cut — lost state dollars versus state, federal and other funding sources, for example — Clinger said total spending should be used to measure where cuts have been the deepest.

“You really have to look at, in my opinion, the total budget and all funding sources,” Clinger said. “A lot of what was cut out of the general fund was made up with federal funds. It’s important see the whole picture.”

Mike Willden, director of the Health and Human Services Department, said the agency has cut $400 million in four rounds of budget cuts in the past two years. Demand for services, meanwhile, has exploded — the number of people on food stamps, for example, has risen 85 percent.

As it is, the state is failing to process new applications for social services as required by federal guidelines. If the agency doesn’t address this, “we will expose ourselves to lawsuits, and expose ourselves to federal penalties,” he said.

Asked how he would cut 6 percent, 8 percent or 10 percent more, Willden said, “Like any other department in government, it’s going to be tough. These cuts won’t be an easy decision for me, the governor or anyone else to review.”

The most vocal opposition to the governor’s call to prepare for more cuts has come from higher education.

The latest edition of “The Alliance,” a newspaper produced by the Nevada Faculty Alliance, ran a story with the headline: Higher education “budget cuts greater than those of other state-supported entities.”

It was accompanied by a table showing state general fund dollars, which dropped 24 percent compared with the budget approved by lawmakers in 2007. After stimulus dollars were included, the cut was reduced to 13 percent; and after tuition-and-fee increases were added, the budget cut amounted to 5.7 percent.

Still, Jim Richardson, the Nevada Faculty Alliance’s lobbyist and a professor at UNR, said the trend of putting the burden on students and parents is unsustainable.

“I’m very concerned that some people seem not to be aware that there were dramatic differences in the cuts to public funding when you compare higher education to other agencies and K-12,” Richardson said. “That kind of collective amnesia will not serve Nevada’s interest.”

Chancellor Dan Klaich sent a letter to Gibbons arguing higher education has felt the brunt of the budget cuts.

“I know you will keep in mind that no major agency budget took a larger and more disproportionate cut than did the (Nevada System of Higher Education) last session,” Klaich wrote in the Dec. 8 letter. “In fact, at least one major state agency budget increased above last biennium’s levels, and all others absorbed smaller cuts than did NSHE.”

Klaich insisted he was not looking to hurt other recipients of state funding.

“I don’t want to come across as the guy who wants to get into someone else’s budget,” Klaich said. “I believe most other budgets are stressed. But higher education did take a disproportionate cut. There’s no way to argue against that.”

By comparison, state spending on K-12 education actually increased 9.29 percent in 2009 compared with 2007.

That increase, however, was offset by sharp decreases in local tax revenue, according to numbers provided by Clinger.

Lawmakers are hesitant to predict what areas will see further cuts if they’re needed, but they clearly have programs they think are priorities, even if they’re hesitant to say where cuts should come from.

Assemblyman Mo Denis, D-Las Vegas, a former president of the Nevada Parent Teacher Organization, said, “We’ve found ways to improve education, help education. But we’ve never fully funded the things that work.”

Health care is also important to his constituents — and another area he would fight to protect, he said. But he acknowledged that if you start exempting major portions of the budget, the amount left to cut shrinks.

“Education and health care are two of the biggest pieces of the pie,” he said. “When you have to make cuts, it’s not like you’re cutting something that’s not needed. It affects the state one way or another.”