Governor proposes salary cuts to avoid some layoffs

By Cy Ryan

Thursday, Jan. 15, 2009 | 6:01 p.m.

CARSON CITY – State workers will take a financial hit, but largely be spared layoffs under Gov. Jim Gibbons’ $6.1 billion two-year budget.

The governor plans to reduce the salaries of state workers and school teachers by 6 percent effective July 1, avoiding the alternative of laying off 9,000 to 11,000 employees. The average salary of a classified state worker is $50,000 and the average pay of an unclassified employee or manager is $84,000, according to state Budget Director Andrew Clinger.

The budget includes the 6 percent reduction for the state’s constitutional officers but does not hit Nevada Supreme Court justices or the district judges.

The 6 percent pay cut would save $435.2 million of the projected $2.3 billion shortfall.

In addition to pay cuts and higher insurance premiums for state employees, the governor’s budget envisions laying off 375 workers and eliminating another 1,100 vacant positions. Some agencies will be eliminated and others will be consolidated. The state will not give merit salary or longevity increases to workers for the two years outlined in Gibbons’ budget.

There are questions about whether the 6 percent cut can be applied to school teachers who may be in the middle of their contracts. Josh Hicks, chief of staff for the governor, said the contracts are being negotiated now for the next school year. And if they are already final, they can be re-negotiated. The school districts, he said, could avoid the pay cuts by reducing other expenditures.

The insurance subsidies for state workers and their dependents are also being reduced. For this fiscal year, the state contributes $626 per month per worker or 90 percent of the needed premium. That subsidy will be reduced to 25 percent of the premium, which is expected to rise next fiscal year. Employees now pay up to $28 as their share of the health insurance premium and between $62 and $194 for dependent coverage for a family of four.

The subsidies for insurance coverage for retired state workers will also be reduced. The state pays an average of $410 per month in subsidy and that will be reduced by 25 percent in July and another 25 percent in July 2010.

The subsidies for those who retire after July 1 and for those who have Medicare coverage, will be eliminated. Those retirees can still get the health insurance coverage but would have to pay the full premium.

The insurance reductions would save $158.4 million.

The planned 375 layoffs would come mainly from human resources and corrections. Gibbons plans to close the century-old Nevada State Prison in Carson City, laying off 128 workers. Staffing at the state mental health hospitals will be reduced from 2.4 staff members per patient bed to two, coinciding with the national average.

Eliminating the 1,427 positions will mean shorter hours at some state parks, cultural centers and museums.

The governor is planning to cut the staffing in the Office of Nuclear Projects from seven to two employees and move it under the direction of the governor.

Questioned about this reduction when debate of the project is coming to a head before the federal government, Clinger said most of the expenditures in the agency are for outside contracts. Hicks said, “It will not impact our ability to fight” Yucca Mountain.

The state’s tourism and economic development agencies will be consolidated. The 0.375 percent of the hotel-motel room tax that now supports the state Tourism Commission will be taken into the state’s general fund and the tourism budget will be reduced by 50 percent.

Other department mergers will include the housing division being combined with the manufactured housing division, and the mortgage lending division with the financial institution division.

The state Consumer Affairs Division, charged with investigating deceptive trade practices, will be shut down and its duties transferred to other agencies. Consumer Health Protection, which issues permits and inspects food establishments, will be closed.

The state Insurance Division will not continue to receive any general fund support and exist entirely on the fees collected from the industry.

Cy Ryan may be reached at (775) 687 5032 or [email protected].