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August 27, 2014

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Salaries of public workers to feel budget bite

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AP Photo, Cathleen Allison

Danny Thompson, a lobbyist for the state AFL-CIO, speaks Monday, Feb. 14, 2011 at a rally in front of the Legislature in Carson City.

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Democrats in the Legislature have railed against the effect of budget cuts on schools and universities, people with disabilities and people without jobs. But they have stayed conspicuously silent on one of Gov. Brian Sandoval’s cuts — his proposed 5 percent whack at state workers’ pay.

That’s an ominous sign for all public-sector employees in Nevada — not only the 30,000 state workers, but the other 100,000 state and local government employees.

The Legislature has no direct control over most employees of school districts, higher education and various local governments. But lawmakers’ actions on state workers and local budgets will almost inevitably roll down to those employees.

State workers protested in front of the Legislature on Monday, claiming they will shoulder a disproportionate share of the budget burden if Sandoval has his way. The event, organized by the American Federation of State, County and Municipal Employees, which represents state workers, drew about 50 people.

Speakers, including Senate Majority Leader Steven Horsford, praised state workers, said increases to tax revenue should be considered, but none directly opposed Sandoval’s 5 percent proposal.

Since the beginning of the Great Recession, public employees have seen varied effects on pay and benefits. Below is a guide to what has happened, and what might happen.

State workers

Past:

Legislators and former Gov. Jim Gibbons decided to go ahead with a scheduled cost of living increase of 4 percent in 2008 despite warnings of a downturn.

Since then, state workers have suffered the most from falling tax revenue.

Legislators replaced Gibbons’ proposed 6 percent cut with a monthly furlough day equivalent to a 4.6 percent pay cut although pensions are held harmless. Employee costs for retirement and health benefits have risen also.

Judicial employees didn’t take furloughs; legislative employees are not taking furloughs during the four-month session.

Future:

Sandoval proposed a 5 percent cut for state workers, suspending step increases and merit pay. The pay cut, which would replace the furloughs, would also affect pensions, helping the state save about $90 million.

State Sen. James Settelmeyer, R-Minden, whose district includes Carson City, said “I still think furloughs are more appropriate, but that might not happen.”

Higher education

Past:

Some university employees, such as maintenance staff and administrative assistants, had to take the same furloughs as state workers. Nontenured professors also took a furlough.

But tenured faculty were protected by contracts. The administration asked these employees to take an “equivalent” of 4.6 percent by increasing their workload. How these are done can vary and there have been complaints about inequity among higher education faculty.

Dale Erquiaga, the governor’s senior adviser, said Sandoval has received a number of complaints about tenured higher education faculty being spared furloughs.

Future:

Sorry, professors. The Board of Regents this summer passed a new rule: The governing body can cut tenured faculty pay up to 6 percent if the state orders a similar cut to its employees. Nevada System of Higher Education Chancellor Dan Klaich, who worked with faculty leadership to pass the regulation, has warned the system is in danger of losing its best professors.

K-12 (teachers, administrators, support staff)

Past:

There are 17 school districts in Nevada. Each bargains separately with employee associations.

In 2009, after the Legislature passed its budget, the Clark County Education Association approved a contract that maintained “step increases,” raises based on years of service and education. Critics said the union was choosing its members’ pay over students.

Last year, Clark County agreed to a freeze in most step increases.

Washoe County educators also froze most step increases and took two furlough days.

Future:

Starting with Sandoval, and echoed by legislators, there is growing drumbeat for teachers and other school employees to take some type of pay cut. Sandoval’s administration says 70 percent of the cuts it has proposed to school districts could be absorbed through employee pay or benefits.

Clark County School Board President Carolyn Edwards said it was difficult to know what kind of concessions the district will ask for until it sees what the Legislature passes.

“I’d like to see all our employee groups make concessions,” she said. “What those are we don’t know yet.”

She said if unions don’t make salary concessions, a bigger part of the budget will be layoffs.

Local government

Past:

Local governments have a mishmash of employee associations and unions with which they negotiate. Employee groups in Clark County and the cities have made some concessions, suspending or lessening pay raises or cost of living adjustments.

Future:

When business groups such as the Las Vegas Chamber of Commerce complain about public-employee pay, they are not talking about state workers, or even teachers. It’s primarily local government employees who rank among the best paid in the nation compared with other states.

The abuse of sick leave by some Clark County firefighters is just the latest sign pointing to some sort of reckoning for local government employees. As the state prepares to take money from counties, local government employees will feel the squeeze as contracts are negotiated.

Why the difference between the state and local government employees? Local government employees have collective bargaining rights. If there’s an impasse in negotiating a contract, it goes to an arbitrator.

“Obviously, what happens at the Legislature will affect local governments,” said Rusty McCallister, president of the Professional Firefighters of Nevada.

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  1. State workers are not exempt from the current financial meltdown, nor should they be. A 5% cut is better than a 100% cut such as my wife took nearly 2 years ago when she was put on an "on call" basis. Since then, she's worked in fits & starts and has collected unemployment benefits, also in fits & starts. There is no way we can plan a budget since we have no idea, from week to week, exactly how much money we will have to work with. So, while I may sympathize with state & local workers having to take pay cuts, I think they are appropriate considering the state's budget crisis.

  2. Gotta resolve the source of revenue problem. Can only cut services so far. Given the current climate of reduced service there will be NO new businesses coming into the state. Unemployment will remain as the number one in the nation.

  3. The economic structure of the world has changed which is forcing the federal and state governments to respond differently than in previous recessions.

    Globalization as well as national and state debt has collared our old model. Our economy is driven by productive and profitable business. The recession will drag on until we see top and bottom line growth in business.

    More debt doesn't move us forward, it further restrains us. HOW DO WE BECOME COMPETITIVE GLOBALLY WITH OUT MORE DEBT? Answer this question and we start to move forward.

  4. you need to increase revenue - hmmm, it is called taxes and fees

  5. I am proud to ride into this in Doug Unger's wake, and I would like to add a couple of things.

    One, the state of Nevada relies heavily on regressive taxes such as the sales tax. Cut pay to save at one end, and how much does revenue drop at another end? I do not pretend to know the answer, but I know that if I am paid five percent less, I will buy less, and others will suffer as a result while, somehow, the mining industry continues to extract wealth and take it elsewhere.

    Two, when the system instituted pay cuts last time, I suggested to a couple of people that the cuts should be graduated. Yes, it would be terrible for anybody's pay to be cut. But an administrator or even professor who makes in the six figures can absorb a cut far more easily than an administrative assistant or beginning faculty member at CSN. Naturally, nothing came of this.

  6. There are many people who take advantage of Unemployment benefits and go way to far with the "poor me I can't find a job after two years" (I can say this because my mom is one of those people).

    ***

    Statewrkr:

    Guess what, kid? Mom probably CANNOT find a job!!! Since she obviously has an adult child - YOU - she is no spring chicken. That means she is being discriminated against in many ways from employers who feel she is too old to hire and is too young to get social security. So she is in a very difficult position.

    You afraid she is going to ask YOU to help her a little????

  7. We don't have a deficit because we pay too little in taxes.....we have a deficit BECAUSE OF OVERSPENDING!

    The taxpayers did not create this deficit, the politicians did. They need to fix it without raising any taxes, period!

  8. "Establish a lottery dedicated to funding education."

    California did that exact thing in the mid eighties and guess what......they spent the money elsewhere, and continue to do so.

    The California Lotto was created to forever solve the state's education funding problems, and of course it has done nothing to improve it.

  9. "Everyone should pay there share."

    You know who doesn't pay their fair share? The poor. They utilize all of the government assistance programs but they do not contribute their "fair share" to them.

    It's really the middle class that always pay more than their "fair share" and the middle class is getting tired of it!

  10. Barrett, I was one of the poor. I never received a handout from any government agency, family or friend.

    My only point is I'm tired of hearing the phrase "pay their fair share". If that was really the issue then we would have a flat tax where everybody pays the exact same tax percentage regardless of income......which is something any "fair share" proponent should support.