For first time in four years, state officials build budget without cuts

By David McGrath Schwartz

Friday, March 16, 2012 | 2 a.m.

For the first time in four years, state agencies won’t be asked to cut spending as they begin assembling the budget.

“You are not being asked to cut your budgets,” budget Director Jeff Mohlenkamp said to applause from a packed hearing room where executive branch staff had gathered to receive their marching orders.

Mohlenkamp joked that he had hoped the news would be greeted by “the wave.”

The state general fund budget approved by the 2011 Legislature set spending at $6.2 billion over two years. To build a new budget, state agencies will add caseload growth, federal mandates and inflation. The Legislature will adjust the governor’s proposed budget and vote on it in 2013.

Gov. Brian Sandoval’s announcement this week that he will support extending over $620 million in taxes passed in 2009 and scheduled to expire next year, combined with the beginnings of economic recovery, make it possible for officials to contemplate a cut-free budget.

The governor “knew how difficult the last couple of sessions have been,” Heidi Gansert, Sandoval’s chief of staff, said. “He understands the depth and breadth of the cuts to state spending.”

While improvements in the economy have been reflected in rising tax revenue, more Nevadans have also turned to the state for social services. Also, the state is dealing with new federal health care mandates.

But Gansert said Sandoval won’t support additional taxes.

“Those are not the options,” she said. “The governor has said we will grow our way out of this recession, and we will. It will take more time.”

The state budget will also be built restoring state employee pay, including eliminating monthly furloughs and adding back merit and longevity pay. Those cuts have equaled about 6 percent of state employees’ pay, including pension cuts.

“The governor is cognizant of sacrifices made by state employees over the last several years,” Gansert said. There are 25,000 state workers, including the university and college system.

Vishnu Subramaniam, chief of staff of the state employee union, said it’s unrealistic to promise that without supporting additional taxes.

“I think he’s painting an optimistic picture for employees now, but if we don’t have additional revenue, I don’t think those proposals are very realistic,” Subramaniam said.

The Legislature has direct control over state employee pay and benefits, and those workers, who do not have collective bargaining contracts, have shouldered a large share of state budget cuts, amounting to about $500 million over the past two years.

“I think we’ve probably ground on state employees as much as we reasonably can through this budget crisis,” said Sen. Ben Kieckhefer, R-Reno, a former state worker whose district includes Carson City. “If we can restore some of the cuts made to state employees over the past four years, then we should.”

Gansert said a final recommendation about state employee pay and furloughs will be made by Sandoval after December, when the final budget projections for the next two years are made.