Cathleen Allison/Nevada Appeal Gov. Jim Gibbons and Director of Administration Andrew Clinger talk Friday about state budget cuts. The governor announced that cuts would be extended to public education, but would be reduced across the board from 8 percent to 4.5 percent.
Gov. Jim Gibbons said Friday public schools will have to share the pain of state budget cuts.
But he said taking K-12, public safety and the Department of Corrections off the list of those excluded from reductions will mean significantly smaller cuts for every other state agency - just 4.5 percent instead of 8 percent.
To accomplish that, school districts will have to cut a total of $96.2 million from the more than $2 billion in state funds they are budgeted to receive.
Carson City School Superintendent Mary Pierczynski said she would reserve most of her comments until after superintendents meet with Gibbons and his staff on Thursday but that, "We weren't expecting this so obviously we're very concerned."
She said she was pleased salaries and raises still are protected.
Gibbons also relented in his earlier refusal to consider part of the Rainy Day Fund to cover the revenue shortfall, saying he won't dip into it until fiscal year 2009, but may cover up to $200 million in shortfalls at that time if necessary.
He and Department of Administration Director Andrew Clinger said they expect to have to cut as much as $440 million from the budget. That includes the $285 million in programs outlined Nov. 7, up to $30 million in one-shot projects, at least $10 million from the capital improvement program and the remainder - about $130 million - from the Rainy Day Fund.
They haven't yet finished the revenue projections showing how they arrived at that total.
The only expenditures still protected from reductions, Gibbons said, are the Clark and Washoe counties' child welfare and juvenile justice programs, state worker, teacher and judicial raises and the Public Employee Retirement System funding.
The change means that, instead of more than 40 percent of the general fund budget being protected from cuts, less than 8 percent is protected.
Gibbons said the change is more fair because it spreads the cuts, so that a few agencies don't have to bear the entire burden. Also, he said, "it removes the real pressure for layoffs."
He said there will be no layoffs under this plan.
"The more we start exempting individual agencies, the greater the burden on those who've got to make the cuts," he said.
The final straw, he said, came "when we started looking at how deep the cuts would be in Health and Human Services."
Clinger said HHS was looking at up to $187 million in general fund cuts, which also would cost the state another $100 million in federal matching funds, a total of nearly $300 million.
Now HHS is looking at $78 million in reductions, which will probably cost another $50 million in federal funding - a much smaller hit.
Mike Torvinen, administrative services officer at HHS, said 8 percent was going to impact people in nursing homes, the enrollment in the children's health insurance program and the biggest HHS program of all, health care services through Medicaid.
"We figured a very significant impact in health care dollars throughout the state, enough to have potential impact on the economy," he said. "Going back 4.5 percent will get to the point where it's going to be significant, but we're not looking at the devastation that would have come with an 8 percent cut."
As to how the cuts will be made, Gibbons said he intends to rely on the agencies, school districts and regents to make most of the detailed decisions.
Pierczynski said that's good for the districts because each of them is different and the individual superintendents and boards know best how to handle their cuts.
In Carson City, she said, "We want to keep our programs and staff."
She said the goal is to maintain adequate yearly progress under the federal No Child Left Behind Act.
"Last year, nine of our 10 schools made it so we're anxious to keep those programs going. That means teachers working with students."
Senate Majority Leader Bill Raggio, R-Reno, said the new plan is "a more responsible approach."
He said programs such as all-day kindergarten and empowerment can be deferred to make the cuts but that, "you'll hear a lot of groans" from lawmakers.
Assemblywoman Bonnie Parnell, D-Carson City, a former teacher, said it will be difficult for schools to cut budgets in the middle of a school year. She expressed concern that full-day kindergarten and empowerment programs may now be endangered.
Regent Ron Knecht, whose district includes Carson City, said Gibbons is "going in the right direction by spreading this across the entire budget and not concentrated on just a few sectors." He said 4.5 percent is much more reasonable goal than 8 percent.
The new plan reduces the hit to the university's funding from $102 million to $57.6 million.
"We can handle this," he said. He, too, said the regents and the different campuses are the best place to make the final decisions.
Director of Corrections Howard Skolnik, whose budget will have to lose $24.2 million, said he can manage that reduction.
"We've got a lot of expansion coming and our numbers (of inmates) have been down some, so I think we can delay some of that construction."
Skolnik said corrections has already cut $3 to $4 million, anticipating this.
"We'll figure out how to do this with the least impact to staff and operations," he said.
Gibbons said he expects agencies to begin making their cuts immediately and not wait until January. Clinger said many have already implemented savings plans, holding positions vacant and not starting new programs.
Gibbons pointed out that, if the economy rebounds as many economists are now saying it may, the cuts can be lifted in certain areas and the money released.
• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.
Changes in budget cut amounts
Department revised plan original plan
Department of Corrections $24.2 million $0 (exempted)
Health and Human Services $78 million $187 million
K-12 education statewide $96.2 million $0 (exempted)
University system $57.6 million $102 million
What's next?
Gov. Jim Gibbons pointed out that, if the economy rebounds as many economists are now saying it may, the cuts can be lifted in certain areas and the money released.