Cathleen Allison/Nevada AppealGov. Jim Gibbons signs four bills into law Tuesday afternoon. The measures came out of Monday's special legislative session to address the $340 million-plus revenue shortfall.
Gov. Jim Gibbons said Tuesday that, in addition to no cost of living raises, state workers will not be receiving step increases in the coming budget cycle.
Gibbons has said several times over the past few months there would be no cost of living raises for state workers in his proposed budget. Asked Tuesday if that included step increases, he said, "Yes. An increase is an increase."
Chief of Staff Josh Hicks said, "we don't anticipate any pay raises being possible." But he said those workers who reach their next anniversary date before the end of this fiscal year will get the step increase if they qualify otherwise.
"We have gotten to the point where we are no longer able to improve the salaries of people at this point," Gibbons said after the Board of Examiners meeting Tuesday.
He said no raise is better than layoffs, which he is trying to avoid.
According to Director of Administration Andrew Clinger, eliminating step increases for the next two years would save the state about $80 million a year. But that includes all positions. It would save the General Fund about half that " $40 million for the year or $80 million for the biennium.
Each step for classified workers averages about 4.5 percent more pay. There are 10 steps for workers in the classified system.
Clinger said the state can make the adjustment for its employees in the payroll system. He said the more difficult proposition is making that adjustment in the public school budgets since the state turns the more than $1 billion a year over to the districts, which decide how to spend it.
Hicks said eliminating the step increases for the next budget cycle there will involve meetings with school officials.
Gibbons said one of the key elements of the plan adopted in Monday's special session is off the table for the 2009-2011 biennium: "No more loans."
"The state does not need to dig itself in a deeper hole," he said. "We need to pay off this obligation," referring to the $160 million line of credit approved Monday and signed into law Tuesday.
Asked about long-term changes to state government, he said: "The government we see today is not going to be the government we see tomorrow. It will be smaller. It will be more effective, more efficient."
As for the Republican Assembly caucus's opposition to the "line of credit" and several other parts of the $340 million budget package approved by the special session, he said he doesn't agree they amount to tax increases because "there's no increase to the consumer."
"I looked at all those bills and I and many of the members of the Legislature believe they are not tax increases," he said.
Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.