State agencies told to prepare for more cuts

State agencies have been told to prepare for additional budget cuts this year of up to 11 percent.

Director of Administration Andrew Clinger advised all executive branch agencies to spell out what cuts they would make for 4 percent, 7 percent and 11 percent " which would take their spending down 25 percent below the budget originally approved by the Nevada Legislature for this fiscal year.

Clinger announced last week that falling tax revenues " particularly from gaming " had created an additional $300 million shortfall this year. Under an 11 percent scenario, that number is now $358.3 million.

The memo issued Wednesday orders agency heads to submit their proposed cuts to the budget office by next Wednesday.

The memo also requests information regarding potential layoffs from the agencies.

According to backup materials sent to the agencies, the Department of Health and Human Services, K-12 education and the university system would be hardest hit by additional reductions. To meet the 11 percent target, Health and Human Services would have to reduce spending by another $100.2 million, schools by $99.4 million and the university system by $71.5 million. In the case of Health and Human Services, that would also result in the loss of nearly that much more federal money as well.

The Department of Corrections would take a $30.9 million additional hit if those additional cuts are ordered.

But Clinger's memo makes it clear these cuts aren't being ordered yet and that part of the reason for asking them is to determine the impact they would have.

"At this time, no decision has been made as to whether these budget reserve recommendations swill be implemented," the memo states. "However, this information will be considered in the decision making process for closing the current deficit."

Legislative leadership is planning to meet with the governor next week to take another look at the situation and possible solutions. And while Gov. Jim Gibbons says he is still opposed to tax increases, he has conceded that "everything is on the table" including ways to increase revenues.

- Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.