Deeper budget cuts likely

The state budget office has asked agencies to spell out what they would do to make cuts as deep as 10 percent as a worst-case scenario.

The memo from Director of Administration Andrew Clinger follows a similar request made two weeks ago asking for scenarios to make a 1.4 percent cut and a 3 percent reduction in General Fund spending.

This time, he said, he has asked for three additional scenarios:

6 percent, 8 percent and 10 percent and ordered those plans submitted to his office by the close of business Jan. 5.

Altogether, a 10 percent cut would require agencies to reduce their already tight budgets by a total of $436.5 million during the biennium.

The planned budget cuts would be implemented March 1, with only four months left of the fiscal year. Even so, 10 percent would cost the university system

$16.7 million this year, Health and Human Services $29.7 million and public schools $40 million.

In fiscal 2011, a 10 percent General Fund cut would cost the university system $50.1 million, Health and Human Services $102.4 million and public schools $126.7 million.

Clinger said hopefully cuts those deep aren't necessary, but the latest statistics from his office show revenue collections $67 million behind budgeted amounts after just the first three months of this fiscal year.

"We've been looking at this since the close of (the legislative) session," he said. "Given our experience over the last two years and going through this, we don't want to do the budget cut of the month."

"I'm looking for three different scenarios because what you do at a 10 percent cut might be much different than what you do at 6 percent," he said. "They could be completely different plans."

He said he is trying to plan ahead so the state is ready to act when the Economic Forum, an independent panel whose projections under state law must be used to set the state budget, issues new revenue projections.

"We can't sit back and wait until the number comes out in January. We want to be prepared when that number comes out, whatever it is, to move quickly."

At a news conference last week, Gov. Gibbons said all options for reducing the budget were on the table, including possible layoffs, extended furloughs and shortened workweeks.

The latest budget cut plans come as the governor considers whether a special legislative session is needed to deal with the state's fiscal problems.

Nevada, heavily dependent on gambling and sales taxes, has been hard hit by the recession as gamblers and tourists keep a tighter grip on discretionary spending. Nevada's unemployment rate of 13 percent is second-highest in the nation.

Some lawmakers have said plans for a special session are premature, and questioned whether spending reductions could best be made by the administration and through an interim legislative process.

If a special session is called, Gibbons would set the lawmakers' agenda.

• With wire service reports.