CARSON CITY (AP) " Public employee and educator unions are reacting angrily to reports that Nevada Gov. Jim Gibbons will propose 6 percent pay cuts for state workers, schoolteachers and university employees.
Gibbons spokesman Dan Burns declined Friday to confirm the percentage, saying state law prevents him from doing so until the governor reveals his proposed 2009-11 budget next Thursday, when he delivers his State of the State speech. But he said a pay cut is the better of two bad options.
"If you have a workforce but you don't have enough money to make payroll, you're not left with enough options and neither one of them is good," Burns said. "One is you can reduce the workforce, which means laying people off, or you can reduce the salaries."
"It's not the function of government to put people out of work, either by laying them off or by raising taxes on businesses and creating more layoffs," he added.
Dennis Mallory, chief of staff of the American Federation of State, County and Municipal Employees Local 4041, representing about 5,000 state workers, said a 6 percent salary cut would amount to a tax increase on the workers.
Mallory said the Republican governor has said repeatedly a tax increase is unfair during an economic downturn "but he is taking income from the bottom line of state employees, which in effect would be a tax increase on them."
Lynn Warne, head of the Nevada State Education Association which represents teachers, called the pay cut suggestion irresponsible, adding that it shows "a lack of leadership to seek to balance the budget on the backs of teachers and state employees."
John Jasonek, executive director of the Clark County Education Association, which represents the majority of teachers in the state's largest school district, termed the proposal "despicable." He said he'd like to see Gibbons step down and be replaced by someone who would "truly lead."
Assembly Speaker Barbara Buckley, D-Las Vegas, said cutting salaries " a step that could save about $430 million over the next two fiscal years " "is extremely bad for our state and our schools."
"It doesn't make sense," Buckley added. "I think we can come up with a better solution."
Buckley said a Las Vegas Chamber of Commerce study has shown that state employee salaries are right at the national average and no state has fewer public employees on a per capita basis than Nevada.
The budget Gibbons is expected to send to state lawmakers next week will be more than $2 billion below the estimated $8.1 billion needed to maintain current government services. His budget drafters have asked some agencies for "what-if" plans for cuts that could exceed the 34 percent they've already considered.
The state Economic Forum has projected the state's revenues for the coming two fiscal years at about $5.8 billion. That's the figure Gibbons must use for his budget unless he recommends some additional revenue sources.
State Budget Director Andrew Clinger has said $8.1 billion is what the state needs in revenue to cover the cost of maintaining services at current levels while accounting for inflation, population growth and other factors that drive up government spending.
Without a rapid, dramatic economic turnaround in Nevada, tax increases are the most obvious source of new funds for the state. While Gibbons has said he would veto plans for higher taxes, he could face a veto override from the Democratic-controlled Legislature.