Cathleen Allison/Nevada Appeal
For state workers at the low end of the classified system, the proposals in Gov. Jim Gibbons' budget would cut their take-home pay by up to 13 percent.
The proposed budget calls for a 6 percent across-the-board reduction in what state employees are paid. Chief of Staff Josh Hicks said that amounts to a roughly $3,000 a year reduction to the average classified worker, $4,000 for the average unclassified employee. The amount is highest for top paid workers and less for those lower on the totem pole.
But the second part of the plan is to shift more of the cost of employee benefit premiums to the employees. Instead of paying an average 90 percent of worker premiums, the state would only pay 75 percent. Using the Public Employee Benefits Program schedules for this plan year, that would increase the employee's monthly premium by about $110 a month no matter which of the benefit program plans they are in.
And that is a flat per-employee monthly cost that hits all employees equally, whether they are a first-year administrative aide making $24,888 or a cabinet-level director making $121,000 a year.
While only a small percentage for a director, for that administrative aide it's another 6.5 percent out of the paycheck. Add on the half-percent increase in the Public Employee Retirement Program premium employees must pay this coming year and the total pay cut for those workers comes to 13 percent.
Gibbons ordered the 6 percent pay cuts to save an estimated $435.3 million over the biennium.
According to Director of Administration Andrew Clinger said without making those cuts, it would have been necessary to lay off upward of 9,000 people to balance the budget.
The benefits program changes were recommended by his government efficiency study commission to bring state benefits more in line with federal and private benefit packages.
The SAGE Commission recommendations in the budget also include eliminating retiree subsidies and all subsidies for Medicare-eligible retirees for anyone who retires after July 1. The plan also cuts in half over the next two years the subsidies for those who have already retired.
Marty Bibb, representing the Retired Public Employees of Nevada, said those proposals would be devastating to retirees.
"There are going to be a lot of people potentially put at serious risk because of the SAGE Commission's proposals for cutting retiree subsidies."
He said many of those retirees would be left with no health insurance coverage since most of them don't qualify for Medicare.
Clinger said the proposed benefits changes will save the state an estimated $158.5 million during the biennium.
Those changes are in addition to plan changes and cost shifting approved a month ago to reduce the program's budget by $50.8 million during the biennium.
In addition, Gibbons has proposed suspending step increases for workers not at the top of their pay scale, saving another $206 million.
Dennis Mallory of the American Federation of State, County and Municipal Employees said he doesn't believe the Legislature will go along with cuts as draconian as that.
"I think they're going to look at this and say, this guy's lost his mind."
But Mallory said the attack on state workers isn't a surprise.
"It's really unfortunate it's gone this far," he said. "But they're not going to allow the governor to do this."
- Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.