Gov. Brian Sandoval’s staff confirmed Monday he will use money freed up by lower employee benefit premiums to eliminate state worker furloughs next year.
Those unpaid furlough days are among the cuts state workers have long decried as unfair.
Sandoval earlier Monday announced he was adding $25 million to the K-12 schools’ budgets, money freed up by health premium reductions in K-12 and Medicaid caseload reductions.
But the same reductions to the Public Employee Benefits Program generated for K-12 also generated savings in the cost of benefits for regular state workers and university employees.
Sandoval’s administration sent out a letter Monday to all state workers announcing they, too, would benefit from the benefits program savings.
The letter told employees the new PEBP savings in general fund budgets will be used to make furloughs disappear in fiscal 2015.
Director of Administration Jeff Mohlenkamp confirmed the decision Monday, saying it will cost an estimated $12 million.
Sandoval said as he was building the proposed budget for the next two years, he wanted to do whatever possible to eliminate the cuts state workers have suffered over the past several years.
His original budget cut the number of furlough days from six to three, at a cost of $22 million.
He also reinstated step increases and merit pay for state and university system workers taken during the current biennium — such as the furlough elimination effective in the second year of the biennium.
The infusion of $25 million into K-12 education will be used to further expand all-day kindergarten and English-language learner funding for the coming two years, bringing the total added to those two programs to almost $60 million.
Some $10 million will be added to the all-day kindergarten funding, expanding the program to an additional 32 schools across the state.
The additional $15 million added to ELL funding, Sandoval said, effectively doubles the current budget for that program.
Mohlenkamp said benefits savings money was already within the Distributive School Account. It, like the cash to pay benefits costs for state workers, was freed up when the Public Employee Benefits Program actually lowered premium rates last week.
For education, the rest of the funding, he said, came when new estimates lowered the projected Medicaid caseload over this coming biennium at the same time the federal match percentage increased. Medicaid was originally projected to hit a total caseload of 490,000 by the end of the 2014-15 budget cycle. The new estimate is about 12,000 lower. In addition, Mohlenkamp said the percentage of Medicaid the federal government covers will increase two-thirds of a percent in fiscal 2015 to 64.19 percent.
Between the two, he said that frees up a substantial amount of money.
“We’ll submit budget amendments later this week to effect these changes,” he said.