Sandoval pitches stopgap plan

Republican gubernatorial candidate Brian Sandoval says Nevada should cut state worker and teacher pay by 4 percent, reduce public employee benefits and divert money for class-size reduction back to the state's general fund.

Those and other proposed cuts could save $542 million and were part of Sandoval's plan to solve Nevada's short-term budget problems.

Sandoval says the plan could be implemented in a special session of the Legislature and resolve a budget deficit that could be anywhere from $200 million to $500 million.

Critiques from the right and the left identified cuts Sandoval overlooked and questioned whether the plan would do more harm than good for the state's economy. Sandoval says he expected some debate and that his goal was to instigate a conversation about how Nevada's state government can keep revenue and expenses in balance.

"The goal is to solve the short-term deficit problem," said Sandoval, who is leading incumbent Gov. Jim Gibbons in Republican primary polls. "I wanted to prepare a plan that doesn't raise taxes, doesn't cause mass layoffs and doesn't rely on deficit spending."

A spokesman for Gibbons' campaign did not respond to an e-mail seeking comment.

Mike Trask, a spokesman for Democratic gubernatorial candidate Rory Reid, said Sandoval's cuts show a vision comparable to that of the unpopular Gibbons.

"Maybe the governor left his office door open last night because it seems like one of his opponents came and stole all his budget ideas right off his desk," Trask said.

The first of six proposals in the Sandoval plan is a pay cut for state workers he says would save $212 million.

State workers, excluding teachers, already take one furlough day per month, which reduces their earnings 4.6 percent.

Sandoval says without reducing funding for teacher salaries, the state would need to cut other workers' pay as much as 12 percent to generate the same savings.

Ruben Murillo, president of the Clark County Education Association, says teacher pay cuts could cause other problems.

"If you start having teachers take cuts in salary ... they are going to go somewhere else to teach," Murillo said.

Sandoval also proposed cuts to the Public Employee Benefits Program that he says could save $110 million.

To achieve the savings, Sandoval proposed reducing the employer contribution from 95 percent to 75 percent and eliminating insurance subsidies for retirees who are eligible for other insurance programs such as Medicare.

A third proposal, also estimated to offer $110 million in savings, calls on the state to temporarily divert money used to reduce class sizes in Clark County to the state's general fund.

Under Sandoval's plan the school district could replace the funds with money from its $1.1 billion capital fund. That would require changes to state law, according to the plan.

Several smaller savings could be achieved by avoiding the use of a $160 million line of credit that, once tapped, could cost the state $30 million in debt payments; privatizing services such as the motor pool and prison medical services, and other reductions and consolidations.

Geoff Lawrence, of the conservative think tank Nevada Policy Research Institute, said Sandoval's plan is a decent start but overlooks other potential cuts the group had suggested, such as deregulation of regulated industries.

Launce Rake of the Progressive Leadership Alliance of Nevada said Sandoval's proposals may harm the state's chance of economic recovery by targeting education and social services. "Further cuts to those services will scare away investment and put us even deeper in the hole," Rake said.

Even if Sandoval's proposals were adopted and worked, they would solve only a short-term problem. In 2011, the state is expected to be facing a gap of more than $2 billion between projected expenses and revenue over two years. Also, hundreds of millions of dollars in taxes will sunset, there won't be money coming in from the American Recovery and Reinvestment Act, the so-called stimulus law, and other one-time revenue sources will be unavailable.

Jeremy Aguero of the research firm Applied Analysis, which analyzed data for Sandoval, says the plan focuses more on the short term. "All you are doing is building a bridge to get you to the point where you have more time to fix a much larger problem," Aguero said.