Gibbons asks state agencies to prepare for cuts up to 10 percent

CARSON CITY – Concerned the state economy is getting even worse, Gov. Jim Gibbons announced today that he wants state agency directors to prepare lists showing how they would reduce their spending by as much as 10 percent beginning in March.

Just two weeks ago, Gibbons requested every state agency head develop two lists, one showing how they would reducuce spending by 1.4 percent, the other by 3 percent. Now he wants lists showing how they would make 6 percent, 8 percent and 10 percent cuts and prepare to implement at least some of them in March.

“We may decide some agencies don’t need or cannot make various level adjustments and others can make those or even greater reductions,” Gibbons said. “It is critically important that the state of Nevada live within its means.”

Some of the spending proposals under review by Gibbons would require legislative approval and to call the Legislature into a special session before March.

A 6 percent spending reduction, if implemented in March, would reduce state government expenditures by $261 million between then and the end of the two-year budget period on June 30, 2011. An 8 percent spending reduction would be $350 million and a 10 percent reduction, $436 million.

He wants state agencies to report back by Jan. 5 on how they would make these reductions and the Economic Forum to make a new forecast of tax revenue by Jan. 19.

Then, the governor said, he will decide if he needs to call the Legislature into session.

Gibbons added he does not want Nevada to become another California — where expenditures are more than $20 billion more than available revenue.

He said state government must reduce spending and not raise taxes since that would be a burden on businesses owners and force more layoffs.

The governor said the reductions will affect Nevada’s ability to provide services.

“The choice may get down to whether we can afford to keep the wait time in DMV lines 30 minutes,” Gibbons said. “It might have to be 90 minutes or an hour.”

A state budget office report, released by Gibbons, shows the shortfall in tax revenue for the July through September period was not $50 million as estimated last week, but $67 million.

Every source of state taxes, except real estate taxes, has declined from the same period in 2008, according to the budget report. Real estate taxes were up just 0.2 percent from a year ago after plunging dramatically during the two previous years.

Gibbons also will send an e-mail message to every state employee today requesting their ideas on how to reduce spending.

Among other things, he is asking if employees would be willing to go to a four-day work week, or whether they’d favor a pay decrease or more furloughs.

Any idea submitted by employees will be considered, Gibbons said.

“People down in the trenches make day-to-day decisions,” Gibbons said. “They know where savings can be accomplished.”


Contact Review-Journal Capital Bureau reporter Ed Vogel at or 775-687-3901.