State may be forced to cut spending

CARSON CITY -- State government spending, reduced by $805 million during a special session in February, might be cut by another $130 million because the U.S. Senate didn't approve a bill extending employment benefits, officials said Friday.

Legislators and Gov. Jim Gibbons had counted on that money -- which was included in the bill rejected Thursday -- for Nevada's Medicaid program when they approved a new budget during the special session.

It wasn't clear whether the shortfall would bring about state employee layoffs or reductions in health care benefits, or both.

Medicaid is the federal-state program that provides free health care for the poor, disabled and elderly not eligible for other programs.

"I am not sure what we are going to do," said Mike Willden, director of the Department of Health and Human Services. "We don't have any reserves."

Gibbons was not available for comment Friday, but earlier this month, he said he would have to cut the state budget if Congress did not appropriate the Medicaid funds.

At the time, he said he did not plan on calling the Legislature into another special session to deal with the problem. The Legislature meets in its next regular session in February.

Because the bill stalled, Willden expects about 4,000 Nevadans a week over the next few months won't receive federally-paid unemployment benefits, and many of them might look to his agency for help.

Health and Human Services administers the Food Stamps, Temporary Assistance for Needy Families, Medicaid and other social welfare programs.

"We are going to see more applications for public assistance," said Willden. "I don't know what else they can do. It's a huge problem."

Willden said $88.6 million of the rejected Medicaid funds were built into his department's budget. He also counted on $11 million in Temporary Assistance for Needy Families funds.

Generally people who receive unemployment are not eligible for welfare assistance, but without any income they could qualify, he said. Single people, except the disabled, are not eligible for welfare.

Daniel Burns, Gibbons' spokesman, said the state cannot force the Senate to change its votes, but if it doesn't the state's economic problems only will increase.

"The state has no power to do anything," he added.

Contact Capital Bureau Chief Ed Vogel at or 775-687-3901.