State won’t raid county, city coffers

CARSON CITY -- Gov. Jim Gibbons pledged Monday to local government officials not to tap into city and county coffers as he looks for ways to reduce spending to cover a $900 million state budget shortfall.

Instead, Gibbons said in an interview he is considering cutting the salaries of state employees by as much as 6 percent starting in July. Teachers, public school workers and university faculty would be included in the wage cuts, which Gibbons said would save the state $30 million for each percentage point reduction.

A tiered reduction plan that would take less from lower paid employees is being considered by the administration.

"We are looking at how much we can reduce (their pay) without them just walking away," said Gibbons, adding he believes 6 percent would be the limit. "There are no sacred cows when you have a (nearly) $1 billion shortfall."

He also said he has no choice but to lay off an undisclosed number of workers because salary cuts alone would not cover the shortfall. For every 20 employees laid off, he said the state saves $1 million.

Gibbons will give a televised State of the State address at 6 p.m. Monday. In it, he will outline where he will cut $900 million to make up the short-term deficit faced by the state.

He also will announce when he will call the Legislature into special session, which is expected to happen during the week of Feb. 22.

To the applause of about 30 local government officials, Gibbons also announced Monday that he has no plans to take any revenue from cities and counties. During the 2009 Legislature, cities and counties lost about $130 million to the state when Gibbons and legislators appropriated a $50 million indigent care accident fund used by hospitals and $79 million in property tax revenue from Clark and Washoe counties.

Clark County Manager Virginia Valentine expects Gibbons to keep his word.

The county faces a shortfall of $150 million to $200 million because tax revenues are dropping. If the state reduces funding as proposed, the county would lose $18 million for family services, $10 million to $20 million for social services and $5 million in Medicaid funding for University Medical Center, county officials said.

Gibbons also said he will not try to take a potential $4 billion capital improvement program that exists in Clark County for schools and local government building projects. "We do not intend to take any money from counties and cities," he said. "You have to look at the condition of cities and counties. They are starting to feel the pain."

But in response to questions from Valentine, Gibbons said the state would cut its Medicaid contribution to UMC if the federal government cuts Medicaid funding.

Las Vegas Mayor Oscar Goodman attended the Carson City meeting and said his message to Gibbons was "very simple: Leave us alone."

Jeff Fontaine, executive director of the Nevada Association of Counties, said the counties are pleased by the governor's pledge, but "there is still a concern" about the unintended consequences of the coming reductions.

If the state reduces social service spending, for instance, Fontaine said those people could end up going to the counties for help. Valentine concurred.

"If the state lowers the amount it pays for these programs, then it would fall on the counties to make it up," she said.

Gibbons said he was concerned that cities and counties would try to shift responsibility for licensing some mental health and child care facilities to the state.

The governor said state workers have submitted more than 2,000 suggestions on what to cut. Many want the state to shift to a four-day work week, which he said is under consideration.

Review-Journal writer Scott Wyland contributed to this report. Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.