The time for protests, political agitation and predictions of social doom is long gone.
State workers got the tax increases they wanted — the tax increases that largely preserved their jobs and salaries at the expense of private-sector positions — and as expected, the Nevada economy still isn’t strong enough to support all the spending lawmakers passed this summer.
Through the first quarter of the state’s two-year, $6.9 billion operations budget, revenues were $67 million short. When the second quarter ends next Thursday, the shortfall will easily eclipse nine figures.
Barring a special session, the Legislature will not meet again until February 2011. So the cuts are coming, in the form of layoffs, salary reductions, additional furloughs or some combination of the three.
Gov. Jim Gibbons met behind closed doors with lawmakers of both major parties Monday to discuss how to balance the budget. Gov. Gibbons prefers salary cuts to layoffs, given that Nevada has borrowed $264 million from the federal government to meet rising demand for unemployment benefits. Each 1 percent reduction in state worker salaries would save taxpayers $33 million over the biennium.
State Sen. Bob Coffin, D-Las Vegas, urged Gov. Gibbons to tap a $160 million line of credit to make ends meet. Gov. Gibbons, thankfully, has ruled out the constitutionally questionable idea of going into debt to pay for operating expenses.
It would be helpful if state workers came forward with suggestions — beyond more tax increases or intransigence. Would a majority of them rather deal with a pay cut of 6 or 7 percent, and retain their medical and retirement benefits, or would they rather see a few thousand of their colleagues let go, causing further damage to a weak economy?
The governor’s Monday meeting with lawmakers was, by all accounts, productive and pleasant, and free of the partisan nastiness that has characterized Carson City for the past three years. They know they have tough decisions to make — the kinds of calls thousands of taxpayers have made in the wake of job losses, benefit reductions and reduced income.