Sisolak plans furloughs, freezes and few layoffs to patch budget hole

CARSON CITY – Gov. Steve Sisolak’s preliminary proposal to trim spending in the state fiscal year that starts July 1 will include one furlough day per month for 18,000 employees and a freeze on merit raises and filling job vacancies, but only 50 layoffs of active employees.

The governor unveiled the plan to state workers Thursday morning in a streamed video announcement and in a subsequent public statement.

“The economic crisis caused by the COVID-19 pandemic has forced us to take a different direction with our state budget in response to our changed economic reality,” the governor said in his four-minute remarks to workers. “I know for many state employees, layoffs, furloughs, and budget cuts are all too familiar and create tremendous hurdles in the work of serving our state.”

Sisolak said he would continue to work with Nevada’s congressional delegation “to advocate for financial relief from federal government to help make up the difference in our state budgets that fund vital services that help states and cities come out of this crisis stronger and more resilient.”

The governor did not list a figure on potential cost saving from the furloughs. But a reduction of 12 days worked over the course of one year equals a 4.6 percent cut in annual pay.

Based on the average state employee wage of $57,000, that means an average pay cut of a little more than $2,600 per worker, or roughly $47 million for the entire state workforce.

The governor said staff had worked to reduce the anticipated layoffs from 450 to 50.

Retirement and other employee benefits are not affected by the furloughs, the governor said.

The union representing state employees issued a statement Thursday afternoon saying workers had put “our health at risk” by continuing to work through the pandemic and “demand a say before any decisions about our work and lives are made.”

“Public service workers are essential to strengthening our economy and helping all Nevadans get back to normalcy. We can do neither if we are laid off or asked to take furloughs,’ said Harry Schiffman, President of AFSCME Local 4041. State workers, he said, “cannot suffer another round of devastating cuts to public services like we did just 10 years ago.”

The state is looking to trim as much as $812 million from the current budget in response to unprecedented revenue declines from sales, gaming and other taxes resulting from the economic contraction caused by the COVID-19 pandemic. As of Thursday morning, Nevada had logged 10,399 cases of the illness since March 4, and 458 deaths.

The current year cuts include a $265 million reduction in spending for K-12 education and 4 percent spending cuts for most state agencies. The governor earlier asked state agencies to look at cuts of 6 to 14 percent for the 2020-21 fiscal year, starting July 1.

Preliminary estimates indicate an approximate $1.3 billion budget shortfall in 2021, $900 million in the state general fund and the rest in K-12 schools funding.

Contact Capital Bureau Chief Colton Lochhead at clochhead@reviewjournal.com. Follow @ColtonLochhead on Twitter.

Contact Capital Bureau reporter Bill Dentzer at bdentzer@reviewjournal.com. Follow @DentzerNews on Twitter.