Nevada lawmakers approve $116 million in budget cuts, with a few choice words for Sisolak

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A crowd of up to 200 people gather on April 18 to protest Gov. Steve Sisolak’s stay-at-home order. Drivers honk in support of reopening businesses. Reno Gazette Journal

Lawmakers say Sisolak could do a better job explaining plans to fix COVID-caused budget crisis

Nevada legislators on Friday approved $116 million in new spending cuts meant to help fill a $812 million state budget hole caused by the coronavirus.

Members of the Legislature’s Interim Finance Committee OK’d the reductions proposed by Gov. Steve Sisolak along strict party lines, with all seven Republicans opposing the measure. Each of the panel’s 15 Democrats supported the plan.

The move slashes a combined $67 million from spending on higher education, health services and public safety. It will also cancel $49 million in expected tech upgrades, vehicle purchases and other one-shot expenditures first OK’d by lawmakers in 2019. 

More: Sisolak debuts plan to plug $812 million coronavirus-caused hole in Nevada’s budget

More: Sisolak proposes furloughs, salary freeze for Nevada workers

Those cutbacks, coupled with a $401 million withdrawal from Nevada’s rainy day fund, shore up nearly two-thirds of the state’s projected $812 million fiscal year budget shortfall. Officials will look to make up the remaining balance mostly via federal coronavirus stimulus payments and transfers from other reserve funds, such as the state’s Disaster Relief Account. 

Republican members of the state budget panel raised concerns about how continued draws on financial reserves might affect Nevada’s credit rating, suggesting officials could delay additional construction projects and sell off equipment to help replenish emergency funds. 

The state typically sets aside reserves equal to 5 percent of its budget as a cushion against unanticipated expenditures — a practice that helps improve the state’s bond rating. As of Friday, the state projected a roughly 4 percent ending fund balance, or enough to cover about two weeks worth of expenses.

Democrats, for their part, preferred to soften future budget blows through smarter use of congressional coronavirus stimulus funds. Susan Brown, Sisolak’s budget director, said she anticipated additional federal funds would arrive to help remedy Nevada’s budget woes later this summer. 

Lawmakers on both sides of the aisle seemed to agree Sisolak’s office could have done a better job communicating his proposed budget fixes to the Legislature and the public.

State Sen. Ben Kieckhefer, R-Reno, raised the loudest objections over what he characterized as a “piecemeal approach that’s being spoon-fed to us” by the governor’s office. 

“This process has been very one-directional and not very collaborative at all,” Kieckhefer added. “I understand we’re in a time crunch, but I think a more collaborative approach could’ve yielded a different, if not better, result.”

Assemblywoman Teresa Benitez-Thompson, D-Reno, said she too would “encourage a greater flow of information” about budget cut proposals.

Committee Chair Maggie Carlton, a Democrat from Las Vegas, defended Sisolak’s proposals as a necessary initial step toward fixing a fiscal emergency.

“You don’t put money in your savings account if you can’t feed your kids,” Carlton told her colleagues. “This is the executive (branch) proposing their first steps, knowing full well other things will have to be done.”

Virus-related travel and social distancing restrictions decimated the Silver State’s tourism-driven economy in recent weeks, sending unemployment soaring to a nation-topping 28.2 percent and opening up a massive budget gap that includes $265 million in once-planned K-12 education spending.

Tourists have started trickling back to Las Vegas and Reno, though officials still anticipate ending the fiscal year with 14 percent less sales tax revenue and a 20 percent decline in crucial gaming tax income. 

Sisolak responded with furloughs and a statewide salary freeze. In a letter to state employees, he said those efforts would help limit the number of state worker layoffs to less than 50. He has not proposed changes to employee health insurance or retirement benefits.

State lawmakers on Friday heard more than 45 minutes of public comment opposing the governor’s suggested budget cuts, including criticism from labor leaders who said aloud what many in the capital have long whispered:

“We would suggest budget cuts alone aren’t going to solve the problems we have without new revenue,” Clark County Education Association President John Vellardita told state lawmakers. “We would say this is a moment in time for a conversation to be had about building a new kind of economy in this state, so we’re not dependent on two industries and two revenue streams.”

Tax increases are expected to be on the table during an as-yet-unscheduled special legislative session intended to address the economic fallout from COVID. Sisolak has indicated he will announce a timeline for the session before July 1.

James DeHaven is the politics reporter for the Reno Gazette Journal. He covers campaigns, the Nevada Legislature and everything in between. Support his work by subscribing to RGJ.com right here

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