A Governor Proposes Furlough Days, Some Layoffs to Help Balance Budget

A man plays craps at the reopening of the Bellagio hotel and casino Thursday, June 4, 2020, in Las Vegas, after casinos in Nevada were allowed to reopen for the first time after temporary closures as a precaution against the coronavirus.

A man plays craps at the reopening of the Bellagio hotel and casino Thursday, June 4, 2020, in Las Vegas, after casinos in Nevada were allowed to reopen for the first time after temporary closures as a precaution against the coronavirus. AP Photo/John Locher

 

Connecting state and local government leaders

Nevada is looking for ways to bridge a massive revenue shortfall brought on by the coronavirus.

With Nevada facing a huge budget gap, Gov. Steve Sisolak revealed cost cutting plans on Thursday that would involve some layoffs, furloughing all state workers for one day a month and freezing merit salary increases for the upcoming fiscal year.

Sisolak said that state officials had “worked diligently” with agencies to avoid a more extreme scenario where more than 450 state workers could have lost their jobs. Instead, fewer than 50 are expected to be laid off at this time, he said.

As of last year, Nevada had the equivalent of about 30,700 full-time employees, according to the state’s most recent financial report. About 11,200 held education-related jobs and around 6,500 work in law, criminal justice, or public safety agencies.

It wasn’t immediately clear what departments the layoffs could affect. The governor also said that agencies would keep hundreds of positions vacant to preserve existing jobs. 

Nevada is one of many states now dealing with budget pressure brought on by the coronavirus outbreak, which has dragged the nation into a recession and eroded huge amounts of previously anticipated state and local government tax revenue.

The state currently expects a $1.3 billion shortfall heading into fiscal 2021, according to the governor’s office. That’s a sizable sum compared to annual operating appropriations of about $4.5 billion. The state budgets for two fiscal years at a time, with each ending June 30.

“We know this shortfall will mean deep budget cuts within agencies,” Sisolak, a Democrat, said in a video statement.

For the current 2020 fiscal year, the state’s general fund shortfall is estimated to be about $812 million, according to the governor’s finance office. The state already tapped about $401 million in “rainy day” funds to help bridge that gap. 

Sisolak’s administration has put forward a slate of other proposals for filling in the rest of the shortfall, and a legislative committee is scheduled to discuss the issue further on Friday.

Under the roughly $2 trillion coronavirus relief package Congress passed in March, the state of Nevada was allotted $836 million from a special fund meant to assist states and large localities.

Sisolak, a Democrat, said he’d continue to press the feds for more relief. But to what extent Congress will ride to the rescue with more state and local aid is an open question. Republicans who control the Senate are less enthusiastic than the Democratic House majority on this front.

The coronavirus downturn has dealt financial hits to states all across the U.S. But some of the industries that it has hurt the worst—like hotels, casinos and other tourism and hospitality business lines—are among those that Nevada’s economy and budget depend on the most 

Casinos in Las Vegas reopened last week after closures that spanned over two months.

Nevada is far from the only place where public workers are facing layoffs and furloughs since the onset of the virus outbreak.

Jobs reports for April and May showed losses for those two months together totaled over 1.5 million in the state and local government sector. While some of these job losses are expected to be temporary, others could become permanent as states adjust their budgets.

Many of these job losses so far have been tied to education, reflecting the widespread school closures enacted to help control the virus.

Bill Lucia is a senior reporter for Route Fifty and is based in Olympia, Washington.

NEXT STORY: Pandemic Aid: What Can We Learn From the 2009 Stimulus?

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