Gov. Steve Sisolak’s office is asking state agency leaders to propose another round of budget cuts on top of previous cuts they were asked to draft earlier in the year as the state braces for a major drop in tax revenue.
In a memo sent Thursday evening and first reported by the Las Vegas Review-Journal, Chief of Staff Michelle White asked agencies to propose cuts of 5 percent for the upcoming fiscal year starting in July on top of additional budget cuts submitted earlier. The proposals are due by Monday, June 1.
“Due to the projected decline in State General Fund Revenues, agencies are asked to prepare additional reductions, in part to reduce the number of potential layoffs,” White wrote in the email.
The state has already emptied its $400 million Rainy Day reserve fund to help alleviate the shortfall that is expected to be $741 million to $911 million for the fiscal year that runs through June. That’s about a fifth of the state’s budget.
At least $160 million of the shortfall is linked to the total shutdown of gaming for a 10-week period in an effort to curb the spread of coronavirus.
Sisolak previously asked state agencies to prepare for up to $687 million in budget cuts over the current and upcoming fiscal years, or about 4 percent of the current fiscal year budget and at the high end of a 6 to 14 percent range of the 2021 fiscal year budget. The governor declared the state to be in a “fiscal emergency” earlier this month.
White said in her email to agency heads that budget cuts for the fiscal year ending in June have already been finalized.
Sisolak spokeswoman Meghin Delaney said in an email that the governor would continue to work with legislative leadership “on these very difficult decisions that impact state agencies and the Nevadans they serve.”
If positions are proposed to be eliminated, agencies must consider vacant positions. Sisolak previously said he did not want “an arbitrary across-the-board cut.”
“As the Governor said in his letter requesting potential reductions, budget decisions will be made with an eye toward prioritizing state resources to protect the health and safety of our citizens and put Nevada on a path to recovery,” Delaney said.
Sisolak’s office has so far declined to release the proposals agencies have submitted on where they think they could cut. It is also weighing how federal CARES Act funding might blunt the pain.
At a recent meeting with lawmakers, Sisolak’s budget director Susan Brown said the decisions on what to cut was still ongoing, and legislative fiscal analyst Russell Guindon did not release further information about how other tax revenue sources were doing, aside from the gaming tax.