Las Vegas Sun

July 6, 2022

Currently: 102° — Complete forecast

political memo:

State worker layoffs minimal amid recession, but for how long?

Gov. Jim Gibbons

Gov. Jim Gibbons

Sun Coverage

MGM Mirage has laid off 9,000 employees during the past 18 months.

General Motors has cut 13,000 hourly workers during the past year.

Nevada government, in contrast, has laid off just 60 employees over the past 18 months.

The state government workforce has been largely immune from pink slips since the recession began in 2007, despite Nevada having one of the largest budget shortfalls in the country.

Gov. Jim Gibbons is a conservative Republican whose mantra is that the state has a spending problem and not a revenue problem, so his failure to trim the workforce seems striking at first blush.

But it also speaks about a truth about Nevada’s bureaucracy: “Layoffs in government are not easy,” said Robin Reedy, Gibbons’ chief of staff.

Robin Reedy

Robin Reedy

The reasons state workers have been protected are varied.

Numerous studies have noted that Nevada, per capita, has among the fewest government workers of any state. And, although surveys have found that local government employees are well compensated compared to their colleagues in other states and equivalent positions in the private sector, state salaries have lagged, largely because state workers don’t have the collective bargaining rights their local counterparts do.

Also, state government is required by law to pay into many workers’ retirement systems if they’re laid off, increasing the short-term costs of layoffs. Senior workers can bump workers with less seniority, meaning managers can’t decide who gets to stay and who doesn’t. Because the senior (i.e. higher paid) workers could choose to stay while the less expensive junior workers leave, less taxpayer savings than envisioned could result.

Still, measures that have worked to reduce spending in previous rounds of budget cuts, as well as tax hikes approved during the 2009 legislative session, might no longer be enough.

Gibbons last week said layoffs might be included in the next round of budget cuts to deal with tax revenue coming in $53 million below projections since July. He has asked department heads to come up with cuts of 1.4 percent and 3 percent, due to him by Tuesday. The administration would look at those recommendations before making decisions.

Reedy also said Friday that the administration will ask departments to outline additional scenarios over the next couple of weeks with higher percentage budget cuts. She declined to say how high they would go.

Gibbons has long said he doesn’t want to add to the state’s unemployment numbers, when the percentage of Nevadans without work is consistently among the highest in the nation. Instead, in January he recommended 6 percent pay cuts for state workers. The Legislature instituted one-day-a-month furloughs instead, cutting state worker pay by 4.6 percent.

Reedy said that if further cuts are necessary, “State employees should have the expectation that the governor will do everything in his power to reduce spending as much as possible before layoffs occur.”

But that does not include tapping a $160 million line of credit to deal with the shortfall. Though legislators from both sides of the aisle have said that money can be shifted from the next fiscal year to the current one, Reedy dismissed the idea as poor financial planning.

Bill Raggio

Bill Raggio

“To do that in the short term to avoid layoffs doesn’t make financial sense,” she said.

Still, the Gibbons administration acknowledges that some needs have to be met. Lynn Hettrick, the governor’s deputy chief of staff and former Assembly Republican leader, pointed to the Corrections Department and Department of Motor Vehicles as two areas that are operating on minimal staff.

“Those are tough ones to do layoffs on, though nothing is off the table,” Hettrick said.

Reedy said Senate Minority Leader Bill Raggio, R-Reno, had a valid point when he said that “the difference between us and the private industry is they’re not mandated by state and federal laws to provide services.”

If there are layoffs, the administration just might test the limits of what it has to provide.

Join the Discussion:

Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.

Full comments policy