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Sandoval: Nevada faces catastrophe if government shutdown persists

Sandoval Budget Battle

Anjeanette Damon / Las Vegas Sun

Gov. Brian Sandoval is briefed Tuesday, Oct. 8, 2013, by cabinet members on the impact of the government shutdown on Nevada.

Updated Tuesday, Oct. 8, 2013 | 10:08 a.m.

CARSON CITY — Gov. Brian Sandoval said today Nevada is in danger of “catastrophic” consequences if the federal government shutdown persists until the end of the month.

Most state agencies are able to continue federal programs until the end of the month, Sandoval was told in a mini-cabinet meeting today. But the cash-strapped state is already beginning to rack up a significant bill keeping essential programs running without the guarantee of the federal government reimbursing the costs.

“Particularly at the end of the month, I think that’s really when we are going to start to see … some catastrophic issues going on for the state,” Sandoval said.

“Time is short. We have hundreds of thousands of Nevadans facing real consequences. The first of the month is right around the corner.”

Most immediately, 362,000 food stamp recipients will see their benefits halt on Nov. 1 and the 500 state employees who administer that program will face potential furloughs if the shutdown is not resolved. About 74,000 women, infants and children would also stop seeing food benefits.

To continue both programs without federal money would cost the state $50 million a month.

“We don’t have it,” Sandoval said, of the state’s $6.1 billion biennial budget. “We can’t afford it.”

Nevada has also run out of federal money used to pay employees to process unemployment claims. Emergency funds are being tapped to keep the program going until the end of the month.

By the end of November, despite the fact money will be available to pay unemployment claims, the jobless will stop seeing their benefits, state officials said.

“At the end of November we will not be paying state or federal unemployment insurance at that point because nobody will be around to hit the button,” said Dennis Perea, deputy director of the Department of Employment, Training and Rehabilitation. “We basically won’t have any staff in the office to administrate that program. We wouldn’t have staff to answer the phones and conduct business.”

Smaller programs also are taking a hit. If the shutdown doesn’t lift by Nov. 1, rape crisis call centers in Nevada will see their funding stop.

“People who would call in ‘I’ve been raped, I need counseling, I need services,’ there would not be a resource for people to call and get help,” said Mike Willden, director of the department of Health and Human Services.

Some assistance programs will not be affected unless the shutdown lasts until the end of the year. Willden said Temporary Aid to Needy Families, Medicaid and energy assistance programs have four months of funding left.

Nevada’s Adjutant General William Burks said the National Guard remains ready to respond to an emergency. But it has had to postpone drills and has no money for operations and maintenance.

“Where we stand right now, if our trucks run out of gas, we can’t put gas in them,” Burks said. “If our airplanes don’t have gas in the tanks, they just sit there. To the point of even if our copiers run out of copy paper, we can’t use our government purchase card to buy new paper. It’s pretty dire.”

Sandoval’s budget director Jeff Mohlenkamp said the state is using some emergency funds to help programs limp along and the bills are racking up.

“Some of these programs are digging a hole that I don’t have a way out of,” Mohlenkamp said.

Sandoval said he took the unusual step of opening his cabinet meeting to the press so that decision-makers in Congress will see the “real consequences” of the shutdown.

“There are people that are at risk now and will be at more risk as this wears on,” Sandoval said.

“They are all important,” Sandoval said of the programs that could be shuttered. “At no point do I want to be in a position where I have to pick between women, infants and children and those on unemployment benefits and those employed by the guard. For every person, all these things are extremely important.”

Sandoval said he and his staff are briefing legislative leaders. If the state needs to dip into its Rainy Day fund, it would have to call a special session to do so.

“Hopefully it wouldn’t come to that,” he said.

Sandoval, a Republican, said he refuses to “point any fingers” in Washington, saying he’s not “going to weigh into the politics of Washington.”

“It’s toward the Congress, all of them, as well as the president, there are starting to be some real consequences here in my state,” Sandoval said.

State Senate Minority Leader Michael Roberson, R-Henderson, said in a tweet Tuesday evening that politicians in Washington need to listen to Sandoval.

“Time to shutdown the shutdown,” Roberson tweeted.

Like Sandoval, Roberson did not cast blame on who’s responsible or who needs to act to reopen the government.

Other state legislators, however, were not as hesitant to point fingers.

"What is at the heart of the matter is that even Gov. Sandoval agrees and recognizes that the Republican shutdown could have catastrophic consequences for Nevada,” said Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, in an emailed statement from her legislative caucus director, Brendan Summers. “There is a lot at stake, and this isn’t time for political posturing."

Sen. Dean Heller, R-Nev., also took a moment Tuesday evening to praise Sandoval for clearly stating his concerns.

Heller called on Democrats and Republicans in Congress “to sit down, communicate, and come up with a solution” in the same way Nevada’s governor “sits down and talks with legislative leaders.”

But in a twist of irony, Sandoval sat down with Democrats in the Legislature only long enough to tell them that he would flatly reject both a payroll tax proposal from Senate Democrats and a sweeping change to the state’s live entertainment tax.

Although Democrats said they talked often with the governor, Sandoval largely got the Legislature to pass the budget he proposed earlier this year.

Sen. Harry Reid, D-Nev., also praised the governor, saying his briefing illustrates “how devastating a Republican shutdown is for Nevada.”

“We both agree that this Republican shutdown needs to end,” Reid said in a press release. “And the piecemeal approache preferred by Republicans would not fix the problems that Gov. Sandoval outlined.”

He called on Republicans to pass the Senate’s legislation that fully funds the federal government, saying that only then would negotiations about spending levels and priorities happen.

As a practical matter, though, Nevada’s savings account is pretty much empty already.

How much money is in the Rainy Day fund?

“There’s none,” said Sen. Debbie Smith, D-Reno, chairwoman of the Senate Finance Committee.

The governor and Legislature used the state’s Rainy Day fund this year to balance the budget.

So reopening the budget via a legislative special session would likely mean the state would have to cut services or find new ways to raise money to pay for things the federal government cannot.

“We really have a very dangerous situation brewing here, and we have people who are going to be suffering or are already suffering,” Smith said. “Here we are just starting to climb out of this recession, and we’re on the verge of, as the governor said today, a catastrophe.”

This story has been edited to correct the number of Nevadans receiving WIC benefits.

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