CARSON CITY – Legislators on money committees today approved on a party-line vote a 4.8 percent salary cut to state and higher education employees.
The proposal would include a 2.3 percent cut through furloughs – about six days per year – and a 2.5 percent salary reduction.
Gov. Brian Sandoval had proposed in his budget a 5 percent salary cut to state and higher education workers.
Speaker John Oceguera, D-Las Vegas, advanced the 4.8 percent “compromise” cut. Legislative staff said it would create a shortfall between $7.5 and $10 million in the governor’s budget.
The vote passed with all Democrats voting for the idea and all Republicans voting against it. In an earlier vote, Republicans voted to follow the governor’s recommendation while Democrats voted against it.
Republicans characterized the salary reductions and cuts to benefits as similar to reductions in the private sector.
“What we are seeing here is a continuation of that downsizing,” said Assemblyman Pat Hickey, R-Reno.
Democrats contended that government does not operate like private businesses; rather than seeing less business during a recession, more people depend on state services in a recession.
“If we are going to apply true business principles to government, we should be hiring right now … our demand is way up,” said Assemblyman Marcus Conklin, D-Las Vegas.
Union representatives and higher education faculty testified against the cuts, saying that they much preferred furloughs to salary cuts.
Danny Thompson of the AFL-CIO also said that reductions in the governor’s budget have provoked a grassroots movement that could punish Republicans during next year’s elections.
“I would caution you that if you don’t solve this problem, that organic uprising that has already happened is going to spread and the people are going to solve this problem,” Thompson said.
Legislators also voted to continue suspending merit and longevity pay as well as eliminating holiday premium pay for higher education and state workers. Legislative staff said that these decisions should save the state $71.5 million.
Yesterday, legislators voted to curtail health care benefits for public sector employees.
Public sector employee union representatives said they have already endured these reductions in pay and benefits for several years as Nevada has struggled through the recession.
“It is so totally unfair what we are doing to our state government,” said Jan Gilbert of the Progressive Leadership Alliance of Nevada.
The governor has earlier argued that furlough days resulted in less productivity from employees, causing longer lines at places such as the DMV.
None of the votes are binding, and the Legislature may decide to alter the proposals as they finalize the budget.
Legislative committees last week voted not to reduce pay for school district employees nor did they choose to suspend merit pay for school district employees.
Those decisions could cost the state $402 million during the next two years.
Democrats last week proposed a revenue package totaling about $1.2 billion comprising a continuation of taxes approved by the 2009 Legislature and scheduled to end this year as well as a tax on businesses’ gross revenue and a sales tax on some services.
If passed, these tax increases could pay for that $402 million cost.
Senate Majority Leader Steven Horsford, D-Las Vegas, also noted a potential budget consequence in cutting salaries. He said that the sustained compensation cuts could lead some state workers to favor retirement over working for less.
Dana Bilyeu of the Public Employees’ Retirement System estimated that 2,000 current state employees are eligible to collect full retirement benefits.
Should they choose to retire, the state would have an unfunded obligation to cash out those retiring employees for accrued sick leave, she said.
Bilyeu and others in the committee room could not estimate a cost, but she said about 1,000 more teachers than usual retired due to changes in benefits following the 2007 legislative session, causing the state to lose millions of dollars.