Sisolak: Furloughs, pay freezes on tap to shore up COVID-related budget gap

CARSON CITY, Nev. — Gov. Steve Sisolak announced Thursday that state workers will all suffer a one-day-a-month furlough beginning in July to help cover the projected $1.3 billion budget shortfall expected to hit the state in fiscal 2021.

Sisolak said that number includes nearly $900 million loss to the General Fund plus the amount the state must, by law, make up to the school districts.

That amount is nearly a third of the projected $4.5 billion in General Fund appropriations budgeted for that year.

In addition, he said he is proposing a freeze on merit pay increases for the year beginning July 1.

But he said state worker health insurance and retirement benefits will not be reduced, and that he and his staff have reduced the number of state worker layoffs from 450 to less than 50.

“It is with a heavy heart I must propose these actions,” he said in a video address Thursday morning. “I know for many state employees, layoffs, furloughs and budget cuts are all too familiar and create tremendous hurdles in the work of serving our state.”

He said preserving existing workers' jobs also requires that hundreds of vacant positions will remain vacant through FY 2021.

He said protecting existing jobs is critical because, “you are the ones that provide critical services to Nevadans.”

To help mitigate the impact, he said he will continue working with Nevada's congressional delegation to advocate for financial relief from the federal government so states can preserve vital services and protect their economies.

“As Nevadans and with your hard work and partnership, we will reinvent, reinvest and reenergize our state for future success,” his letter to workers concluded.

On Tuesday, Sisolak issued a press release saying the shortfall for this fiscal year, which ends June 30, is expected to hit $812 million, including the projected $265 million shortfall in the account that funds K-12 education.

That funding is guaranteed to school districts by state statute no matter what happens.

Sisolak and the legislative Interim Finance Committee has already swept the $401 million that was in the Rainy Day Fund, called for $67 million in end of year agency reductions and $49 million to eliminate one-time appropriations that have not yet been spent.

The committee will meet Friday, June 12, to discuss the revenue shortfalls and take up Sisolak's proposed budget cuts.