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Sisolak talks shortfall with state employees

Gov. Steve Sisolak on Thursday notified state employees of proposed plans to address the projected Fiscal Year 2021 budget shortfall.

Preliminary estimates indicate approximately a $900 million General Fund shortfall; when combined with the Distributive School Account, the revenue shortfall increases up to $1.3 billion in Fiscal Year 2021. The estimated revenue shortfall represents a significant percentage of the state’s overall $4.5 billion operating appropriations for the fiscal year.

“Prior to the pandemic, the state was focusing on plans to implement a child, family and community-centered Nevada government,” Sisolak said. “And while our budget looks a lot different now than it did then, I still maintain hope that we can use this opportunity to reinvent our state under that vision and fix the historic and systemic problems that served as obstacles to real progress in the past.

“The projected shortfall may shift as we continue to receive and analyze new economic data, but I have the responsibility for developing the proposals to address the Fiscal Year 2021 shortfall based on what we know today.”

“For state employees, I’ve asked my team and state agencies to build the proposals with the goal of limiting the number of possible layoffs in the state to the maximum extent possible,” Sisolak said. “You, our state employees, are what make this state run day in and day out. You are the ones that provide critical services to Nevadans. State agencies will be keeping hundreds of positions vacant in Fiscal Year 2021 to preserve existing positions and employees.”

In preparing plans to address the shortfall, state officials have worked to reduce the number of anticipated layoffs from more than 450 to fewer than 50 expected at this time. The proposed plans include one furlough day each month for all state employees beginning in July and a freeze on merit salary increases for Fiscal Year 2021.

No additional changes to health insurance or retirement benefits for state employees are proposed at this time for Fiscal Year 2021 beyond those approved by the Public Employees’ Benefits Board earlier.

Based on the preliminary estimates for the FY 2021 shortfall, without significant federal funding, Nevada will not be able to avoid severe reductions in support for agencies and services that represent the majority of General Fund expenditures, including health and human services, education and public safety.

In addition to working with Nevada’s congressional delegation to advocate for federal funding for state and local governments, the governor and the governor’s finance office continue to work closely with legislative leadership and staff to review and finalize budgetary proposals to address the shortfall and coordinate timing for an upcoming special session to finalize the proposals before July 1.

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