Nevada Legislature cuts $756M in spending amid revenue shortfalls and furloughs
March 26, 2025 | 2025 Legislature NV, Nevada
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Nevada's Assembly Committee on Ways and Means has approved significant budget adjustments to address a projected revenue shortfall, impacting various state programs and employee compensation. During the meeting on March 25, 2025, lawmakers implemented multiple strategies to manage the financial challenges, including salary reductions and program cuts.
The approved measures include a 5% salary reduction for state employees, a freeze on merit pay, and the suspension of longevity pay. Additionally, employees will take 48 hours of furlough leave, resulting in an effective salary reduction of approximately 4.8%. Despite these cuts, the legislature ensured that employees would not lose retirement service credits during their furlough days.
Significant reductions were made across various sectors, with K-12 education support facing a $100 million cut and the Nevada System of Higher Education seeing a reduction of $141.7 million, which will be partially offset by a registration fee surcharge. The Nevada State Prison also underwent a closure, saving $16.1 million.
To further alleviate the budget strain, the legislature approved a 5.3% increase in employee contributions to the Public Employees' Retirement System (PERS), resulting in $211.6 million in savings. Additionally, a care management program for the aged, blind, and disabled through Medicaid is expected to save $15.8 million.
Capital improvement programs have been significantly scaled back, with only $53.2 million approved for the 2011-2013 biennium, a stark contrast to the $811 million approved prior to the Great Recession. The committee also noted the conclusion of enhanced Federal Medical Assistance Percentage (FMAP) rates for Medicaid, which will require an additional $143 million in general fund appropriations over the biennium.
Overall, the legislature has enacted a total of $756.1 million in reductions to navigate the financial landscape, reflecting a proactive approach to managing the state's budget amidst ongoing economic challenges. As these measures take effect, the implications for state services and employee morale will be closely monitored in the coming months.
The approved measures include a 5% salary reduction for state employees, a freeze on merit pay, and the suspension of longevity pay. Additionally, employees will take 48 hours of furlough leave, resulting in an effective salary reduction of approximately 4.8%. Despite these cuts, the legislature ensured that employees would not lose retirement service credits during their furlough days.
Significant reductions were made across various sectors, with K-12 education support facing a $100 million cut and the Nevada System of Higher Education seeing a reduction of $141.7 million, which will be partially offset by a registration fee surcharge. The Nevada State Prison also underwent a closure, saving $16.1 million.
To further alleviate the budget strain, the legislature approved a 5.3% increase in employee contributions to the Public Employees' Retirement System (PERS), resulting in $211.6 million in savings. Additionally, a care management program for the aged, blind, and disabled through Medicaid is expected to save $15.8 million.
Capital improvement programs have been significantly scaled back, with only $53.2 million approved for the 2011-2013 biennium, a stark contrast to the $811 million approved prior to the Great Recession. The committee also noted the conclusion of enhanced Federal Medical Assistance Percentage (FMAP) rates for Medicaid, which will require an additional $143 million in general fund appropriations over the biennium.
Overall, the legislature has enacted a total of $756.1 million in reductions to navigate the financial landscape, reflecting a proactive approach to managing the state's budget amidst ongoing economic challenges. As these measures take effect, the implications for state services and employee morale will be closely monitored in the coming months.
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