State agency department directors huddled behind closed doors Tuesday afternoon looking for ways to cut another $400 million a year out of the state's budget.
Director of Administration Andrew Clinger told the nine department heads and university Executive Vice Chancellor Dan Klaich their starting point for the 2010 fiscal year's budget would have to be the latest projection for general fund revenues - $3.2 billion.
The budget instructions issued Feb. 27 told agencies to build their budgets based on the "legislatively approved" amounts for this fiscal year - just more than $3.6 billion - and increased by 3 percent for 2010 and another 3 percent more for 2011.
The difference is about $400 million. And Clinger told the directors Tuesday the 3 percent increase each year of the next budget cycle is gone as well.
Going into the meeting, several of the directors said they don't see a magic answer to the state's budget shortfall.
"I've been down this road three times," said Gaming Control Board Chairman Dennis Neilander. "I don't know of anything else to do."
Health and Human Services Director Mike Willden said a week ago the easy cuts have already been made.
"I don't have any more tricks," he said.
Willden said if the only available answer to the revenue shortfall is to cut, "our only alternative will be to get into ugly cuts."
Clinger told the group he is anticipating some revenue growth, but that the question is whether that will pay for caseload growth - particularly in human services areas where the workload tends to increase during tough economic times.
Clinger said earlier this month the flattening of prison population growth and growth in public school populations is giving the state some hope.
Director of Corrections Howard Skolnik said two weeks ago his inmate population has flattened out at just about 13,000. He said a check with Clark County's detention center shows its population down significantly as well, meaning the number of potential inmates headed for prison during the coming year is below what was expected this year.
In addition, Clark County School District is projecting a modest 1.7 percent growth in the number of students next year - the smallest level of growth since 1985.
Together, Clinger said, those factors should ease the pressure on the state.
Clinger doubted whether revenue growth will cover caseload growth.
While the meeting included directors Mike Fisher from Cultural Affairs, Allen Biaggi from Conservation and Natural Resources, Neilander, Todd Rich of personnel and Taxation's Dino Dicianno, cuts within their departments won't get the state much.
The vast majority of the state's general fund revenue is spent on K-12 education, higher education, public safety and human services. Taken together, those four areas consume 92 percent of the general fund.
In fact, the state only budgeted about $250 million general fund dollars a year for all other governmental functions. Several Democrats in the Nevada Legislature including Sheila Leslie, D-Reno, have said cutting education, public safety and human services isn't the answer. But as Clinger pointed out earlier, totally eliminating all other general fund governmental functions wouldn't save enough to make the $400 million in reductions.
