School Crisis In Nevada; Governor Seeks To Cancel Collective Bargaining With Schools Because The State Is Broke

Nevada has an $881 million budget deficit and drastic cuts are on the horizon for education. Governor Gibbons is investigating options of canceling collective bargaining agreements with school districts. Unfortunately that maneuver is likely illegal.

State revenue shortfall $881 million

It's official. The state government revenue shortfall that legislators and the governor must eliminate through spending cuts later this month is $881 million.

State Budget Director Andrew Clinger said today that the shortfall has been formally calculated at $881.4 million, which would necessitate a 20.2 percent cut in state spending between March and June 30, 2011.

Legislators so far have not said where they want to reduce spending. They are scheduled to meet with Gibbons' staff later today, when they will be given the governor's proposed list of cuts.

So far, Gibbons has announced publicly he will support no more than a 6 percent cut in state employee salaries, a 10 percent reduction in public education spending, and layoffs of 300 state employees. He also wants to temporarily suspend collective bargaining rights for school employees and to close the Nevada State Prison in Carson City.

Gibbons aims for 10 percent in school cuts

Gov. Jim Gibbons said Tuesday he hopes to cut state appropriations to public schools by 10 percent as he seeks to reduce state spending by $900 million between March and June 30, 2011.

Anticipating the need to roll back the salaries of teachers and other K-12 school employees in the face of declining revenues, he has ordered his lawyers to determine whether he can temporarily suspend by executive order the collective bargaining agreements with unions that bind school districts to pay specific salaries and benefits.

Lynn Warne, president of the Nevada State Education Association, said Gibbons cannot under state law suspend collective bargaining.

She noted that in the collective bargaining law (Nevada Revised Statute 288.150) local governments can suspend this right only "in situations of emergency, such as a riot, military action, natural disaster or civil disorder."

And collective bargaining can be suspended only for the duration of the emergency, according to the law.

"I suppose you can do almost anything in an emergency," said Tobias, a former professor at the Boyd School of Law in Las Vegas. "But labor law is mostly federal. He might be pre-empted by federal law."

A $900 million cut is the equivalent of 22 percent of the expected state tax revenue over the next 16 months.

Chancellor unveils drastic scenarios for cuts to higher education

Dan Klaich, Nevada?s higher education chancellor, told the system?s governing Board of Regents the state is facing the worst economic shortfall in anyone?s memory, nearly $1 billion. This will mean either massive cuts to every aspect of government, or woefully unpopular tax increases. Or both.

Klaich outlined three scenarios that would cut that much from the system:

1. Close Nevada State College and the College of Southern Nevada.

2. Close Great Basin College, Truckee Meadows Community College, Desert Research Institute, UNLV?s law and dental schools, and the system?s medical school.

3. Close the state college, Great Basin, Truckee Meadows, Western Nevada College, all athletics at the two universities and the agricultural experiment station at UNR.

Don?t like those options? Klaich laid out a few others.

The system could implement 20 percent salary cuts across the board.

It could lay off 1,290 faculty and staff.

It could implement tuition and fee hikes of 48 percent.

About That Pension ...

I wish governor Gibbons the best of luck in getting collective bargaining for public workers tossed in the ashcan where it belongs. Unfortunately, collective bargaining agreements seem to be covered by federal as opposed to state rules.

Union and pension problems are now simmering in every state. The lid is likely to blow off this collective top sometime soon.

Budget crises in nearly every state are the defining problem right now, yet none of the other bloggers are talking about it. I am swamped with material and struggling to keep up.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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