CARSON CITY, Nev. (AP) — Nevada stands to lose $40 million in federal dollars if automatic budget cuts set to kick in at midnight Friday extend through September, with most of the hit being taken by education, public safety and some health and human services programs, Gov. Brian Sandoval said Thursday.
“We think the significance has been a concern for all Nevadans,” Sandoval told reporters in a late afternoon briefing.
The first-term Republican said he’s still hopeful for a resolution in Congress to avoid the $85 billion in broad-based federal spending reductions known as the sequester.
But Sandoval said his administration has been preparing for months for the real possibility that Republicans and Democrats may not strike a deal to avoid the steps laid out in 2011 as a way to force lawmakers to come to an agreement over spending and taxes. A bipartisan supercommittee failed to reach an accord, and the automatic cuts are now imminent, though they will be gradual.
Some programs, such as Medicaid, food stamps, highways and some veteran services, are exempt, and Sandoval said any education cuts likely wouldn’t be felt until the start of the next school year.
In his own budget proposal, Sandoval included $15 million in a rainy day fund that he said will be used as a stop gap should the federal spending cuts linger.
“We have planned for this,” the governor said. “We have reserves.”
Sandoval said he plans to brief leaders in the Nevada Legislature early Friday, though he adds states themselves lack many details on what to expect.
Another unknown is how federal employee furloughs may affect Nevada’s economy. Nevada is home to three military bases and also has a large Bureau of Land Management presence.
Federal agencies must give workers a month’s notice before imposing furloughs, which will likely force many to take one day a week of unpaid leave indefinitely. So the pay and spending power of government workers and many contractors won’t be affected until April at the earliest.
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