Nevada controller balks at pay cuts for state employees

CARSON CITY -- A high-ranking Nevada official on Thursday said she doesn't want to impose pay cuts demanded by Republican Gov. Brian Sandoval on her office in part because low-ranking workers "may end up needing public assistance."

Controller Kim Wallin, a Democrat, said Sandoval's proposal to cut state worker pay 5 percent would also drive out workers close to retirement, causing a "brain drain" that could increase accounting errors and hurt the state's bond rating.

Wallin made the remarks during a budget presentation to the Senate Finance Committee.

"Some of my staff at the very low end may end up needing public assistance so I don't see where we are saving any money," Wallin said.

She said at least five employees in her office already earn less than $30,000 annually.

Wallin also said 28 percent of workers are nearing retirement and might leave early, resulting in more auditing errors and jeopardizing the state's bond rating, driving up the cost of debt service.

"Those within five years of retirement may decide it is not worth it anymore," Wallin said. "Not only will we have a financial impact if employees choose to leave, but we will have a brain drain as well."

Sandoval included the pay cut in his proposed general fund budget for 2011-13, a document in which he suggests spending can be limited to about $5.8 billion, a decrease of about 6.4 percent from the previous two years.

State workers are already forced to take one unpaid furlough day each month, which reduces their take-home pay 4.6 percent but doesn't change their retirement benefits.

Sandoval's proposal would save more money because it would make employees work more for less pay and the reduced salaries would mean a lower employer contribution for retirement benefits.

Wallin, like Sandoval and the four other constitutional officers, voluntarily returns 4.6 percent of her pay to show solidarity with the workers.

But unlike the other officers, Wallin declined to return a 6 percent pay increase that kicked in Jan. 1 that raised her annual salary to about $102,000.

Since she didn't receive 2 percent and 4 percent raises in 2007 and 2008, as state employees did, she said the Jan. 1 raise minus the 4.6 percent return for furloughs puts her in step with the employees' raises and givebacks.

If the 5 percent cut is indeed imposed by Sandoval, Wallin said she would apply it to herself as well.

"I think it is important that as government officials that we are in solidarity with whatever the employees have," she said.

The controller is responsible for managing financial transactions within state government and processes about $1.14 billion every day through four divisions: debt collection, operations, financial reporting and information technology.

The office has 45 employees, with 42 in Carson City and three in Las Vegas.

Sandoval's proposed budget for the controller's office would allow about $9 million in spending in 2011-13, an increase of about $500,000 from the previous two years, Wallin said.

But Wallin said the increase will be eaten up by increased costs and doesn't include the 5 percent pay cuts.

Wallin also said Sandoval's budget calls for cutting the position responsible for overseeing spending of federal money from the American Recovery and Reinvestment Act, which will amount to about $400 million through 2014.

Senate Majority leader Steven Horsford, D-Las Vegas, seemed supportive of Wallin's position.

"The last thing we need to do is make a mistake in the closeout process and end up out of compliance on those funds," he said during the meeting. "This is an issue we definitely have to address somehow."

Horsford and the Democratic majority in the Legislature will need to sign off on Sandoval's budget before it can become law.

Sandoval spokeswoman Mary-Sarah Kinner said the governor sticks by his proposed 5 percent pay cut for state workers, but added he wouldn't discourage legislators from making cuts elsewhere to increase Wallin's budget as long as they stay under his spending limit.

After the meeting Wallin, first elected in 2006 and re-elected in 2010, said she was speaking out on behalf of herself and other department heads who are facing similar employee morale problems due to the proposed pay cuts.

"I'm a constitutional officer and I can speak out against the governor," Wallin said. "The agencies can't."

Contact reporter Benjamin Spillman at bspillman@ reviewjournal.com or 702-477-3861.