Gov. Brian Sandoval said Nevada could see at least $40 million in budget cuts from the federal government during the next seven months.
The federal "sequester" cuts begin Friday in what Sandoval described as a "gradual slowdown" of federal government.
"It's not like we're going to wake up tomorrow and the money won't be there," he said at a briefing to the press at the capitol.
He said his administration has prepared for the cuts beginning this past Fall, when Congress began to address the potential for mandatory federal budget cuts. Sandoval said the state has more than $15 million set aside to mitigate the budget cuts.
"The main takeaway is that we have been aware of this, we have planned for this, there will be consequences for this," Sandoval said.
Sandoval said there most likely will not be delays in payments to welfare families or the unemployed and that any reductions to state education programs won't happen until the next school year begins.
Although the budget cuts originate with Congress at the federal level, Nevada plans to get about $6 billion in federal dollars during the next two years.
Many other federal government agencies operate in Nevada and will be subject to budget cuts, which result from the failure of Congress and the White House to avert self-imposed cuts designed to be so draconian that the Republican Congress and Democratic White House would be forced to strike a budget deal.
Their failure now leaves state governors to manage the budget cuts in their respective states.
"Unlike elected officials in Washington, we must take swift action to mitigate the extensive consequences," Sandoval said in a statement. "My Administration started planning for sequestration last summer, knowing we may need a contingency plan should it go into effect. While we have worked to set money aside and have a plan to move forward, there are still some areas of the budget which will be affected."
Sandoval and legislative leaders are meeting Friday to discuss the exact impact on the state, said Assemblywoman Maggie Carlton, D-Las Vegas, chairwoman of Assembly Ways and Means committee.
She has received preliminary budget cut numbers from state agencies, and she said she wants to "compare numbers" with Sandoval's office, which has also computed the negative effects of the federal cut.
"We have planned for this but there are going to be detrimental impacts to the state," Sandoval said.
He is gathering information and will release the data later. Democrats have also said they are talking to Senate Majority Leader Harry Reid about the extent and impact of the cuts.
Sandoval has returned from a meeting of governors in Washington and a session with President Obama.
He did not know if this would force any layoffs of state workers who are paid through federal funds.
There may be a minimal impact for road building since those are in a trust fund.
He said Budget Director Jeff Mohlenkamp has been working with the various agencies to minimize the impacts.
"Some of the impacts won't be felt for months," he said.
But he said federal employees will be furloughed and that will affect the BLM, the FAA, the national parks, the civilian employees at the Fallon Naval Air Station, Nellis Air Force Base and Creech Air Force Base.
The defense budget for payroll at Nellis Air Force Base and Fallon Naval Air Base is being slashed by $12.1 million. Base operations for the Air Force are being slashed by about $2 million on top of that.
At the state level, Nevada is expected to lose $9.1 million in federal Title I funding, which represents a 5 percent reduction in funding, according to the U.S. Education Department.
Nevada also would lose about $3.8 million in federal funding for about 50 additional teachers and staff who work with special-needs children.
The reductions could change how the Legislature crafts the state's budget.
"When we hear the budgets and close them, depending on where we are with sequestration, we'll have to make those decisions," said Sen. Debbie Smith, D-Sparks. "We can't have blinders on."
Beyond straight budget reductions, many federal personnel could be furloughed. TSA screeners and thousands of airport employees could work fewer hours, driving up lines at airports.
That doesn't bode well for Nevada's tourism industry nor for the state's legislators who often fly between Reno and Las Vegas.
"Nevada has a large federal presence," Sandoval said. "So whether you are a rancher who relies on the BLM (Bureau of Land Management) for grazing permits or a traveler who relies on air traffic controllers, the potential impacts on our state's economy are great."
The full dollar impact, however, is difficult to calculate, Carlton said.
For instance, federal grants that could be cut renew on varying cycles. Some money could disappear in a months; other grants won't be up for renewal for many months.
Like many states, Nevada uses its state dollars to get matching grants at a one-to-one match or greater from the federal government, so it will take the state a few days to parse out the full effect of the grants that are disappearing, Carlton said.
In addition, some accounts have reserves, which the state could use to mitigate the cuts, she said.
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