Gov. Jim Gibbons Wednesday announced an agreement with a bipartisan panel of legislative leaders on additional spending cuts to balance Nevada’s biennial budget for fiscal 2007-2009.

The Republican governor and the lawmakers said they have agreed to adjust spending by about $349 million by delaying capital improvement projects, spending from several reserve funds, and changing several spending programs. These reductions avoid any cuts to the operating budgets of any state agency and result in no layoffs for state employees.

The Department of Budget and Planning predicts that general fund revenue for the current biennium will be about $6.2 billion, or 8.7% lower than the projections in the adopted budget.

The housing crunch has hit Nevada hard and it has affected the general fund. Gibbons had already announced $565 million in spending cuts in December, but since then the administration says the situation has worsened.

All told, general fund revenue is expected to be about $595 million less than budgeted for the biennium, with additional social services caseloads, an unexpected state obligation for K-12 education, and several other components adding about $319 million to the deficit, leading to a total shortfall of about $914 million.

“These reductions highlight the need for a panel I’m creating to review the operations of state government in an effort to eliminate waste, streamline operations, and generate change in how the state does business,” Gibbons said in a statement Wednesday. “I’m hopeful to get this panel up and running within 20 days so it can begin a solutions-based look at how the state spends taxpayer dollars.”

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