Facing an economic pounding from the popping of the state’s housing bubble, Nevada Gov. Jim Gibbons announced broad-based 4.5% reductions to the current-year budgets of most state agencies. The cuts are to include the corrections department, the public safety department, and K-12 education. The cuts exclude child welfare and juvenile justice programs, and scheduled salary increases for teachers and state employees. Gibbons also plans to eliminate or defer some budgeted capital improvement projects, and cut between $100 million and $200 million that had been scheduled to go into the state’s rainy-day fund. Sales tax revenues have been coming in below budget projections in the wake of the housing crunch. Nevada doesn’t have an income tax.

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