Governor Sandoval and legislators announce budget deal.

CARSON CITY, Nev. (AP) - Faced with rising costs, Gov. Brian Sandoval is backing off his promise to undo pay cuts imposed on state employees last year.

Gerald Gardner, his chief of staff, says the governor has issued orders to agency heads to continue the reductions in the proposed 2014-15 budget.

Gardner says that Sandoval hasn't given up on efforts to undo the work furloughs, pay cuts, and suspension of merit and longevity pay imposed on state workers.

But he says the governor doesn't know if he'll get the money to do so as rising costs are more than eating up revenue gains amid a weak economic recovery.

State employees complain the cuts amount to a tax increase on them so that businesses don't have to pay more taxes.

Copyright 2013 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.