Archive for June, 2010

Nevada Budget Director Says Congress Not Expected To Extend Medicaid Funding To States

By Sean Whaley | 4:00 pm June 30th, 2010

CARSON CITY – Nevada Budget Director Andrew Clinger said today he does not believe Congress will act to extend Medicaid funding that was counted on by lawmakers in February when they approved an $800 million plan to balance the state budget.

Even so, Clinger said it is “not yet time to panic” over the failure of Congress to approve a six-month extension of the temporary enhancement of the federal medical assistance percentage (FMAP), which provides funding for state Medicaid and other health programs. A number of states were counting on the extension from Jan. 1, 2011 through the end of the fiscal year June 30. The extension was expected to bring $88.5 million to Nevada.

Clinger said a number of factors need to be analyzed before deciding on what needs to be done about the loss of the anticipated federal funding.

One piece of good news is that state tax collections are up about $57 million over what was projected for this fiscal year, he said. If tax revenues continue to exceed estimates, it will help keep the state budget balanced, Clinger said.

Taxable sales reported earlier this week for April were up 2 percent, the first increase in Nevada in 20 months.

Clinger said the first step will be to revise tax revenue estimates for the remainder of this fiscal year and the 2011 fiscal year that begins Thursday. Clinger said he will also sit down with Mike Willden, director of the Department of Health and Human Services, to get new caseload estimates on Medicaid and other programs.

Another unresolved factor is $62 million taken from a Clark County water pipeline project as part of the plan approved by lawmakers in February to balance the budget. The diversion of funds is being challenged in court by the Clark County Clean Water Coalition.

There is also a concern about whether a new three-month tax amnesty program set to start Thursday will bring in the $10 million anticipated by lawmakers as part of the budget balancing plan, he said.

Clinger said earlier this month he believes that if a shortfall materializes in the current budget, any spending reductions can be presented to the Legislature’s Interim Finance Committee for approval rather that the full Legislature, an option that would require Gibbons to call lawmakers into a special session.

My Three Cents on Sharron Angle’s Face to Face Interview

By Elizabeth Crum | 3:54 pm June 30th, 2010

If you have not yet seen last night’s must-see Sharron Angle interview with Jon Ralston, here it is.

Although she has been widely criticized for running from the media since her nomination, Angle deserves credit for sitting down with the best, toughest political interviewer in the state.  Having been in the Face to Face hot seat before, she had to know Ralston would not go easy on her (he didn’t).  Angle’s willingness to stroll over those coals ought to dispel any notions that she is afraid to show up and engage.

And kudos to Face to Face for booking her when no one else could.  And for doing such a great job with all the before/after quotes and clips with which to confront and question her.

On the issues:

Social Security — There is no doubt that Angle has morphed her rhetoric on this one.  She’s moved from talk of elimination to reform and “personalization.”  And if she had a dollar for every time she’s talked about protecting the existing funds of our nation’s seniors in a “lock box” over the past few weeks, she could personally fund the entire program.  She is now saying she is for giving people a choice, Rand Paul style, between the existing entitlement plan and some privatized/personalized version.

But her position on this really doesn’t matter because as Ralston rightly pointed out, Social Security as a program is going to be fine until roughly 2037 which means it will be eleven months into 2036 before Congress admits there is a problem and does anything about it.

I do give Angle some credit, though, for working into her remarks what I think were some fairly effective comments about Harry Reid/D.C.’s idea of fixing things, which is to raise taxes, print more money or go deeper into debt.  That kind of talk appeals not only to conservatives but to independent voters of a certain kind.

Jobs and Unemployment Benefits – Angle did a very nice little dance step when asked about prior comments that it was not her (or any Senator’s) job to create jobs.  She did so by way of saying it is the role of a Senator to “create a climate conducive to creating jobs.”  Sounds like a line straight out of the Professional D.C. Campaign Consultant’s Playbook.

But she did not move as gracefully when challenged on past remarks about the extension of unemployment benefits and a “spoiled citizenry.”  Angle tried to say she wasn’t really talking about people themselves, but about a system that does not dole out money and manage incentives the way it should.  “What has happened is the system of entitlement has caused us to have a spoilage with our ability to go out and get a job,” she said.

It sounded pretty thin, but she had to try to mitigate because it’s just not a wise to call unemployed and hurting people “spoiled,” especially when their numbers represent roughly 14% of the people who could vote for you.

I think Angle’s insistence that the state ought to stop paying unemployment benefits because “there are jobs that do exist” will not be taken well by folks (and their friends and families) who fill out umpteen applications a week and show up at every Job Fair and still can’t find work.  Not sure why you’d keep insisting there are jobs out there when comparative to the population that is out of work, there really are not.

Incentives for Small Businesses — I’m guessing Angle did not really mean to praise a bill for which Harry Reid will get credit if passed, but that is just what she did when Ralston asked her if she supported the tax incentives for small business that are moving through the Senate this week.  And you can bet it’ll show up in a Team Reid ad.

“People are really looking to those second amendment remedies” – This is another past Angle-ism that is tricky to walk back, though she gave it a try by admitting the comment was “a little strong,” explaining that what she really meant is that people are “afraid of their government” and then whipping out that trusty old stand-by, the out-of-context defense.  I thought Ralston did a great job of confronting her with her statement and trying to get a straight answer as to whether she really thinks taking up arms against Washington D.C. is a viable option.

Perhaps Angle and certain other Tea Party candidates will one day figure out that dropping broad hints about storming the halls of Congress with sawed off shotguns is not the way to win hearts and minds.  Or general elections.

Separation of Church and State – The upshot, despite some analysis that sees her position on this as fairly radical, is that Angle holds the same position as most of the Christian Right as well as many non-Christians who are not hostile to some expressions of faith and religion in the public square and the schools.

Her contention is that while the U.S. Constitution says there shall be no establishment of state religion, it does not in fact include the words “separation of church and state” and that we, at times, go too far in trying to keep the two totally separate.  Especially when talking about the rights of parents to educate their children (at no additional cost) in religious rather than secular schools if they see fit to do so.

Abortion – Angle is a purist.  No abortions for any reason, including incest and rape.  It’s actually the most consistent pro-life position one can hold, but it raises the ire of many and does not appeal to most moderates of either party.  I think it’s a problem for her, electorally, but this is one issue on which she has apparently not adjusted her views.  (I found it interesting that Ralston asked her about capital punishment as a follow-up.  She made a distinction between protecting “innocent life” and the criminal, which one takes to mean she is ok with the death penalty in some cases.)

Overall, I thought she did fairly well, although she smiled, laughed and nodded agreeably a bit too much.  As candidates not accustomed to running for the U.S. Senate may tend to do when they are nervous and being grilled under a spotlight in front of the entire state.

Hopefully we’ll see another of these interviews soon, as well as a debate between her and Reid.

Questionable Billing, Attendance Problems Costing $2.3 Million Identified In Audits Of Nevada Mental Health Programs

By Sean Whaley | 2:15 pm June 30th, 2010

CARSON CITY – Audits of two state mental health programs reviewed today identified a number of serious findings, from physicians working only a few hours a day to questionable and potentially fraudulent bills for services to the mentally ill.

In one case, the Division of Mental Health and Developmental Services is investigating a provider who billed for services to a mentally ill client even though the individual was hospitalized at the time.

Harold Cook, administrator of the agency, said it appears as if there was a “deliberate attempt to deceive us.”

Cook acknowledged that other billings identified in the audit of the residential support programs, where services are provided to mentally ill clients, were “egregious” and “inappropriate.”

The review by the Division of Internal Audits identified numerous cases of questionable expenses, including paying supplemental rent to a client who had spent money on tattoos, $150 biofeedback sessions and $175 on Christmas cards.

The audits were reviewed by the Executive Branch Audit Committee, which includes Gov. Jim Gibbons, the other state constitutional officers and a representative of the public.

Gibbons said the audits show there are people trying to take advantage of the state, and called the findings troubling because they are evidence of a systemic problem.

“And it doesn’t speak well of the people who are submitting the billing or trying to take advantage of the state’s fiscal condition at this point in time,” he said. “The state of Nevada is not for sale. The state of Nevada should not be defrauded.”

In another case cited in the audit, a provider submitted reports that were identical from month to month except for the editing of dates. The same provider showed a charge for 2.5 hours to “meet a client at a restaurant and count change.”

Another provider billed for taking a client on eight-hour bike rides and massage.

Another involved $80 to $105 payments for music therapy with no supporting documentation.

One billing was for more than $1,000 a month on services identified only as, “in home discrete trial.”

Another was for $369 for action lessons with no evidence the service met a client’s needs.

Another case involved a billing from a provider for a client who was missing for over a week.

The claims were approved and paid by the agency with no evidence they were questioned, the audit found.

The audit said the agency could save at least $650,000 a year by clarifying policies for expenditures and improving monitoring. All 11 recommendations were accepted by the agency, although Cook noted in his response that the questionable spending amounts to less than one half of one percent of the $110 million budget for these services.

Cook said there are 5,000 providers, some of whom generate hundreds of bills each month that must be reviewed by staff.

“Sometimes we miss them,” he said.

The second audit reviewed the operations at the agency’s two psychiatric hospitals and 24 out-patient clinics, and found a number of physicians employed by the state were not working full days.

In one case, a doctor who worked at the Rawson-Neal Hospital in Las Vegas averaged two hours a day.

The audit found that on average, none of the doctors, who earn as much as $170,000 a year, worked full days.

“We were able to identify one day in the four months when one of these doctors worked a full day,” the audit said. “We estimate the division lost up to $1.7 million from doctors’ attendance problems at the Rawson-Neal Hospital in fiscal year 2009.”

Cook said the doctor who only worked two hours a day is no longer with the agency. Three other doctors with attendance problems are also gone, he said.

Cook said the expectation is that all state employees will put in an eight-hour day.

The agency is looking at privatizing the medical services as a way to address the issue going forward, he said.

All 11 audit recommendations were accepted by the agency.

Gibbons said the audits help pinpoint problems so fixes can be made going forward. The audit of the agencies is critical to ensuring the state meets its fiduciary obligation to taxpayers.

“We need to know where our weaknesses are, we need to know where the state can do better,” he said.


Audio clips:

Gibbons on audit findings:

063010Gibbons1 :18 not be defrauded.”

Gibbons on need for audits:

063010Gibbons2 :12 solving those probelms.”

Cook on potential fraud:

063010Cook1 :30 to deceive us.”

Cook on findings that were inappropriate:

061030Cook2 :19 by the staff.”

Cook on physican attendance problems:

063010Cook3 :15 are also gone.”

GOP Governor Candidate Brian Sandoval Releases Education Plan, Calls For End To Tenure And Social Promotion

By Sean Whaley | 11:59 am June 30th, 2010

CARSON CITY – Republican governor candidate Brian Sandoval yesterday released his education plan, calling it a results oriented proposal that would end teacher tenure and the social promotion of students.

The former federal judge, who stepped down from a lifetime appointment to run for governor, also said his plan would be paid for with existing revenues and that no teacher layoffs would be required.

“The education system in Nevada does not measure up and is not providing all our children with the world class education they deserve,” Sandoval said.  “With our graduation rates the lowest in the nation, it’s time to get serious about reform and challenge the status quo.”

The state teacher’s union called several elements of the plan, such as vouchers and the elimination of tenure, a rehash of old ideas pushed by outgoing Gov. Jim Gibbons that are not supported by research. The union has endorsed Democrat candidate Rory Reid for governor.

A spokesman for Reid said Sandoval’s plan borrows from Reid’s EDGE education plan released in March with the addition of vouchers, which Reid does not support.

In his nine-page plan, Sandoval said the current performance evaluation system for teachers and principals is out-of-date and rewards endurance over performance. With recent changes to Nevada law requiring the use of student achievement data in evaluations, Sandoval said there is an opportunity “to modernize the entire system in ways that reward the best, inspire the average to improve, and dismiss those who are failing.”

Sandoval said his plan will require a majority of teacher and principal evaluations to be based on student achievement. Salary schedules based on time served and longevity stipends will no longer be allowed.

The plan would end social promotion by requiring any student who is not proficient on the state’s criterion-referenced reading test by the end of the third grade to be held back for focused reading instruction.

Sandoval said he also supports vouchers to allow parents to have access to private schools, but provided no details on how his proposal would operate.

His plan would also allow parents to move their children out of failing public schools. For schools receiving a “D” or “F” under the state accountability plan, local districts will be required to offer transportation to another school, including schools operated by the district or charter schools located in the same county.

Sandoval said he will also revive legislation killed by special interests in prior legislative sessions to create a Nevada Charter School Institute. The institute’s charge will be to issue charters for the operation of additional public schools that operate outside the constraints of the 17 local school districts.

Other elements of Sandoval’s plan would require schools to receive a letter grade. Schools that get A’s or improve by two letter grades will get extra funds. If a school fails two years in a row, the administrators will be replaced.

“It’s time for a fundamental change from the ground up and the top down,” Sandoval said.  “We must fight for our kids with focused accountability, real consequences, expanded opportunities for choice, and more local control over funding.”

Lynn Warne, president of the Nevada State Education Association, said Nevada’s schools are in crisis, rated last among the states in a recent survey for the quality of its public education, and Sandoval’s plan won’t bring improvement to public education.

“We’ve got a real crisis on our hands,” she said. “We’re going to need to address the funding issue at some point. This political posturing and re-baked Gibbons reform ideas didn’t fly in the past and won’t fly again.”

Reid campaign spokesman Mike Trask said Sandoval’s plan is clearly an effort to back away from a budget-balancing plan he proposed several months ago that would have laid off hundreds of teachers and cut funding for smaller class sizes.

“He clearly wants people to forget about that plan,” Trask said.

Some of the plan appears to borrow from proposals pushed by former Florida Gov. Jeb Bush, where money was taken from failing schools and given to those that didn’t really need the additional funding, he said.

Reid, who released his “EDGE” education plan in March, said his plan would transition every school in Nevada to an EDGE school where community-based decision making would lead to improved student performance. EDGE stands for Economic Development through Great Education.


audio clips:

Reid spokesman Mike Trask on Sandoval plan:

063010Trask1 :27 points on vouchers.”

Trask says Sandoval plan borrows failed ideas from former Fla Gov. Jeb Bush:

063010Trask22 :24 don’t need it.”

Teacher Union President Lynn Warne says Sandoval plan a rehash of failed ideas:

063010Warne :19 in this state.”

U.S. Energy Department Loses Ruling To Terminate Yucca Mountain Licensing, Nevada To Appeal

By Sean Whaley | 11:06 am June 30th, 2010

CARSON CITY – A ruling by a panel of federal judges saying the U.S. Department of Energy does not have the authority to withdraw its licensing application of Yucca Mountain as a nuclear waste repository will be appealed, a Nevada official said yesterday.

Bruce Breslow, executive director of the Nevada Agency for Nuclear Projects, said the ruling is just one step in a very long process.

“We have a long way to go,” he said. “Nevada respects but disagrees with the licensing board’s decision.”

Breslow said the decision was going to be appealed to the Nuclear Regulatory Commission by whichever side lost the ruling. Nevada is in continuing contact with its legal team to determine the best avenue to move forward with the appeal, he said.

Any decision by the NRC will likely be appealed by the losing side as well, Breslow said.

“We’re a long way from getting a final decision,” he said.

The three administrative judges with the NRC’s Atomic Safety and Licensing Board said the Secretary of Energy conceded that the Yucca Mountain application is not flawed nor the site unsafe, but that the motion to withdraw the application with prejudice is a matter of policy because the Nevada site is, “not a workable option.”

The motion was opposed by several entities, including the states of Washington and South Carolina.

The panel of judges rejected the motion to withdraw, finding that the Nuclear Waste Policy Act, “does not give the secretary the discretion to substitute his policy for the one established by Congress in the NWPA that, at this point, mandates progress toward a merits decision by the Nuclear Regulatory Commission on the construction permit.”

The panel said: “Unless Congress directs otherwise, DOE may not single-handedly derail the legislated decision-making process by withdrawing the application.”

Nevada has been fighting the creation of a nuclear waste dump at Yucca Mountain, 90 miles northwest of Las Vegas, for decades.

Earlier this year, in what was viewed as a final victory for opponents of the project, the Obama Administration sought to end the licensing process for the dump.


Audio clips:

Breslow says Nevada will appeal:

062910Breslow1 :12 Nuclear Regulatory Commission.”

Breslow says final decision a long ways off:

062910Breslow2 :15 a final decision.”

National Group Says Nevada Minimum Wage Hike Hurts Teen Hiring, Union Official Disagrees

By Sean Whaley | 4:25 pm June 29th, 2010

CARSON CITY – It may be welcome news for those who have entry level jobs, but a more than 9 percent hike in the minimum wage to take effect Thursday in Nevada will have a chilling effect on hiring, particularly for teens, according to one national group.

A Nevada union official disagrees, saying the minimum wage hike isn’t to blame for the state’s record jobless rate or the high unemployment levels seen among teens in the workforce.

Nevada’s minimum wage will increase to $8.25 an hour on July 1, up from the current $7.55 an hour that took effect on July 1, 2009. For minimum wage workers who have access to qualified medical plans, the wage will be $1 less, or $7.25 an hour, up from $6.55 an hour.

The increase comes as state officials recently announced the Nevada jobless rate hit 14 percent in May, highest in the nation and the highest ever reported in the state. The state Department of Employment, Training and Rehabilitation said Nevada’s employers added 4,800 jobs in May, but most of the increase was seasonal or temporary census hiring.

The agency reported that Nevada’s youngest workers, “are bearing the brunt of the recession worse than any other age group.” At 22.8 percent, the unemployment rate for workers aged 16-24 is nearly twice the rate of other groups, the agency said in its May Economy in Brief report.

The hike in the wage is required as a result of a voter-approved state constitutional amendment in 2006 that tied Nevada’s wage to the federal minimum wage and provided for increases based on inflation. The current federal minimum wage is $7.25 an hour. The Nevada constitutional amendment requires the Nevada wage to be $1 higher.

One critic of the minimum wage hike says it has a negative effect on teen hiring.

“More than one in four teens in Nevada is looking for work without success, and it’s not just because of the recession,” said Michael Saltsman, research fellow at the Washington, DC-based Employment Policies Institute.

The institute looked only at unemployment for those aged 16 to 19 and determined the rate in Nevada was 34.6 percent as of April 2010 – the second highest in the country.

“Minimum wage mandates are keeping teens from finding a job and the coming increase in the Nevada state minimum will make it worse,” he said.

The institute cited a study from Ball State University that attributed the loss of 310,000 teen jobs to the 40 percent increase in the federal minimum wage between July 2007 and July 2009.

“It’s the least-skilled and least-experienced that are hit hardest as a result of increases in the minimum wage,” Saltsman continued. “They’re missing out on the valuable career skills that come from a first job.”

The minimum wage is well intentioned but ultimately does more harm than good, he said. Increased labor costs could lead to the permanent elimination of jobs as employers look for cheaper ways to operate, Saltsman said.

Danny Thompson, executive secretary-treasurer of the Nevada State AFL-CIO, the group that put the minimum wage measure on the ballot, said Nevada’s dismal unemployment picture is not the result of increases in the minimum wage.

“We’re totally dependent on tourism and gaming to make the wheels go round,” he said, “I think that has driven our problems here, along with the foreclosure mess.”

Thompson said putting more money into the hands of the state’s lowest income wage earners will help stimulate the economy because they will spend the additional income.

“They spend it in the economy,” he said. “Which I think right now, given our current economic conditions, is a very good thing.”

He also rejected the suggestion that the high unemployment rate among teens is due to the minimum wage. Thompson said it is the result of competition from adults for the entry level jobs.

Nevada voters supported the ballot measure because they recognized the minimum wage was not a living wage, he said.

“If it were on the ballot today I think it would pass again just as easily,” Thompson said.


Audio clips:

Saltsman on why jobs for teens are important:

062910Saltsman :33 criminal justice system.”

Thompson on why minimum wage hike is beneficial:

062910Thompson1 :28 very good thing.”

Thompson on minimum wage not the cause of teen unemployment:

62910Thompson2 :26 a contribution nonetheless.”

Chilean School Voucher Program Increased High School Graduation Rates, New Study Concludes

By Nevada News Bureau Staff | 3:19 pm June 28th, 2010

CARSON CITY – A major study of a school voucher program operating in the country of Chile for the past 29 years has found both an increase in high school graduation rates and an increase in the number of students going on to college.

A preliminary draft of the lengthy study, performed by researchers from the University of Nevada, Reno, the University of Pennsylvania and the University of Chile, was released today.

Along with other school decentralization efforts, education reforms implemented in 1981 included making Chile the only country in the world to have a nationwide school voucher program.

The study looked at students who began school in the early 1970s all the way up through students who began school in the early ‘90s. It shows that the reforms increased high school graduation rates by 3.6 percent and increased college-going rates by 3.1 percent.

The reforms also increased the rate of those completing at least two years of college by 2.6 percent and the rate of those completing at least four years of college by 1.8 percent.

Sankar Mukhopadhyay, assistant professor of economics at UNR and a co-author of the study, said that while there have been quite a few studies on the possible effects of school vouchers on grades and test scores, there has been very little research conducted on the possible effects of school vouchers on the level of education attained by students, or on employment and earnings.

“I think this study provides very interesting, new information for those considering school vouchers,” Mukhopadhyay said. “I think these results will surprise some people; the results actually surprised us.”

Mukhopadhyay and the research team drew their information from nearly 4,000 people, ranging in ages from 6 to 45.

The study also found that the voucher program significantly increased the demand for private subsidized schools and decreased the demand for both public and nonsubsidized private schools.

In addition, although opponents of school voucher programs have long theorized that vouchers would mostly benefit the rich, this study showed that individuals from poor and non-poor backgrounds in Chile, on average, experienced similar educational attainment gains under the voucher program. There was also a modest reduction in earnings inequity once the voucher reforms were enacted. Overall however, the reforms did not lead to increased overall average earnings.

The reforms reduced the number of people ages 16 to 25 in the workforce by about 2 percent because more people were staying in school longer, Mukhopadhyay said.

“So the earnings benefits of having greater educational attainment were at least partly offset by the delay in entering the workforce.”

Ray Bacon, executive director of the Nevada Manufacturers Association and member of an education reform task force created by Gov. Jim Gibbons, said he is glad to see the analysis but questions whether the results can be attributed solely to the voucher school program. The country implemented a number of reforms at the same time, he said.

“It is interesting that someone has actually taken a look at it,” Bacon said. “In a controlled environment you want to change one thing at a time to see if it had any effect or not.”

But the study contains good data and will no doubt provoke a lot of discussion on the value of a voucher school program, he said. One encouraging finding is that the education reforms in Chile “leveled the playing field” among the different socioeconomic classes, Bacon said.

The study will be published in its entirety in the inaugural issue of a new journal published by the Econometric Society, Quantitative Economics, in August. The co-authors of the study are Mukhopadhyay; David Bravo, economics professor at the University of Chile; and Petra Todd, economics professor at the University of Pennsylvania.

audio clip:

Ray Bacon comment on the voucher study:

062830Bacon :25 people don’t expect.”

Nevada Taxable Sales Up 2 Percent In April, First Increase In 20 Months

By Nevada News Bureau Staff | 3:10 pm June 28th, 2010

CARSON CITY – A sign that Nevada may have finally hit bottom in the national recession emerged today when the Department of Taxation reported an increase in taxable sales in April – the first in 20 months.

Statewide taxable sales totaled $3.3 billion in April, up 2 percent over April of 2009. But for the 10 months of fiscal year 2010, taxable sales are down 11.9 percent over the same period in the prior fiscal year.

Clark County taxable sales were up 3.5 percent to $2.5 billion, but Washoe County’s numbers were down 7.1 percent to $395 million.

Gov. Jim Gibbons said it was the first taxable sales increase since August of 2008, when a tax amnesty program was under way. A new tax amnesty program is set to start Thursday.

This April also saw the launching of the Nevada Appliance Rebate Program that awarded participants up to $200 for replacing an old appliance with an Energy Star model.

“We will be persistent in using all available resources to stimulate and promote the road to Nevada’s economic recovery,” Gibbons said.

Nevada’s major taxable sales categories were a mixed bag in April, with construction industry related sales down 32.1 percent over April 2009 and durable goods off by 15.9 percent. But motor vehicle and parts dealers were up by double-digits to 10.9 percent,

Also up were clothing and accessories stores, 5.2 percent; home furniture and furnishings, 24.2 percent; accommodations, 15 percent; and bars and restaurants, 0.1 percent.

Ten of Nevada’s seventeen counties recorded a decrease in taxable sales for April 2010 compared to April 2009. Carson City, Clark, Elko, Eureka, Humboldt, Lincoln, and Storey counties recorded positive taxable sales for the period.

Gross revenue collections from sales and use taxes amounted to $256 million for April 2010 which represents a 6.4 percent increase compared to April 2009, and a 6.6 percent decrease for the ten months of fiscal year 2010.

The general fund portion of the sales and use taxes collected amounted to $65 million, which represents a 1.2 percent increase compared to April 2009. Compared to the January 2010 Economic Forum projections, the general fund portion of the sales and use taxes is 3.2 percent, or $19.3 million, above the panel’s forecast for the 10 months of fiscal year 2010.

Nevada’s Borrowing To Pay Jobless Benefits On Target Despite Record Unemployment Rate

By Sean Whaley | 4:55 pm June 25th, 2010

CARSON CITY – Despite Nevada’s record high unemployment rate, the amount of money the state expects to borrow from the federal government to pay jobless benefits remains on target, a state official said this week.

Cindy Jones, administrator of the Employment Security Division, said the state has borrowed $424 million so far and is on a pace to borrow between $1 billion and $1.2 billion through the end of the recession to pay the state’s 26 weeks of unemployment benefits to laid off workers.

Jones said Nevada’s record 14 percent jobless rate reported in May includes all those seeking work, not just those eligible to receive benefits. The long-term unemployed also don’t have any new wages on which to file claims, she said.

“The increase in the unemployment rate does not necessarily translate into an increase in unemployment insurance claims,” Jones said.

“We’re still seeing very high claim volume compared to anything we’ve experienced at any other time in the program’s history, but we’re not seeing the rapid rise that we saw last year,” she said.

That $1 billion or more in borrowed funds will likely have to be repaid to the federal government, which means higher unemployment taxes imposed on Nevada businesses to make good on the loans.

The average tax paid by most Nevada employers was kept at 1.33 percent for the current year, despite the knowledge that the rate would be inadequate to pay all unemployment claims. The rate was held steady to help businesses weather the economic slowdown.

Jones said over 40 states are expected to borrow about $100 billion from the federal government to pay benefits during this recession. Nevada began borrowing money in late October of 2009 to keep paying claims, holding off longer than many other states because of a healthy trust fund.

The states are getting a break in that no interest is accruing yet on the borrowed funds, she said. Interest was waived this calendar year but will begin on Jan. 1 unless Congress acts to extend the interest free period, Jones said. Nevada’s first interest payment of about $60 million is scheduled to come due in the fall of 2011.

Nevada was prepared for a recession and had a healthy trust fund available to pay claims, Jones said. But no one was prepared for a slowdown of the magnitude that hit the nation, she said.

Mary Lau, president and chief executive officer of the Retail Association of Nevada, said the expectation that businesses will have to repay the federal loans through higher unemployment tax rates could negatively impact job growth when the state does emerge from the recession. Employers may not be as quick to hire, she said.

“Everybody is going to be paying more,” Lau said. “Some of the jobs may not come back.”

Other factors, including the new minimum wage requirements, will also affect hiring, she said.

The state’s minimum wage is set to go up to $8.25 a hour on July 1. The current rate is $7.55 an hour.

It is highly unlikely the federal government will forgive the loans, Lau said.

audio clips:

Cindy Jones says unemployment rate doesn’t directly correlate with jobless claims:

062410Jones1 :14 eligible for benefits.”

Jones says Nevada not alone in borrowing to pay claims:

062410Jones2 :21 certainly not alone.”

Jones said Nevada was ready for normal slowdown:

062310Jones3 :28 find ourselves in.”

Mary Lau says increased unemployment taxes may slow job creation:

062410Lau1 :14 that much more.”

Nevada Secretary of State’s Business Portal Project Moves Forward With Lawmaker OK

By Nevada News Bureau Staff | 11:41 am June 25th, 2010

CARSON CITY – A one-stop shop for businesses to access Nevada state programs and services is moving forward with lawmaker approval Thursday of a contract to develop the first of its kind business portal in the secretary of state’s office.

A $4.5 million contract to develop the technology for the portal is being awarded to Capgemini Government Solutions by Secretary of State Ross Miller, who conceived the project. The contract will be considered by the Board of Examiners on July 13 and the work is expected to begin shortly thereafter.

The portal is expected to be operational by the spring of 2011.

“This groundbreaking new service will also get the attention of business executives across the country who are looking to expand or relocate to a more business-friendly environment,” Miller said. “The business portal will streamline how companies do business with state agencies to the extent that it will make Nevada decidedly more competitive than we already are in attracting new business.”

Funding for the contract was approved by the Legislature’s Interim Finance Committee.

Assembly Majority Leader John Oceguera, D-Las Vegas, who sponsored legislation to create the portal in 2009, said it will bring multiple benefits to the state.

“It will allow us to greatly improve service to Nevada businesses, realize unprecedented efficiencies in state government and capture millions of dollars in revenue that have typically been lost to the state,” he said.

Capgemini Government Solutions is one of the world’s largest information technology consultancy services. The company has a successful track record in working with other state agencies and demonstrated a clear understanding and shared vision of the portal during the vendor selection process. The contract to develop the technology, including service oriented architecture, portal, business intelligence, content management, and identity and access management, runs through February 1, 2011.

Currently, millions of dollars in revenue are lost because state agencies are not able to cross check data to make sure all entities conducting business in the state are properly licensed, registered, and permitted. The portal is expected to correct that inefficiency.

This second phase of the project will develop a wizard functionality to integrate the business services of the secretary of state’s office and the Department of Taxation. Through the portal, businesses will be able to apply for and receive their sales and use tax permits, receive and renew their annual state business licenses, file articles of incorporation, file annual lists of officers and conduct other important business all in one online visit and with one online payment.

The portal will also provide a path for businesses to follow to conduct transactions with other state, county, and city agencies.

The portal is expected to also greatly improve government efficiency by eliminating paper-based processes that lead to errors and delays in service, streamlining data storage and retrieval, improving security, and reducing administrative costs.

Nevada Stimulus Funds Director To Remain In Position, Not Take Veterans Services Post

By Nevada News Bureau Staff | 9:55 am June 25th, 2010

CARSON CITY – The director overseeing Nevada’s stimulus programs will remain in his current position rather than accept the job of executive director of the Office of Veterans Services, Gov. Jim Gibbons has announced.

Gibbons had earlier this week appointed Charles Harvey to head up the veterans services office starting at the end of July.

But in a letter to the Gibbons administration dated Thursday, Harvey requested that he remain in the position overseeing Nevada’s American Reinvestment and Recovery Act (ARRA) programs.

Gibbons supported his request. A new appointment of a veterans services executive director will be announced soon. The current executive director, Tim Tetz, has accepted a position as national legislative director for the American Legion in Washington, DC.

In his letter, Harvey said with Nevada’s unemployment rate at 14 percent, a change in leadership over the ARRA programs, “may not be in the best interests of the citizens of Nevada.”

New Nevada Tax Amnesty Program Set To Begin July 1

By Nevada News Bureau Staff | 4:16 pm June 24th, 2010

CARSON CITY – Nevada is about to begin a new tax amnesty program in the hopes of bringing in several million dollars worth of uncollected revenue to help with a severe budget shortfall.

The amnesty program, which will run for three months beginning July 1, was approved by the Legislature in a special session in February as a way to help close an $800 million gap in the general fund budget.

The amnesty, which will allow taxpayers to pay taxes owed without any interest or penalties, is expected to bring in an estimated $10 million. It is being administered by the state Department of Taxation.

A previous amnesty authorized by Gov. Jim Gibbons in 2008 brought in more than $27 million. It only covered sales and use taxes, business license fees and modified business taxes.

The new amnesty program, as approved in Assembly Bill 6 of the 2010 special session, is broader, including cigarette taxes, liquor taxes, insurance premium taxes and other levies.

The one-time amnesty is for businesses and individuals who owe taxes that were due before July 1, 2010 and have not been paid. The program will allow penalty and interest to be waived provided the outstanding tax debt is paid in full during the amnesty period.

Certain restrictions apply to taxpayers who have already entered into settlement agreements or offers in compromise with the Nevada Department of Taxation.

Millennium Scholarship Recipients Could Get Shortchanged In Upcoming School Year

By Sean Whaley | 1:57 pm June 24th, 2010

(Updated at 6:57 p.m. on Thursday, June 24.)

CARSON CITY – Nevada high school graduates intending to rely on the Millennium Scholarship to attend college in state this fall could find themselves with more out-of-pocket expenses because of a $4.2 million projected shortfall in the program.

The shortfall is the result of money from a tobacco legal settlement that funds the scholarship coming in at a lower level than previously projected. The annual payments from tobacco companies are made each April. The 2010 payment was 10 percent less than projected due primarily to lower smoking rates.

Lawmakers were told today that if the scholarship revenues are inadequate to pay the full amount due each student, the payment would be reduced by a percentage based on the amount of money available.

If a shortfall in funding materializes as expected, students will likely see only a percentage of their scholarship paid in the fall semester because of cash flow issues, said Chief Deputy State Treasurer Mark Winebarger. Because the annual tobacco payment will be made in April 2011, students should get their full scholarship payments in the spring semester, he said.

After the meeting, Winebarger estimated that without any changes to the program, eligible students will receive only 65 percent of their scholarship amounts in the fall 2010 semester.

The Legislature’s Interim Finance Committee today delayed a vote on a transfer of $200,000 from a separate college savings program to prop up the scholarship. The infusion would be far short of what is needed to erase the shortfall.

Senate Majority Leader Steven Horsford, D-Las Vegas, said the Millennium shortfall will be taken up at a future meeting of the committee. More evaluation of the issue is needed, he said.

In addition to the tobacco settlement funds, the scholarship has been funded with revenues from the state’s Unclaimed Property Fund managed by the treasurer’s office. That revenue source was diverted by lawmakers to help fill a hole in the general fund budget after getting reassurances that the scholarship would remain solvent until 2014.

More recent projections on the anticipated size of the annual tobacco settlement payments show instead there will be a shortfall in the upcoming fiscal year, however.

Several other funding options to fill the shortfall were discussed by state officials but determined not to be legally viable. A proposal to use $2.6 million available in a separate college savings trust fund was also discussed but not uniformly supported by lawmakers.

Sen. Bob Coffin, D-Las Vegas, argued against taking any money from the college savings trust fund to subsidize the scholarship. He said the shortfall is the result of actions by the Legislature to balance the general fund budget.

“If there is a shortfall we did it,” Coffin said.

The program, named for former Gov. Kenny Guinn, costs about $25 million per fiscal year, with that amount projected to rise to $26 million in fiscal year 2012. About 21,000 students are using the scholarship, with 60,000 students participating since its inception in 2000.

The scholarship ranges from $40 to $80 per college credit hour depending on the college attended. The scholarship limit is $10,000. Students must qualify by earning a high enough grade point average in high school. Students must also maintain a minimum GPA while in college to continue receiving the scholarship.

audio clips:

Sen. Bob Coffin on legislative decision to take money from scholarship fund:

062310Coffin1 :15 taken that money.”

Coffin says it was bad policy to take money from the scholarship fund

062310Coffin2 :20 rather than later.”

Lawmakers OK Funding For Official Portrait Of Outgoing Gov. Jim Gibbons

By Nevada News Bureau Staff | 12:25 pm June 24th, 2010

CARSON CITY – A panel of lawmakers today approved a $20,000 appropriation to commission an official portrait of out-going Gov. Jim Gibbons.

The request by the Department of Cultural Affairs for the funding from the Interim Finance Committee’s contingency fund was approved without comment by lawmakers.

The request was submitted after Gibbons lost his re-election bid in the June primary to GOP challenger Brian Sandoval. Gibbons will leave office as the state’s 28th governor in early January. A new governor will be picked by voters in November.

Nevada law provides an appropriation for a portrait of each governor when they leave office for display in the state Capitol Building. The last portrait to be unveiled was that of former Gov. Kenny Guinn in May of 2007. Gibbons unveiled the portrait at the ceremony attended by his predecessor.

By law each portrait is the same size. Every new portrait is hung at the north side of the main entrance to the Capitol, moving their predecessors’ portraits back one space.

A committee will review the work of multiple artists before making a selection for the portrait.

Nevada State Prison Closure To Wait For More Information, July Prison Board Meeting

By Sean Whaley | 5:50 pm June 23rd, 2010

CARSON CITY – A plan to close Nevada State Prison in phases over the next several months will be on hold for further consideration by the Board of Prison Commissioners next month, but Gov. Jim Gibbons said today that he will continue to authorize transfers of inmates for safety and security reasons.

Gibbons last week announced his plan to close the facility in the capital in phases over the next six to eight months.

But Secretary of State Ross Miller, a member of the prison board, asked for a meeting on the issue. During an hour-long discussion today on the planned closure, Miller said it is clear the board, not Gibbons, has the authority to decide if the aging facility should be mothballed.

The board voted 2-1, with Gibbons opposed, to halt any efforts aimed at closing the facility until the board meets again on July 13.

Miller called Gibbons a “lone wolf” on the prison closure issue, saying the Legislature has twice rejected the idea in bipartisan votes.

Gibbons said his staff is continuing to research whether he has the legal authority to unilaterally move forward with the closure. While there were emotional arguments made at the meeting against shutting the facility down, the safety of officers and residents of the capital come first, he said.

Furloughs mandated by the Legislature for corrections employees that will begin July 1 could potentially affect the facility from a safety standpoint, Gibbons said.

The closure is expected to come up at a meeting Thursday of the Legislature’s Interim Finance Committee.

In announcing the closure last week, Gibbons said it costs taxpayers an extra $4,000 to $6,000 per inmate for prisoners at NSP because the facility is so old and poorly designed. He also said it is not as safe as some other facilities.

More than 650 inmates were being held at NSP but recently three housing units have been closed and about 200 inmates transferred to other institutions.

Corrections Department Director Howard Skolnik said the more than 200 positions at the facility, mostly correctional officers, can be accommodated at other facilities in Northern Nevada without the need for layoffs.

He said the phase out of the facility can wait until the July 13 meeting.

Miller and the third member of the board, Attorney General Catherine Cortez Masto, said they made it clear to Skolnik in January 2008 that they wanted the board to have a say in major policy decisions involving his department. Miller said Gibbons tried an “end run” around the board anyway.

The board, the community, corrections officers and others should have the chance to weigh in on such a proposal, Masto said.

Miller said the board may ultimately agree with the plan to close the  prison, but more information is needed to make an informed decision.

Steven Houk, a correctional officer at the prison, spoke at the meeting and said the closure was a “last-ditch” power grab by Gibbons.

Gibbons lost his re-election bid in the June primary to GOP opponent Brian Sandoval and will leave office in early January.

audio clips:

Gibbons says security issues outweigh other factors in prison closure:

062310Gibbons1 :17 in the community.”

Gibbons says closure will proceed if security is an issue:

062310Gibbons2 :21 the appropriate action.”