Archive for January, 2011

Gov. Sandoval Seeks Justification For Continued Existence Of 183 State Boards

By Sean Whaley | 4:20 pm January 31st, 2011

CARSON CITY – They have names like the Landscape Architecture Board, the Nevada Arts Council and the Commission on Mineral Resources, and there are more than 180 of them functioning within Nevada state government.

Gov. Brian Sandoval says it’s time to take a look at these dozens of boards and commissions to determine if they are still needed or if some can be consolidated or eliminated in the name of government efficiency.

In his State of the State address Jan. 24, Sandoval said: “I will work with legislative leadership to introduce a bill that ‘sunsets’ every licensing and advisory board now on the books. More than 180 of these entities require gubernatorial appointments. Under our proposal, boards and commissions will sunset at the end of June 2013, giving us plenty of time to eliminate, consolidate, or improve functions among those that must remain.”

Dale Erquiaga, senior adviser to Sandoval, said in an interview last week that the first objective of the review is to improve state government efficiency. But cost savings could also result if some board operations can be combined, using one staff to provide clerical, legal and other administrative support to multiple panels, he said.

Many of the boards are small organizations that meet infrequently at best. Others serve major functions for the state, from the Gaming Commission to the Board of Medical Examiners.

“First and foremost it is about efficiency and responsive government,” Erquiaga said. “If we have that many boards and commissions, are we really serving constituents well?

“We have 183 of them just on our side,” he said. “There are other commissions we don’t appoint. It’s harder and harder for the attorney general to staff. It’s harder and harder for the administrative assistants and the departments to staff them. So really first it’s about efficiency and responsiveness. The cost savings will follow on.”

Erquiaga said some in the medical community have advocated for the consolidation of the services provided to the many different medical boards, from the State Board of Nursing to the Board of Medical Examiners to the Nevada State Board of Oriental Medicine.

“They each have an executive director and they each have a lawyer and they each have a secretary,” he said. “Couldn’t there be some ‘back of house’ consolidation there if you can’t consolidate the boards?”

Many of the state’s major and important boards, from the Gaming Commission to the Public Utilities Commission to the Colorado River Commission clearly will continue to operate, Erquiaga said.

“There are some others that perhaps might not,” he said.

Appointees to many of the boards are paid a modest stipend for attending a meeting, typically $80, plus travel and expenses.

Sandoval isn’t the first to make such a recommendation. The Nevada SAGE Commission, created by former Gov. Jim Gibbons to recommend efficiencies in state government, suggested a similar review.

One of the recommendations from the Savings and Government Efficiency Commission was to create a statutory panel of lawmakers and administrative staff in part to periodically review if there are duplication of efforts, efficiencies to be achieved and potential elimination of functions for the many state boards.

The commission said in its final report: “The state needs a formal process and structure to review on a rotating basis every 10 years the requirement for, as well as the policies and programs of, those state agencies and commissions not created by the constitution; . . .”

Carole Vilardo, president of the Nevada Taxpayers Association and a member of the SAGE Commission, said the consolidation of some boards could lead to savings in personnel costs with the better use of deputies in the attorney general’s office or with hearing officers.

One example offered up in discussions was consolidating the staffing of the barber and cosmetology-related boards, she said.

“We get so caught up in what the current issues are we don’t take a look at what may have outlived its usefulness,” Vilardo said.

Vilardo said it took a long time for the state to eliminate its selective service panel after there was no longer a draft.

The Legislature has taken note of the issue as well.

The Legislative Commission in May agreed to draft a bill to repeal an old statute creating the state’s Advisory Council on the Metric System.

The seven-member council was created in 1981 when the federal government was moving forward with a program of getting the states to convert to the metric system. Congress in 1975 passed the Metric Conversion Act to plan for the conversion.

That effort was derailed in 1982 when President Ronald Reagan eliminated funding for the conversion effort. The state advisory council, placed under the authority of the Department of Agriculture, has not met since the mid-1980s.

Audio clips:

Sandoval Senior Adviser Dale Erquiaga says too many boards may be creating inefficiencies:

013111Erquiaga1 :07 serving constituents well.”

Erquiaga says there is likely room for some consolidation:

013111Erquiaga3 :06 need 183 boards.”

Florida Judge Rules Health Care Law Unconstitutional

By Andrew Doughman | 4:01 pm January 31st, 2011

A Florida judge ruled today that a key provision of President Barack Obama’s health care reform law is unconstitutional.

U.S. District Judge Roger Vinson, a Ronald Reagan appointee serving in Pensacola, Fla., ruled in favor of the 26 states that argued the law’s provision that imposes penalties on people who don’t purchase health insurance is unconstitutional.

In a 78-page ruling, Vinson said that the law will remain in effect so long as the appeals process continues. He did, however, rule that the whole act would be declared void if appellate courts uphold his decision.

“Because the individual mandate is unconstitutional and not severable, the entire act must be declared void,” Vinson writes.

He ruled that the “individual mandate” requiring individuals to purchase health insurance oversteps the regulatory authority of Congress through the Commerce Clause of the Constitution.

The requirement does not take effect until 2014. Other implementation deadlines come sooner.

Gov. Brian Sandoval has said before that portions of the law were “unconstitutional.” He supports the lawsuit to which Nevada is a party.

Time is of the essence in settling this issue because we are being forced to implement portions of this law,” he said in reaction to the Florida ruling.

Nevada’s Department of Health and Human Services is already implementing the first phases of the law, which include setting up a statewide health insurance exchange.

Mike Willden, the department’s director, has said that the state will continue implementation so long as the law is upheld.

Supporters of the law have held that the controversial “individual mandate” requirement of the law is important for other important elements to take effect, including the provision that bars insurance companies from denying a person coverage for preexisting conditions. Unless everyone has insurance, the idea of spreading risk among the populace may not work.

Nevada had joined the lawsuit under former Gov. Jim Gibbons via attorney Mark Hutchinson after the state’s Democratic attorney general Catherine Cortez Masto declined to pursue legal action.

Before the challenge reaches the Supreme Court, Congress may change the act. Sen. Harry Reid already wants to remove a section that he said imposes burdensome reporting requirements on small businesses.

Ultimately, the U.S. Supreme Court will have the final say on the constitutionality of this bill.  As I have stated before, the President should work with Congress to find real solutions to healthcare reform instead of allowing a protracted court battle,” said Rep. Dean Heller, R-Nevada.

Newly-elected Republican Congressman Joe Heck has also recently said he’d like major overhauls to what he called the “job-killing” law.

Today’s ruling comes after U.S. District Judge Henry Hudson, a George W. Bush appointee, ruled in a Virginia case that some parts of the act were unconstitutional. Previously, two other judges had thrown such challenges out.

The Obama administration appealed the Virginia ruling and is expected to appeal today’s ruling. The Florida case may now move to the 11th Circuit Court of Appeals in Atlanta. Some expect the case will eventually be heard before the U.S. Supreme Court.

The ruling further illustrates the party-line split when it comes to the constitutionality of the Obama law.

Nearly all 26 of the attorneys general and governors involved in the lawsuit are Republicans. Judges appointed by Democrats have upheld the law’s constitutionality whereas Republican appointees have ruled it unconstitutional.

Hundreds of Citizens Raise Budget Concerns At Reno Town Hall

By Andrew Doughman | 4:00 am January 30th, 2011

RENO – When Gov. Brian Sandoval’s staff reduced funding for the Sierra Regional Center in the governor’s proposed budget, he may not have known what that would mean to the Stangelands.

Eric and Brandi Stangeland testified before a bipartisan group of 13 legislators on behalf of their four-year-old son Zander, who has autism. The couple said they’ve already sold their cars and are declaring bankruptcy because their out-of-pocket expenses to care for their son are so high. Along with 176 other families, they receive $1,500 per month through the Sierra Regional Center.

To me, you’re leaving 176 families in the wind,” Eric Stangeland said. “Just cut a little of it. Don’t cut all of it. If you take that $1,500 a month away to pay for these tutors and to pay for the therapy, you’re taking a chance for my son to have a future.”

More than 100 other speakers testified at the Washoe County Commission chambers earlier today. At times heartbreaking, at times fiery, their collective testimony added human faces to the funding cuts or program eliminations Sandoval has proposed in his $5.8 billion budget.

Mark Burchell, a formerly homeless man who passed through Nevada’s Mental Health Courts, which could be eliminated, said the program turned around his life. He’s now a chapter president of the National Alliance on Mental Illness.

Shirley Diaz, a UNR student who said she was representing minority interests, said that tuition increases could make college inaccessible to many lower-income and minority students.

You’re going to keep pushing them out of the system,” she said. “You’re going to make a permanent lower class.”

The hundred other Nevadans who testified did so as teachers, public employees, students, people with disabilities, parents and advocates for education and human services. Their testimony offered legislators bleak snapshots of the effects of the governor’s budget: students unable to pay for college, people with disabilities struggling to get by, graduates vowing to leave for greener pastures.

Unlike at the concurrent town hall meeting in Las Vegas, supporters of Sandoval’s budget were largely absent. Taken together, about 1,400 people showed up for the two meetings.

The town hall meetings were the first time the public has had a chance to air concerns about the governor’s budget. Sandoval released his budget this past Monday, when he also delivered his State of the State address. Directors of various state agencies briefed legislators and took questions regarding the effect of the governor’s budget this past week.

The town hall meeting in Reno and a concurrent meeting in Las Vegas allowed more than 200 citizens to illustrate in human terms the effects of cuts that policymakers had so far addressed mainly as percentages and dollar figures.

Many proposed tax increases: on mining, on corporate incomes, in the form of a lottery, or as a sales tax on services.

I for one would like to give more to hep the state of Nevada,” said Erik Schoen, who testified as a private citizen. “I give you permission to pass a tax act named after myself. … I would be willing to pay taxes to help support the vision, to help support the roads, to help support mental health.”

Many others concurred. Arguments progressed along two strains. Some argued that the cuts would lead to a other problems and a greater fiscal burden for the state than if the programs continued. Others said that the state receives a significant benefit from investing in the programs it funds.

To pay for these services, the bulk of the audience gave their nod to tax increases.

Legislators, however, weren’t so sure. Among the seven Democrats and six Republicans listening to the testimony, not one publicly voiced support for any of the taxation ideas. For now, legislators say they’re examining their options.

But the testimony provided legislators with ample evidence of just how much the cuts would hurt. That testimony might be valuable later to add some spice to a politically unsavory tax increase.

The governor has said repeatedly, however, that he would veto any bill with a tax increase. He also wants to let temporary tax increases expire later this year, a move he says will help businesses. He has also said he supports education, but will not spend more because the state can do more with the money it has.

Those budget talks will resume Tuesday, and the Legislature convenes Feb. 7.

Federal Report Sheds Light On Nevada’s Dismal 2010 Unemployment Picture

By Sean Whaley | 4:24 pm January 28th, 2011

CARSON CITY – The fact that Nevada has the worst unemployment rate in the nation isn’t exactly news, but a report released today by the U.S. Bureau of Labor Statistics provides an in-depth picture of just how bad it was in 2010.

The report shows that Nevada’s “actual” unemployment rate for the calendar year was 23.6 percent, with California second at 22.1 percent.

The actual unemployment rate shows a much worse jobless situation both in Nevada and nationally because it uses a broader definition that encompasses workers who are too discouraged to seek employment and have given up searching, and workers employed part time for economic reasons.

Persons employed part time for economic reasons are those working less than 35 hours per week who want to work full time, are available to do so, and gave an economic reason (their hours had been cut back or they were unable to find a full-time job) for working part time, the bureau reports. These individuals are sometimes referred to as involuntary part-time workers.

Using this measure, nearly one in four Nevadans was unemployed or “underemployed” in 2010.

The rate is one of six “alternative measures of labor under-utilization” generated by the bureau, another of which is the much lower official monthly unemployment rate.

The Nevada Department of Employment, Training and Rehabilitation, which announces the official monthly unemployment rate for the state, had this to say about the actual unemployment rate when it cited the figure in a release last year, “. . . from a policy perspective, the actual unemployment rate presents a more complete picture of what is currently occurring in the economy.”

The Bureau of Labor Statistics report also shows that by any one of six different measures of unemployment in 2010, Nevada ranked the worst.

“In 2010, Nevada reported the highest rate for all six alternative measures of labor under-utilization,” the report says.

Nevada reported last week that the official unemployment rate in December was 14.5 percent, up two-tenths of a percentage point over November. Nevada again had the highest rate in the nation, followed by California and Florida.

For the 2010 calendar year, Nevada averaged 14.4 percent unemployment, again, highest in the nation.

Board of Regents Chairman Calls For Tax Increases

By Andrew Doughman | 2:41 pm January 28th, 2011

A prominent education official has called for tax increases to offset the proposed higher education budget cuts in Gov. Brian Sandoval’s budget.

James Dean Leavitt, chair of the board that governs Nevada’s higher education system, said today that he would like the Legislature to use a “revenue enhancement” to offset every dollar the governor proposes to cut from the system.

He said that the Legislature should maintain the level of funds that it appropriated to Nevada’s higher education system during the 2010 special session.

Sandoval’s budget recommends a $162 million reduction in state spending for the next biennium. Chancellor Dan Klaich, who oversees the Nevada System of Higher Education, said yesterday at a legislative budget subcommittee hearing that a 73 percent tuition increase would be necessary to offset that decrease.

Leavitt said the universities and colleges of this state have already taken three successive years of cuts and any further cuts would have a “cataclysmic impact” for the state. While acknowledging the need for spending accountability, he said the system should be properly funded.

“That means coming up with new revenue from any and all sources,” he said. “What’s unfortunate is that we look at any revenue enhancement as a burden and … not a public good.”

Leavitt is the chair of the Board of Regents, the governing body that determines how to spend the money the Legislature appropriates to it. The Board of Regents oversees all of the state’s universities and community colleges.

He condemned the proposed budget cuts at a town hall meeting at UNLV earlier today.

Sandoval, however, has said repeatedly that he would not support a tax increase and would veto any bill containing one.

The governor has also repeated a mantra that government agencies should make each dollar go further.

“You have to have money in order to invest money,” said Dale Erquiaga, the governor’s senior adviser, at a press conference yesterday. “All investors know, when you only have a finite amount of money, you have to make your money work harder, and we believe the budget does that.”

The governor responded to criticisms of his proposed budget in a statement released this afternoon. “It is important for Nevadans to know that we are not the only state facing challenges in funding higher education,” he said. “The economic situation across the nation is forcing governors and Legislatures to make reductions in higher education spending. Some are facing even deeper cuts than Nevada.”

Leavitt, however, said that there’s “tremendous support” for properly funding higher education, partially because there’s a direct public benefit from the system.

Yesterday, Klaich came close to voicing support for a tax increase.

“I’m not sure that the people of Nevada don’t want taxes to support education,” he said. “I don’t just accept the fact that our friends and neighbors don’t want to support education by means of enhanced revenues.”

Other higher education officials have been less supportive of any spending increases. Mark Alden, a member of the Board of Regents, said that new taxes should be the last resort.

He said he needs more time to study the budget and look at every way to cut expenses first. If further evaluation proves the higher education system needs more funding, he said he would support a “modest business tax.”

Today, Senate Majority Leader Steven Horsford, D-Las Vegas, responded to the proposed higher-education budget cuts with a letter slamming the governor’s plan.

Speaker John Oceguera, D-Las Vegas, has also criticized the governor’s proposed cuts to both the K-12 and higher education budgets.

“We all understand that we will not be able to turn around this economy without a well-educated workforce to attract new businesses, yet the governor is proposing draconian cuts to education funding,” he said in a statement released earlier today.

Democrats in the Senate and Assembly have, however, thus far proposed no plan of their own to counter the governor’s.

Erquiaga yesterday challenged Democrats to present their own plan.

“The governor has put his cards on the table,” Erquiaga said. “The other side is talking about the hand they hold.”

The people of Nevada will get to weigh in with their thoughts regarding revenue and budget cuts at tomorrow’s budget, town hall meetings in Reno and Las Vegas.


Nevada Fares Well Among States In Moody’s Report On Public Employee Pension Debt

By Sean Whaley | 2:16 pm January 28th, 2011

CARSON CITY – Nevada fares well among the states in a new report that includes unfunded public pension liabilities as part of overall state debt.

This despite Nevada’s long-term unfunded public employee pension liability, which hit $10 billion as of June 30, 2010. Nevada’s public pension plan is 70.5 percent fully funded, down from 72.5 percent in fiscal year 2009.

Moody’s Investors Service announced yesterday it is recalculating states’ debt burdens to reflect pension liabilities.

“Pensions have always had an important place in our analysis of states, but we looked separately at tax-supported bonds and pension funds in our published financial ratios,” said Moody’s analyst Ted Hampton in a news release about the new report. “Presenting combined debt and pension figures offers a more integrated – and timely – view of states’ total obligations.”

Nevada ranks well in the analysis.

The Moody’s report shows that Nevada ranks 40th lowest when the unfunded pension liability is factored into a state’s debt as a share of the gross domestic product at 3.1 percent.

The top three states are Hawaii at 16.2 percent, Mississippi at 15.9 percent and Connecticut at 15.2 percent.

When viewed as state debt per capita, Nevada is again ranked 40th lowest at $1,547.

The top three states in the per capita ranking are Connecticut at $9,366, Hawaii at $7,987 and Massachusetts at 7,872.

Moody’s said that given the level of fiscal stress being felt by most states and the prospects for sluggish economic growth and slow revenue recovery, pension funding pressures will continue to have a negative impact on state credit quality and state ratings. Moody’s also recognizes that, as currently reported, pension liabilities may be understated.

Moody’s presentation of combined debt and pension figures as part of a more integrated view of states’ total obligations follows a period of rapid growth in unfunded pension liabilities.

“Pension underfunding has been driven by weaker-than-expected investment results, previous benefit enhancements, and, in some states, failure to pay the annual required contribution to the pension fund,” Hampton said. “Demographic factors – including the retirement of Baby Boom-generation state employees and beneficiaries’ increasing life expectancy – are also adding to liabilities.”

In Nevada, the Legislature has followed the recommendations of an independent consulting actuary on the contribution rates required for the Public Employees Retirement System, which covers virtually all state and local public sector workers. Contribution rates by the state and local governments and their employees are set to rise again in the coming two fiscal years to maintain the long-term financial health of the plan.

Moody’s said that the evaluation of current and projected pension liabilities is an important area of focus in its rating reviews. For some states, such as Illinois, which is rated A1 and has a negative outlook, large and growing debt and pension burdens have already contributed to rating changes.

Moody’s said states as a group are highly rated – currently A1 or higher – because of their control over revenue and spending that may help address the recent growth in their pension liabilities.

Nevada retained its double-A rating from the nation’s three major credit rating agencies, including Moody’s, in advance of a bond sale in December. “AA” ratings are judged to be of high quality and are subject to very low credit risk. “AAA” is the highest rating possible, with “CC” being the lowest.

Moody’s did revise its intermediate outlook for Nevada to “negative” from “stable” late last year however, which could mean a ratings change in the months ahead.

Moody’s cited a “very large expected budget gap” for the next biennium and uncertainty about how the gap will be eliminated as a reason for the change in outlook. Also mentioned were Nevada’s weak economy and “uncertainty around the recovery of gaming in the state.”

Hampton said many states are beginning to respond to the growing challenge of pension liability by increasing contribution requirements, raising minimum retirement ages, and undertaking other reforms.

The Nevada Legislature implemented some reforms to PERS in the 2009 session, including raising the retirement age from 60 to 62 with 10 years of service for newly hired public employees.

Newly elected GOP Gov. Brian Sandoval wants to undertake a major change to the retirement system, however, switching from a defined benefit plan to a defined contribution plan for future employees. He offered no details of what the change should look like in his State of the State address on Monday, only asking the Legislature to quickly send him a package of reforms.

Amid Budget Cuts Debate, University Students Organizing

By Andrew Doughman | 5:33 pm January 27th, 2011

RENO – He looked out into the audience at the University of Nevada, Reno and said: “if lawmakers want to invest in something, we want to make sure they invest in us.”

Behind him, a Powerpoint presentation displayed tactics for talking to lawmakers about higher education budget cuts.

He is Casey Stiteler, the UNR student directing the newly-created student government Department of Legislative Affairs. After years of budget cuts, he and dozens of other students have coalesced into something of a self-advocacy group.

But their protests won’t be of their parents’ variety. Gone are the marches and megaphones.

These students speak of biennial budgets and pepper their talk with names of state Senators and Assembly members. They’re very worried about the state’s Tobacco Settlement money, which is the pot of money from which many of them draw benefits in the form of Millennium Scholarships.

They’re also very upset that Gov. Brian Sandoval’s budget includes a $162 million reduction in state support to higher education.

Stiteler and ASUN Senator Jonathan Moore briefed about 40 students Wednesday night about the state of higher education before delving into what might be called a strategy talk.

They shared talking points and reviewed budget figures. A sheet went around the room onto which students wrote their e-mails so they could receive legislative updates from Stiteler.

Slowly, a strategy developed. Students said they need to show legislators the impact of the cuts on their chances for success. They’ll also need to convince legislators that the system can’t take much more strain.

Lastly and perhaps surprisingly, Stiteler and others in the room seemed resigned to higher tuition and fees. Rather than fight a reasonable increase that could keep the lights on, they called for more control.

We need to have a promise from Carson City that we get to keep that money on campus and let it have a direct impact on education,” Stiteler said. “There are some moves we can try to make to see our dollars work for us.”

The first move will be this Saturday. Students plan to arrive by the busload at a Reno town hall meeting to discuss budget cuts.

We can have a big impact,” Stiteler explained. “One of the lawmakers who is going to be there is Debbie Smith, and she is the chair of Ways and Means, which is kind of the money committee.”

Ben Pelt, a 22-year-old UNR student, said he’s going to shift around his work schedule to be at the Saturday hearing.

Having educated people in the economy is going to be our future,” he said. “It depends on people going through college and getting an education.”

In such a budget-conscious Legislature, the students plan to appeal to the pocketbook.

Today, Dan Klaich, the chancellor of the Nevada System of Higher Education, spoke before a legislative committee reviewing the governor’s proposed higher education budget. During his testimony, he called students “human capital” and universities “critical places of workforce development.”

Noting that the University of Reno had already shuttered services like the career center and eliminated whole majors, the students plan to say that further reductions could throw a wrench right into the state’s biggest economic engine.

But they aren’t naïve either.

When it does come time to cut, there’s very few things to choose from,” Stiteler said. “If anyone is going to be chosen to shoulder the burden … a lot of people come to higher education.”

So what’s the answer?

Like many legislators, they don’t know quite yet.

Part of the game, though, is just showing up.

If we all band together there’s a very good chance that we’ll have an effect on this,” Stiteler said.

Future Of Millennium Scholarship Focus Of State Lawmaker Interest In Upcoming Session

By Sean Whaley | 3:34 pm January 27th, 2011

CARSON CITY – While several state lawmakers say they are seeking changes to the popular Millennium Scholarship for Nevada’s academically successful high school graduates, no one yet is pushing for income eligibility restrictions to ensure the program’s continued viability.

None of the five bills requested so far dealing with the program, which has faced funding problems in recent years due to budget cuts and reduced revenues, seeks to restrict eligibility to those in financial need.

Two measures, one by former state Sen. Bill Raggio, and another requested by the Senate Finance Committee, were requested to ensure continuation of the program.

The need for these two measures will now be evaluated based on Gov. Brian Sandoval’s recommendation to continue the program as is. He has proposed adding $10 million in general funds to ensure its financial viability through 2016.

Dale Erquiaga, senior adviser to Sandoval, said the governor would consider legislation to impose a means test for eligibility, or seek to restrict the scholarship to students who pursue specified courses of study.

“The first priority was to keep the program whole,” he said. “And really there are two schools of thought in this building and I don’t think there is consensus yet so we will participate in that conversation.”

Sen. Joe Hardy, R-Boulder City, said he is seeking a requirement that high school students perform community service in addition to the GPA requirement to qualify for the scholarship.

“It would teach them the concept of service, get them out into the community and make them more well-rounded persons,” he said. “They would network with people, do good things and have a better resume.”

Sen. James Settelmeyer, R-Gardnerville, said his proposal would require eligible Millennium scholars to first fill out a federal financial aid form. Students eligible for federal aid or private sector scholarships would then use those funds first, offsetting the need for the Millennium scholarship awards.

“We have the potential to make the Millennium scholarship last longer if eligible students take advantage of other sources of funding first,” he said.

If a student was ineligible for other funding, there would be no restriction on the use of the Millennium Scholarship in his proposed legislation, Settelmeyer said.

Probably the most restrictive of the measures sought so far comes from Sen. Ben Kieckhefer, R-Reno, who said he will introduce a bill to limit eligibility for the scholarship to students who pursue specified courses of study.

“It makes sense to reform the program to make it more tailored to our areas of special need,” he said. “It would be a good incentive to lure new people into education as a way to help fund the education training that we need for new teachers.”

Courses of study critical to Nevada’s economic development would also be part of his proposal, which remains a work in progress, Kieckhefer said.

“As our needs change as a state in creating new jobs, we want to have the educated workforce to fill those areas of need,” he said. “If we can leverage something like the Millennium scholarship to ensure that people are trained to fill those jobs, I think that makes sense.

“It is a subject area test, not a means test,” Kieckhefer said.

Sen. Steven Horsford, D-Las Vegas, chairman of the Senate Finance Committee, said the purpose of the committee bill draft is to extend the life of the scholarship.

“I was very pleased that the governor announced $10 million in his budget for that and hope that we will be able to sustain that throughout the budget process so we can extend the life of the program because it is important to the students of the state,” he said.

Horsford said he would not support a change to the program based on financial need.

“I think that the merit based emphasis based on GPA is important to preserve,” he said.

While a separate issue, Horsford said that if student fees are increased in the coming two years as expected, it will be important to ensure there is financial aid available to those in need.

The scholarship currently provides about $25 million per year to Nevada high school graduates who attend a Nevada institution of higher learning. Initial eligibility requirements include graduating from a Nevada high school with a minimum 3.25 grade point average.

About 8,000 high school graduates per year are eligible to receive a millennium scholarship, of which about 60 percent choose to activate their award.

The scholarship ranges from $40 to $80 per college credit hour depending on the college attended. The scholarship limit is $10,000.

The scholarship is named after the late Gov. Kenny Guinn, who established it during his first term as governor.

Audio clips:

Sandoval Senior Adviser Dale Erquiaga says the governor is open to possible changes to Millennium Scholarship eligibility:

012711Erquiaga :22 the program alive.”

State Sen. Ben Kieckhefer says it makes sense to tailor the program to Nevada’s specific needs:

012711Kieckhefer1 :08 of special need.”

Kieckhefer says teaching and areas of study relating to economic development should be the focus of the scholarship:

012711Kieckhefer2 :11 of economic development.”

Kieckhefer says leveraging the scholarship to help develop an educated workforce makes sense:

012711Kieckhefer3 :15 that makes sense.”

Sen. Steven Horsford says the scholarship is important to Nevada’s high school graduates:

012711Horsford1 :14 of the state.”

Horsford says he does not favor a means test for the scholarship:

012711Horsford2 :05 important to preserve.”

Nevada Pushes Ahead To Implement ‘Unconstitutional’ Health Care Reform

By Andrew Doughman | 4:00 am January 27th, 2011

CARSON CITY – It’s a rare occurrence that a governor calls a federal law “unconstitutional” one minute and advocates implementing that same law a minute later.

But that’s what happened earlier this week when Gov. Brian Sandoval called for Nevada to move forward with creating the Nevada Health Insurance Exchange, one of the mandates under the Obama administration’s 2010 health care bill.

“I firmly believe that many aspects of the law are unconstitutional, and I will continue to fight to have them overturned,” he said during his State of the State address, alluding to his support of Nevada’s lawsuit to overturn the federal law. “In the meantime, however, the law imposes many deadlines, and we cannot wait until litigation is resolved.”

The Patient Protection and Affordable Care Act‘s first deadline requires states to establish a health care exchange, which is basically a one-stop shop for purchasing health insurance.

“A lot of people will come to us through the exchange,” said Chuck Duarte, the Department of Health and Human Services administrator overseeing the team crafting Nevada’s exchange. “What we hope happens is that the exchange becomes the primary portal, the primary shopping experience.”

Duarte said earlier this month that it will be like Travelocity.

Sen. Steven Horsford, D-Las Vegas, said during a budget hearing today that he “would have picked Expedia,” noting that it is a Nevada-based company and evoking laughs around the room.

To use the exchanges, Nevadans would provide relevant data to the state, and the software behind the health care exchange would find that person’s best options for health care insurance coverage. It’s similar to how someone can enter departure and arrival dates and times, preferred airlines and price ranges at sites like Expedia and Travelocity to find the best deal.

The governor is pushing ahead with a $500,000 general fund request to create the exchange. That’s on top of a $1 million federal granted awarded to Nevada this past summer.

If the state cannot submit a comprehensive plan by Jan. 1, 2013, the federal government steps in and creates the exchange for Nevada.

The law mandates that the exchange needs to be up and running by 2014.

These two deadlines leave this upcoming legislative session as the window during which lawmakers will most likely approve the creation of the exchange.

Substantial challenges face the implementation team as they hurry to meet the deadline.

First of all, the state needs to create the back-end computer programs for the exchange.

They will also need to find funding for the exchange, which must be self-sustaining by 2014.

Finally, the state basically has to set up a business. State officials will need to decide who runs the shop and how big the shop needs to be.

“It needs to be nimble,” Duarte said. “It can’t be hampered with a lot of excessive regulatory, civil service requirements. … It needs to be structured more like a private, business enterprise.”

To that end, Nevada has two options. Sandoval could ask for the creation of a new state agency or a new division within an existing agency for the sole purpose of administering the exchange. Otherwise, the government could create a not-for-profit, quasi-state agency that would run the exchange.

But once the structure is set up, its leaders will have to decide how big the shop needs to be.

“We don’t know if this is going to be the size of a bread box or a freight train,” Duarte said.

Duarte’s team can use the federal law’s implementation schedule as a rough guideline for demand. In 2014, the controversial individual mandate begins to impose penalties for being uninsured. That same year, the law will expand Medicaid coverage.

Still, how many people will coming running to the health exchange come Jan.1, 2014 is anybody’s guess.

Of course, some would argue that the question is moot.

Las Vegas attorney Mark Hutchison joined other states in a lawsuit against the health care law under former Gov. Jim Gibbons. Now he has Sandoval’s blessings.

That case is still working its way through the Florida court system. Twenty-six states have joined in the lawsuit.

The courts may rule that the law is indeed unconstitutional, but for now Nevada is pushing forward to meet implementation deadlines.

“Nevada will comply with the law until it isn’t the law,” said Mike Willden, director of the state’s Department of Health and Human Services.

Officials from the agency will host four public meetings Wednesday, Feb. 2, in Carson City, Las Vegas, Elko and Reno to both inform citizens about the exchanges and to elicit response regarding how best to structure to exchange.

More information about the meetings is here.

State Senate Majority Leader Questions High Cost Of New State Medicaid Contract

By Sean Whaley | 2:00 am January 27th, 2011

CARSON CITY – A lawmaker today questioned whether state officials did everything possible to negotiate the lowest cost for a recently approved $177 million Medicaid contract.

Sen. Steven Horsford, D-Las Vegas, asked Medicaid program Administrator Charles Duarte if the contract with HP Enterprise Services reflects a 10 percent reduction in the cost of state contracts sought by lawmakers to help address Nevada’s current fiscal crisis.

“There’s nothing we could do with this contract to reduce the amount that they are getting paid in order to use some of those proceeds to cover these . . . provider rates and services that are being impacted?” Horsford asked.

The state Medicaid budget proposes to continue or implement new reimbursement rate reductions to a variety of medical providers as part of Gov. Brian Sandoval’s plan to balance the state general fund budget. Those reductions would total nearly $60 million.

Horsford cited some of the wage rates for employees in the contract, such as $85 an hour for a business analyst, $105 an hour for a senior business analyst, a certified project manager for $135 an hour, clerical at $40 an hour and $160 an hour for a system administrator.

“To me those seem like excessive amounts for that contractor to be billing the state compared to, as you indicate, your own qualified staff who may be able to do some of this,” he said. “I know we need a contractor and I know there are a lot of benefits to having this contract in place.

“My concern is whether we have achieved every possible cost savings in issuing that contract and if that contractor is billing us reasonable amounts and that there is a checks and balance, an accountability, for what is being billed,” Horsford said.

Duarte said: “I don’t believe the rates are unreasonable and I don’t believe we have the capacity in the state nor in my agency to do the work that is being proposed here. This is highly technical work that is being done on very complex systems.”

Duarte said the agency would be happy to discuss the rates and other issues in more detail in future legislative budget subcommittee hearings.

He did say the contract came in as a budget neutral project.

That comment provoked a sharp response from Horsford, however, who said the intent was to reduce contract costs.

“That is not it, Mr. Duarte,” he said. “That is not the intent.”

“I understand,” Duarte replied.

Charles Perry, president of the Nevada Health Care Association, told the legislative budget panel that the skilled nursing homes he represents are one segment of the health care provider profession that will be seriously affected by the rate decreases recommended in Sandoval’s budget.

He testified that the industry would have extreme difficulty in providing care with the proposed reduction of $20 a patient day for Medicaid recipients.

“We’ve learned how to deal with less for an awful long time,” Perry said. “I’m not sure we can continue to do it.”

Four firms bid on the Medicaid contract. HP’s base bid was about $140 million, while the second lowest bidder came in at $179 million. The contract negotiation process with HP resulted in the final $177 million contact, which covers a five-year period.

Duarte said the contract for the company to manage the state’s Medicaid information system, including the processing of payments to medical providers, provides the amount the state can pay to the firm, not the amount that must be paid.

Audio clips:

Sen. Steven Horsford questions whether every effort has been made to reduce the contract costs:

012611Horsford1 :15 is being billed.”

Horsford says the contract costs seem excessive:

012611Horsford2 :12 some of this.”

Horsford challenges Medicaid administrator Charles Duarte:

012611Horsford3 :02 not the intent.”

Medicaid Administrator Charles Duarte says contract costs are reasonable:

012611Duarte :14 very complex systems.”

Children Who Cannot Pass Reading Test Would Be Held Back Under Sandoval Proposal

By Andrew Doughman | 3:37 pm January 26th, 2011

CARSON CITY – Third-graders who cannot read at a third-grade level would not advance to fourth grade under a proposal from Gov. Brian Sandoval.

The assertion rests on common-sense logic, and Sandoval has been promoting his idea since he was on the campaign trail.

It’s simple – until third grade, we learn to read. After that, we read to learn,” he said during his State of the State address earlier this week. “Most kids who start behind, stay behind. It has to stop.”

Simple enough. The complicated part, though, will be funding remediation programs or paying for students to re-take the third grade. The governor is already proposing 10 percent cuts to K-12 education and districts are warning of million dollar deficits.

Both state Superintendent of Public Instruction Keith Rheault and Assemblyman David Bobzien, D-Reno, have said the idea is a good one, but have held further endorsement until the governor shows them the money.

Other Democrats have warned that the proposal comes at a bad time.

Assemblywoman Debbie Smith, D-Sparks, has already criticized Sandoval’s proposal. Although she isn’t against the proposal, she said it’s unjust to first reduce funding for full-day kindergarten, class-size reduction and early learning programs and then expect third-graders to pass a reading exam.

Sandoval plans to introduce a bill to the Legislature that would establish a minimum score on an existing reading test administered to all third graders. Pass and you’re on to the fourth grade. Fail and you’re in for a do-over or at least some kind of remediation like summer school.

This would end the practice called social promotion whereby students automatically go to the next grade regardless of whether they perform at grade level.

Right now, school districts use a hodgepodge of ways to educate under-performing children, said Rheault. These range from small group sessions to individual attention both during school and after school.

Like many programs, though, these remediation programs either aren’t funded or have been eliminated.

The governor’s proposal to end social promotion is still sketchy. The governor’s staff have determined neither a funding source nor the level for a “fail” or “pass” grade.

The state currently provides a base level of funding for all students. Should a third-grader fail the reading exam, the state would either have to pay for that student to repeat the third grade or pay for other remediation programs.

The governor, however, contends that Nevada has to start somewhere in fixing its schools. Part of that, he says, is to establish statewide standards such as this.

At the same time, the governor wants to allow school districts flexibility in how they manage class-size reduction, full-day kindergarten and other programs.

How you deliver the education is up to the school districts,” said Dale Erquiaga, the governor’s senior adviser. “We’re not going to tell them how to teach.”

Instead, Erquiaga said, the governor will set standards and give districts leeway in how to meet those standards.

Beyond the funding, the debate over whether ending “social promotion” works is still up in the air.

Rheault said that some research suggests children are more likely to drop out later when they’re held back and separated from children their age.

Other evidence appears to refute this.

In Florida, former Gov. Jeb Bush ended social promotion during 2002. Today, literacy levels for Florida’s schoolchildren have dramatically increased. Bush has taken his reforms on the road through his education reform group, Foundation for Excellence in Education.

Here in Nevada, Sandoval is using the Florida model to craft his bill.

Around the United States, the massive New York City school district has done away with social promotion. Bills in various Legislatures around the country would also eliminate it. In New Mexico, Gov. Susana Martinez addressed ending social promotion in her State of the State address as well.

Freshman Congressman Heck Introduces First Bill

By Elizabeth Crum | 2:44 pm January 26th, 2011

Today, newly elected Congressman Joe Heck introduced legislation to further allocate and expand the availability of hydroelectric power generated at Hoover Dam.

This bill would allocate Hoover power beginning in 2017 for a period of 50 years. Entities receiving power in present-day Schedules A and B still would continue to receive Hoover power.

In addition, each of the existing Hoover contractors would contribute 5% of their power to a pool that would be distributed under a new Schedule D. Schedule D power would be set aside for federally-recognized Indian Tribes, irrigation districts, rural electric cooperatives, military installations and other eligible entities.

“Certainty about the future is what our economy needs right now in order to get people back to work,” said Heck. “This bipartisan bill ensures Nevada’s businesses and individuals have a reliable and clean energy source for years to come.”

Heck also gave credit to Congresswoman Napolitano and her staff for the work they put into this same legislation last year.

The Boulder Canyon Project Act of 1928 authorized the construction of what is now called Hoover Dam and allocated power to an original pool of customers which included public and private entities in the lower Colorado Basin states of Arizona, Nevada, and California.

The original contracts for power were executed in 1937 and were valid for a 50-year time period. As the original contracts were set to expire, Congress reviewed the original act and provided guidance on the revised allocation of Hoover Dam power through the Hoover Power Plant Act of 1984 (HPPA).

Republican Accuses Democrats Of Being “Rude” To Governor’s Chief Of Staff

By Andrew Doughman | 10:33 am January 26th, 2011

CARSON CITY — Sen. Barbara Cegavske accused Democratic legislators of rudeness during today’s budget hearing.

Following confusions yesterday regarding the depth of Gov. Brian Sandoval’s proposed cuts, the Clark County Republican wanted to “apologize” on behalf of the committee to the governor’s Chief of Staff Heidi Gansert.

“I really felt that this body was rude to Ms. Gansert,” she said after yesterday’s jabs came up again during today’s hearing. “I would hope that with the new members that we have in our Legislature, that we would be able to show them a demeanor of working together.”

Gansert and the governor’s Budget Director Andrew Clinger presented the governor’s budget to a legislative budget committee yesterday. Democrats on the committee took both Gansert and Clinger through a sustained back-and-forth over a number of the governor’ proposals that included about 9 and 17 percent cuts to K-12 and higher-ed funding.

Sen. Steven Horsford, D-Las Vegas, is chair of the committee and was one of the legislators who grilled the governor’s representatives over the proposed budget.

“I know this comment may not be directed at me, but I know I was the primary person digging yesterday, so I will not allow comments by my colleague to go unanswered,” he said. “To suggest that, to ask delving questions of representatives of his office about his state budget is somehow rude, I disagree respectfully with to my colleague.”

He continued, saying that both Clinger and Gansert were doing their jobs admirably.

Gansert had served as a Assemblywoman of the Legislature as recently as last year’s 2010 special session.

“I do not apologize for being a proponent of public education,” Horsford said. “I will continue to ask any and every question that I feel needs to be brought forward because that was what I was elected to do.”

Horsford concluded his remarks, followed by a silence during which no other legislators chimed in.

“Okay, let’s move on,” said Assemblywoman Debbie Smith, D-Sparks, who co-chairs the committee with Horsford.

Nevada Officials Pleased With Sandoval’s Funding Of Millennium Scholarship

By Sean Whaley | 1:11 pm January 25th, 2011

CARSON CITY – State officials said today they are pleased that Gov. Brian Sandoval has proposed continuing the Guinn Millennium Scholarship program in his budget, including a one-time infusion of $10 million from the general fund to keep it solvent through 2016.

“I was pleased to see that,” said Senate Majority Leader Steven Horsford, D-Las Vegas, in a budget hearing today.

Sandoval received a standing ovation during his State of the State speech Monday when he said the scholarship, named after the late Gov. Kenny Guinn, is continued in his budget. The program has been in jeopardy because of budget cuts and revenue shortfalls. Guinn established the scholarship during his first term as governor.

The Legislature must still approve the funding when the 2011 session convenes Feb. 7.

State Treasurer Kate Marshall, whose office manages the scholarship funds, also expressed appreciation to Sandoval for his support of the program.

In addition to the $10 million general fund contribution, the scholarship will continue to receive funding from Nevada’s tobacco settlement agreement, as well as a $7.6 million transfer each year from the treasurer’s Unclaimed Property Division.

The decision to continue the scholarship, “is a welcome message to students and parents across the state of Nevada,” Marshall said. “My office continues to receive many inquiries about the future of the Gov. Guinn Millennium Scholarship program from students, parents, and high school counselors concerned about the opportunity to utilize the program’s benefits in upcoming years.”

The program has been used by more than 60,000 Nevada high school graduates who have met the eligibility criteria. Currently, there are approximately 21,000 students receiving millennium scholarship benefits. Since its inception, over 22,000 millennium scholars have earned a degree from a Nevada institution of higher learning.

The Legislature’s Interim Finance Committee infused the scholarship with College Savings Plans program funds last year to keep it solvent through this school year, but its future was in doubt due in part to lower amounts of funding coming from the tobacco settlement agreement. The annual tobacco payment to Nevada is declining mostly because people are smoking less.

The scholarship currently provides around $25 million per year to Nevada high school graduates who attend a Nevada institution of higher learning. Initial eligibility requirements include graduating from a Nevada high school with a minimum 3.25 grade point average.

About 8,000 high school graduates per year are eligible to receive a millennium scholarship, of which about 60 percent choose to activate their award.

The Nevada System of Higher Education (NSHE) says the scholarship covers about 56 percent of a student’s tuition costs at a Nevada university.

Kicking Cans And Shifting Buckets: Dems Grill Gov’s Proposed Budget

By Andrew Doughman | 11:45 am January 25th, 2011

CARSON CITY – Democrats grilled the governor’s budget director during a hearing following the release of Gov. Brian Sandoval’s proposed budget yesterday.

Senate Majority Leader Steven Horsford, D-Las Vegas, accused the governor of stifling job creation by “robbing” $44 million out of the state’s highway fund.

The governor’s proposed budget would divert $44 million from the highway fund to two state operating funds.

Horsford said that the money the governor proposes to transfer could be bonded against, which could create infrastructure jobs.

Budget Director Andrew Clinger replied that the state’s highway fund had met its target fund base of $100 million at the end of this past year, and that it too had taken reductions along with other portions of the budget.

[Those reductions] total $35 million. There was the dispatch center in Reno … as well as a new plane for the state for $7 million,” he said.

Why someone would recommend doing a new plane in this state’s economy, whatever,” Horsford said.

Right, so those were items that were …” Clinger said.

On your part to not even bring that…” Horsford said.

So those were items that were eliminated in their budget that offset some of this need,” Clinger said.

The confrontational tenor of the debate continued with Clinger on the defensive. He faced a committee of 21 legislators, flanked to his left by Heidi Gansert, the governor’s chief of staff.

As he delivered an electronic presentation of the intricacies of the budget, what he called “re-allocations” and “transfers” quickly became “shifting buckets” and “kicking the can” in the words of legislators.

Democrats did most of the questioning. They interrogated the budget director on the governor’s proposals to get money up-front from insurance premium tax collections. The state would have to pay this money back later, with interest.

Later, legislators asked Clinger why local property taxes from only Washoe and Clark counties should help support UNLV and UNR. What followed was a debate about whether and how much the universities had a statewide impact.

About an hour and a half into the hearing, Horsford again spoke up.

“We want to keep a nice cooperative tone so we’re not going to become argumentative,” he said. “We disagree on this particular revenue source … I don’t want to get into that dispute with you right now.”

Thank you, mister chairman,” Clinger replied.