Posts Tagged ‘budget’

Gov. Sandoval Releases Expanded Budget Data

By Sean Whaley | 5:11 pm December 14th, 2012

CARSON CITY – Gov. Brian Sandoval today released budget data that had been sought by state lawmakers after a weeks-long disagreement over whether the information was public.

The state Budget Office posted the “items for special consideration” data on its website at noon. The items are requests made to Sandoval by state agencies for spending over and above their base-budget submissions. The base budget data was released by the Sandoval administration in October.

Gov. Brian Sandoval.

Included in the requests is a proposal to expand the Medicaid program to a new group of Nevada residents as provided for under the Affordable Care Act. As first reported by The Associated Press, Sandoval announced on Tuesday that he will propose expanding the program to provide health care coverage to 87,000 Nevadans, the cost of which will initially be paid for by the federal government. The 2013 Legislature will consider the recommendation.

Sandoval initially did not provide the additional budget information to the Legislature when it was expected on Oct. 15.

The decision prompted members of the Legislature’s Interim Finance Committee in late October to question state Budget Director Jeff Mohlenkamp about the decision.

Legislative Counsel Bureau Director Rick Combs told lawmakers that the information has been provided to lawmakers by past governors.

Mohlenkamp said the base budget data provided to the Legislature met the requirement of the state law on budget disclosure and Sandoval also defended the decision.

“There is no violation of law,” Sandoval said in October. “We’re perfectly consistent and in accordance with Nevada state law.”

The budget dispute was first reported by the Nevada News Bureau. The Las Vegas Sun also reported on the impasse earlier this month, which led to several calls in the media and by others for Sandoval to release the data.

Sandoval then announced last week he would release the budget data this week, which happened today.

Given the limited amount of state tax revenues, many of the special consideration items are not likely to see funding in Sandoval’s 2013-15 budget, which will be released next month ahead of the start of the Feb. 4 legislative session.

Many of the requests are for new positions. A total of just over 518 positions are in the agency wish lists for the first fiscal year, with about another 100 proposed to be added in the second year.

But there are other types of requests, such as the $20 million being sought from the general fund by the Governor’s Office of Economic Development to provide more money for the Catalyst Fund, which will be used to attract new businesses to the state. The Legislature created the fund in 2011 and appropriated $10 million for its operation in the current budget.

The total requests from the general fund by the various agencies total $419 million.

The Nevada Policy Research Institute congratulated Sandoval on releasing the budget information, but said the requests should be ignored because they are meaningless.

“That’s because they assume that every government agency should be given a substantial funding increase through costs – including pay increases – that automatically roll up,” said NPRI Deputy Policy Director Geoffrey Lawrence. “This outdated and broken budgeting process, commonly referred to as ‘baseline budgeting,’ failed to exact any accountability over the use of public resources.”

The adoption by the 2011 Legislature of a new process, called performance-based budgeting, which was advocated by NPRI, among others, will ensure the state’s highest priorities are funded, he said.


Dispute Emerges Between Sandoval, Lawmakers Over Access To Budget Data

By Sean Whaley | 5:23 pm October 25th, 2012

CARSON CITY – A dispute has emerged between Gov. Brian Sandoval and the Legislature over what information in the initial state agency request budget should be made available to legislative staff and the public.

At a meeting of the Legislature’s Interim Finance Committee today, state Budget Director Jeff Mohlenkamp was asked about what is considered by legislative staff to be a departure from past practice regarding the budget information provided to legislative fiscal staff and the public.

The 2013-15 budget information conveyed to the Legislature on Oct. 15 does not include “items for special consideration” requested by state agencies. These items are budget requests from agencies that Sandoval will consider including in his final spending plan, but that have not yet been approved for inclusion by Sandoval.

Sandoval’s budget won’t be made public until mid-January.

Rick Combs, director of the Legislative Counsel Bureau, said this information has been provided to legislative staff historically as specified in state law. It has also been made available to the public.

LCB Director Rick Combs.

An example of an item of special consideration is the expansion of the Medicaid program to a new group of Nevadans as provided for in the federal Affordable Care Act. Sandoval has not made a decision on whether to expand Medicaid to this new group of Nevada residents.

Because of this apparently new interpretation by Sandoval, the Medicaid expansion information has not been provided to the Legislature’s fiscal staff and so is not available to the public either.

“The part that is of concern to us there is twofold,” Combs told the committee. “Your staff doesn’t have access to the information. The other concern is that information that is provided to us on Oct. 15 is supposed to be open for public dissemination at that point.

“Now if you, or a member of the public, asks us for anything that was in an item for special consideration, we don’t have it,” he said. “Even though we feel the statute requires that that to be available to you or a member of the public that ask for it.”

Combs said his staff  has asked for the information but has not received a response from Mohlenkamp.

IFC Chairwoman and Assemblywoman Debbie Smith, D-Sparks, asked Mohlenkamp for an explanation.

Mohlenkamp said a decision has not been made yet on whether to provide the information to legislative staff, and that the budget information transmitted to lawmakers has fulfilled the statutory obligation to lawmakers.

“We’re still considering whether we will be able to provide access to LCB fiscal,” he said. “That decision hasn’t been made. I’ve been in coordination with the governor’s office on this and I’m hopeful that we will be able to give a firm and final response in the near future. But right now that decision hasn’t been made.”

Mohlenkamp said there are all kinds of agency requests beyond Sandoval’s flat-budget guidelines that may not end up as part of the budget, and so should not be subject to speculation.

The change is significant enough that Geoff Dornan, the long-time capital bureau reporter for the Nevada Appeal, made a rare public comment at the meeting.

“We have always gotten the items for special consideration,” he said. “This change completely changes how the law has been interpreted, for longer than Mr. Mohlenkamp, no offense, has been working for the state.”

Sen. Ben Kieckhefer, R-Reno, also expressed concern, saying that if Sandoval decides not to propose expanding Medicaid to the new eligible population, then the budget data collected to provide background on this item of special consideration might never be provided to lawmakers or the public.

Kieckhefer said he would have a problem if that information was never made public.

Mohlenkamp said the Sandoval administration has not yet decided whether that information would be made public at some point.


Audio clips:

LCB Director Rick Combs says the lack of budget data creates two concerns:

102512Combs1 :13 at that point.”

Combs says the LCB fiscal staff cannot provide information to lawmakers about the special budget requests because it does not have the information:

102512Combs2 :16 asks for it.”

Nevada Appeal reporter Geoff Dornan says the budget information should be made public:

102512Dornan :33 capital press corps.”

State Budget Director Jeff Mohlenkamp says  a decision has not been made on whether to provide the information to legislative staff:

102512Mohlenkamp :21 hasn’t been made.”




Nevada State Administrators Get Budget Details In All-Day Planning Session

By Sean Whaley | 3:28 pm March 15th, 2012

CARSON CITY – Nevada’s top state administrators gathered together in meeting rooms and via the internet today to hear first-hand about Gov. Brian Sandoval’s initial plans for his 2013-15 budget.

The all-day meeting called “Budget Kickoff” was intended to provide instructions to state administrators on how to begin preparing their spending plans for the new two-year budget that will take effect on July 1, 2013.

State administrators were briefed today on the 2013-15 budget plan. / Photo: Nevada News Bureau.

Agencies are expected to see flat budgets compared to the current spending plan after Sandoval surprised many around the state on Tuesday by announcing he would extend an expiring package of tax increases into the next budget cycle to avoid any further cuts to education and critical social services.

In announcing his intentions, Sandoval said: “I’m not going to pit kindergartners against senior citizens. I’m not going to pit higher ed students against people that need essential services.”

Agencies are also being directed to prepare their spending proposals using the new Priorities and Performance Based Budgeting process required as a result of legislation approved in the 2011 legislative session.

While the next budget won’t take effect for more than 15 months, the planning process begins early. Sandoval must submit his proposed budget to the Legislature by January 2013 in advance of the February 2013 legislative session.

“You know how difficult the last couple of sessions have been, and you understand the depth and the breadth of the cuts to state spending,” said Heidi Gansert, Sandoval’s chief of staff, in introductory remarks to the assembled administrators. “You’ve also heard about the positive economic news in recent months. Sales tax collections are up. Gaming revenues are improving. Unemployment is slowly declining. All signs that Nevada’s economy is turning the corner.”

But Medicaid caseloads have tripled over the past decade and new costs are looming due to mandates from the federal health care law, she said. The ballot proposals being circulated to raise taxes are not an option as far as Sandoval is concerned, Gansert said.

By continuing the sunsetting taxes, no Nevadans will pay any more in taxes in the next budget than they are now, she said.

“The governor has said we will grow our way out of this recession and we will, it’s just going to take more time,” Gansert said.

She had some good news for state employees, noting that the unpaid furloughs, 2.5 percent salary reductions, frozen merit pay increases and the elimination of longevity pay are all under review for the next budget for restoration if possible.

Janet Rogers, an economist with the Budget Division, said the national economy is improving, but slowly, and Nevada is lagging behind.

State Budget Office economist Janet Rogers talks about the economy as Budget Director Jeff Mohlenkamp looks on. / Photo: Nevada News Bureau.

“In the train that represents the national economy, Nevada is the caboose,” she said. “During the recession, for those of you who have been here, know, we had the largest employment drop of any state, the highest unemployment rate, the highest foreclosure rate and we were the last state to enter the recovery.”

State Budget Director Jeff Mohlenkamp talked about the potential impacts of the health care reform law, saying it will have a significant effect on the state’s Medicaid population.

The federal government is expected to pick up the costs of Medicaid recipients eligible under the law, but an influx of enrollees among residents who are already eligible for the health insurance program for low income, disabled and senior citizens is also expected, and these costs will have to be covered in part by the state, he said.

Nevada’s Medicaid caseload has increased from an average of 117,627 recipients in fiscal year 2001 to 285,732 in fiscal year 2011.

“Now the overall impacts of the health care reform aren’t clear,” Mohlenkamp said. “We don’t know what the number is going to be but we do know it’s significant, and we’ve done some broad estimations in our budget preparation.”


Audio clips:

Sandoval Chief of Staff Heidi Gansert says the Nevada economy is improving:

031512Gansert1 :23 turning the corner.”

But Gansert says it will take more time to grow out of the recession:

031512Gansert2 :06 take more time.”

Budget Office economist Janet Rogers calls Nevada the caboose on the national economic recovery train:

031512Rogers :22 enter the recovery.”

State Budget Director Jeff Mohlenkamp says the new health care law will have big impacts on Nevada’s Medicaid program:

031512Mohlenkamp :11 our budget preparation.”



Ron Paul’s Big Announcement: Big Cuts to Big Government

By Elizabeth Crum | 5:03 pm October 17th, 2011

America’s favorite libertarian Texas congressman is proposing nearly $4 trillion in cuts and a fully balanced budget during his first term as president.

Ron Paul addresses supporters and press at The Venetian

In what was hyped as a “major announcement”, Ron Paul today introduced a plan to slash the national deficit and abolish entire departments of the federal government. The thrust of the proposal is what Paul describes as “constitutionally-limited, smaller-government”.

Some highlights of Paul’s “Plan to Restore America“:

  • Cuts $902 billion in spending during the first year of the Paul presidency (compared to current spending levels)
  • Eliminates five federal departments:  Education, Energy, Housing and Urban Development, Commerce, Interior
  • Lowers the corporate tax rate to 15 percent
  • Makes a 10 percent reduction in the federal workforce
  • Eliminates all U.S. foreign aid
  • Allows younger citizens to opt out of Social Security
  • Converts the federal Medicaid program and other social programs into block-grants distributed to states

“A lot of people will say, ‘Cutting a trillion dollars in one year? That sounds radical,’” Paul said to a crowd of approximately 240 (plus staffers) at The Venetian resort in Las Vegas. “I operate on the assumption that the radicals have been in charge way too long.”

Paul emphasized that his plan does not cut from veterans’ programs and defense. As in previous appearances, he drew distinctions between military spending on foreign wars and “true” defense spending to protect the U.S. homeland from attacks.

“The other candidates have not offered this,” Paul said of his plan. “I don’t believe they think it’s very serious. They think they can just tinker around the edges, but the American people are ready for some honest thinking and some honest reforms.”

When asked how he can win the hearts and minds of neo-conservatives and defense hawks who believe America’s present foreign military operations are worthy, Paul quipped, “Being a conservative used to mean not spending money.”

Paul went on to explain that he thinks there has been “a change” in the American outlook on the effort in Afghanistan and elsewhere due to the approximately four billion spent on foreign wars in the past decade.



Online Sales Increasingly Cutting Into Tax Dollars, Says Retailers’ Group

By Anne Knowles | 2:00 pm September 1st, 2011

Nevada could take in $16 million less in tax dollars this year due to online sales, according to a new report by the Retail Association of Nevada (RAN).

Sales tax currently accounts for 28.3 percent of the state’s general fund revenue while gaming taxes bring in 23.6 percent. Nevada ranks 11th in the nation in terms of sales tax reliance, according to a Congressional Research Service report, while the state’s maximum sales tax rate, 8.1 percent in Clark County, ranks 20th.

According to RAN, internet sales means Nevada will lose upwards of $16 million in 2011, with other reports estimating as much $100 million lost annually. The Economic Forum forecasts the state will collect about $815.3 million in sales and use tax in 2011.

“As e-commerce becomes increasingly popular, Nevada faces ever greater sales and use tax revenue losses,” said Mary Lau, RAN president, in a statement on the findings. “Current estimates may only predict losses equivalent to 0.5 percent of total sales and use tax collections, but the impacts are certain to grow larger with time.”

Technically, buyers are supposed to pay a use tax with the state for purchases made online, but many consumers are either not aware of the tax or rarely pay it and is almost impossible for the tax department to monitor.

“It’s an odd tax, because the costs of compliance are actually higher than the costs of evasion,” said Geoff Lawrence, deputy director of policy at Nevada Policy Research Institute in Las Vegas.  “One alternative could be to require online retailers to email shoppers at the end of each year with their total purchase amount throughout the year and informing them of their total use tax liability, directing them to remit the use tax directly to the Nevada Department of Taxation.  An alternative like this would get around many problems while still protecting the privacy of individuals.”

Lawrence said states have no authority to collect sales tax from entities that have no physical presence in the state.

A bill amendment to tax online retailers failed during the 2011 Nevada legislative session.

Nevada is a member of the Streamlined Sales Tax Governing Board, a national effort to reduce the complexity of sales tax compliance so online retailers could be required to charge state sales on their goods sold.


Lawmakers, State Agencies Argue Over Budget Compliance

By Anne Knowles | 7:04 pm August 31st, 2011

Nevada lawmakers today approved money to cover the costs of the upcoming special election, received an update on the progress of the state’s health care insurance exchange and complained repeatedly that state agencies were thumbing their noses at the legislative process.

Sen. Sheila Leslie, D-Reno, saw passage of her bill regulating the use of leg hold traps./Nevada News Bureau file photo

The Interim Finance Committee approved more than 100 requests for funds from nearly every state agency, but reprimanded a handful who legislators said were not adhering to budgets passed during the last legislative session.

“This is some of the most blatant disregard of legislative intent that I’ve ever seen,” said Sen. Sheila Leslie, D-Reno. “I hope this doesn’t continue this interim. I know these are tough times, but we must follow the law.”

Assemblywoman Debbie Smith, D-Sparks, the committee chair, also voiced concern several times that issues before the committee should have been resolved during the budgeting process.

When about $33,000 was requested to hire a consultant to help the Nevada Department of Transportation track the state’s inventory of vacant lands in compliance with Assembly Bill 404, Smith asked Paul Saucedo, NDOT chief right-of-way agent, why NDOT had not submitted a fiscal note delineating the need for that money with the bill.

Smith then almost tabled a request from the Department of Tourism and Cultural Affairs (DTCA) because it was found that the department is now using a contract worker to do the work of a job eliminated when the budgets were approved by the legislature.

“This is a budget discussion and should have taken place then,” said Smith.

In the end, the DTCA request for $84,616 in federal National Endowment for the Arts money was approved because the agency would miss a deadline to request the federal grant money if the request was pushed to the committee’s next meeting.

“Let’s move it ahead so as not to lose the federal money,” said Assemblyman Pete Goicoechea, R-Eureka. “In the meantime, staff can work with them on this contract employee. We may pay $8,000 for a few months of the employee, but that’s better than losing $84,000.”

The committee was also concerned about a request to transfer about $4.5 million from the budget for the University of Nevada, Reno (UNR) to the University of Nevada School of Medicine budget. The university’s goal was to keep the school of medicine budget cuts to a minimum in order to expand the school’s class sizes from 62 medical students to 100 and expand its nursing class from 98 students to 196, said Mark Johnson, UNR president.

Johnson said higher education had made certain programs a higher priority and was trying to maintain them while eliminating some and making others self supporting.

“We wanted a more fair and equitable approach,” said Sen. Steven Horsford, D-Las Vegas referring to the legislative intent of higher education cuts. “I feel we are going backward by protecting one program at the expense of others.”

Secretary of State Ross Miller / Photo: Nevada News Bureau file photo.

The IFC also approved $539,137 to reimburse counties for costs incurred for the special election in the 2nd congressional district. Secretary of State Ross Miller said counties requested the money since none had budgeted for the special election. He said the money would cover fixed costs and would not be reduced by lower than anticipated turnout.

“This is the minimum amount needed to run it without jeopardizing the integrity of the election,” Miller told the committee.

Miller’s office requested the money from the state’s contingency fund, adding that $6 million the state has in reserve from the federal Help America Vote Act is not intended for special elections.

Lawmakers asked if the some of the money could come from an approximate $340,000 surplus in the Secretary’s office budget. Miller said his office is projecting a deficit, not a surplus and agreed to work with the Legislative Counsel Bureau staff to resolve the discrepancy in the budget projections of his office and the LCB.

The committee also received an update on the Silver State Health Insurance Exchange Nevada is building to meet requirements mandated by the Patient Protection and Affordable Care Act enacted by Congress.

The Department of Health and Human Services has received $1 million from the federal government for planning the exchange. HHS spent $320,000 in fiscal year 2011 and is rolling over the remainder into the next fiscal year. The department requested about $2.6 million of a $4 million establishment grant from the federal government to create a new agency and to fund four new positions – an executive director, operational officer, grants manager and executive assistant.

During the 2013 legislative session, the state will need to decide how to fund the exchange once federal support for it ends in 2015, said Michael Willden, HHS director.

Willden also said he was meeting with Gov. Brian Sandoval’s office later in the day about possible appointments to the board that will oversee the exchange.  The board will consist of five members appointed by the governor, one member appointed by the state Senate majority leader, and one member chosen by the Assembly speaker.

The IFC also approved a subcommittee’s recommendations yesterday to cut or delay several building and maintenance projects due to budget constraints.


Gov. Sandoval Taking Two Pronged Approach To Addressing Potential $656 Million Budget Shortfall

By Sean Whaley | 5:35 pm May 27th, 2011

CARSON CITY – The Sandoval administration is pursuing two paths in an effort to resolve a potentially massive budget shortfall, seeking clarification from the Nevada Supreme Court on the case that created the issue and working with lawmakers on potential additional revenues should they be necessary.

Dale Erquiaga, senior adviser to Gov. Brian Sandoval, briefed a number of interested parties on the developments since the state’s high court dropped the potential budget bombshell on the Legislature yesterday.

“The Supreme Court, in a rather dramatic decision, presented us with a math problem,” he said. “They didn’t present us with a crisis, and they didn’t present us with something insurmountable.”

In a decision rejecting the Legislature’s right to use $62 million from a Southern Nevada water fund to help balance the current budget, the court intimated that as much as $656 million proposed by Sandoval to be used in the upcoming budget could be legally unavailable.

Erquiaga said the first course of action was for Sandoval early this morning to ask Attorney General Catherine Cortez Masto to ask the court to clarify if its decision was narrowly focused on the $62 million clean water fund sweep, or if the decision should be interpreted more broadly to cover other proposed uses of local funds to help balance the governor’s proposed $6.1 billion spending plan.

“Again, did the court mean $62 million, or did the court mean to take the broadest interpretation possible, thus putting at risk an amount ten times that size, and really, forever changing the way we budget in the state of Nevada,” Erquiaga said.

“These revenue mechanisms have been used for anyone’s recent memory here,” he said. “All of the revenue mechanisms that the governor included in his budget except one have been used by prior legislatures. For the court to say you can’t use that kind of money anymore will forever change the way we budget.”

Erquiaga said that if the issue is only the $62 million water fund sweep, the Legislature can move forward with adopting Sandoval’s proposed two-year budget. Sandoval would like the court to act quickly on the clarification request so the Legislature can complete its work by June 6, the constitutionally mandated final day of the session, he said.

On the budgetary front, Sandoval has met with lawmakers from both parties and both houses to discuss the possible continuation of some of the tax increases set to sunset June 30 as a source of new revenue should it be needed to balance the budget, Erquiaga said.

About $679 million could be generated if the taxes were extended another two years. The taxes include a sales tax piece and a higher modified business tax for the state’s largest employers, but Sandoval will not support continuing all of the higher levies, he said.

So if $656 million is needed to balance the budget, Sandoval will look to other revenues, but not new taxes, Erquiaga said.

“If sunsets are called into play, you may be assured that the margin tax and the service tax are not,” he said.

These new taxes were proposed by legislative Democrats in recent weeks as a way to augment the budget.

As part of these tax discussions, Sandoval and Republican lawmakers are seeking a number of policy reforms as part of any such continuation, Erquiaga said.

Some of the reforms being discussed this session include changes to Nevada’s collective bargaining law, the elimination of teacher tenure, and others.

“It is critical to the governor that reforms be included in any final solution,” Erquiaga said.

He would not disclose the specifics of the reforms under discussion.

Charles Blumenthal, communications director for the Assembly Democratic Caucus, said legislative leadership is having productive discussions every day trying to work through the process and get a budget agreement.

Audio clips:

Sandoval Senior Adviser Dale Erquiaga says the Supreme Court presented the governor and Legislature a math problem, not a crisis:

052711Erquiaga4 :10 with something insurmountable.”

Erquiaga says Sandoval wants the court to clarify its intent:

052711Erquiaga1 :14 state of Nevada.”

Erquiaga says the revenue mechanisms used in Sandoval’s budget have been used before:

052711Erquiaga2 :16 way we budget.”

Erquiaga says policy reforms have to be part of any budget solution:

052711Erquiaga3 :05 any final solution.”


Governor Estimates $656 Million Lost In Budget Due To Supreme Court Decision

By Andrew Doughman | 11:54 pm May 26th, 2011

CARSON CITY — The state’s budget just took a $656 million hit, according to members of Gov. Brian Sandoval’s staff.

Following a Supreme Court decision earlier today, the governor convened the press at 11 p.m. to outline his opinion of how the decision effects funding streams used in the state budget.

“The problem is much worse than we thought,” said Dale Erquiaga, the governor’s senior adviser.

Erquiaga, Andrew Clinger and Lucas Folleta, the governor’s budget director and legal counsel respectively, would not speculate as to how they will replace the dollars they assume are lost in the state’s proposed two-year budget.

This morning, the court ruled in the Clean Water Coalition case that the state government could not take $62 million in local revenues to bolster the state budget.

Later this afternoon, Sandoval said he believed the case could have wide-reaching implications for his proposed general fund budget.

“The ruling raises questions about certain assumptions in the proposed executive budget, despite some having been used in the past,” he said in a statement. “As a former federal judge, I am cognizant of the legal issues.  As governor, I am forced to deal with their ramifications and I am responding by reworking the state budget.  I will announce a revised plan on Friday.”

Erquiaga said that the governor has kept legislative leaders appraised of the situation.

Erquiaga also said the governor and his staff plan to work throughout the night to find a solution to replace the lost revenue.

The governor, however, has already announced that he is considering extending taxes that are set to expire June 30. Doing so would bring the state an estimated $712 million, enough to offset the reductions due to the court decision.

In addition to the $62 million, the governor is assuming $594 million in lost revenue.

“The court’s decision forced us with this decision,” Folleta said.

The decision holds that the state cannot siphon money from a local funding stream, thus making the Clean Water Coalition money grab unconstitutional.

The governor’s staff spent the late afternoon and evening evaluating where the money in Sandoval’s budget is coming from and arrived at a “conservative” decision that the court’s ruling could endanger five other revenue sources.

“To take a less conservative approach, if the state were sued, revenue streams will have to be backed out,” Erquiaga said.

In addition to the $62 million lost due to the court’s decision, the governor’s office assumes these revenue sources would be lost if challenged in court:

  • Supplemental account for medical assistance to indigents: $38,427,584

  • Transfer from school districts’ debt service reserves: $247,420,312

  • 4 cent Clark and Washoe counties operating property tax: $52,994,482

  • 2.6 cents in fiscal year 2012 and 2 cents in fiscal year 2013 in Clark and Washoe counties capital projects property tax rate: $30,475,264

  • Room tax dollars: $225,455,400

Gov. Sandoval Rejects New Tax Revenue For Budget, Democrats Keep Hope Alive

By Sean Whaley | 10:00 am May 24th, 2011

CARSON CITY – Gov. Brian Sandoval emerged from a meeting with Republican lawmakers today saying he is not willing to consider extending taxes set to sunset June 30 to provide more money for the two-year state budget.

Sandoval’s pronouncement, combined with a statement released later in the day by Senate Republicans saying they remain in firm opposition to any tax proposals to add money to the budget, put a planned joint money committee meeting to reconsider the two-year spending plan on hold for more than eight hours.

But after a day spent in closed-door negotiations, Democrats held firm to their plan to reduce spending only to levels that would be supported with an extension of the sun-setting taxes. Even so, Democrats ended up about $78 million short of the cuts needed to reach levels that could be supported by the sun-setting taxes.

Among the reductions approved by Democrats when the long-delayed meeting finally got under way were a 2.5 percent cut in school salaries saving nearly $120 million and a reduction in per pupil support saving another $85 million.

The votes on the roll backs in spending were party-line, with Democrats in support and Republicans opposed. Republicans said the reductions were inadequate to conform to Sandoval’s proposed $6.1 billion spending plan.

There is no sign yet Democrats have convinced any GOP lawmakers to join them in extending the sun-setting taxes, which would bring in about $626 million in additional revenue over the two years of the budget that will start July 1.

The budget has to be substantially complete by Friday if lawmakers are to adjourn June 6, the constitutionally-mandated deadline.

“We have had plenty of time to thoughtfully prioritize spending and live within our means,” the Senate Republican statement against any tax increases said. “There is no reason to continue crafting a budget that state revenue cannot support. We should not wait until an unbalanced budget is vetoed; we should pass a balanced one now.”

The statement from GOP senators came as indications were that some Assembly Republicans were considering support for the extension of the tax package set to expire next month. This support would be dependent on significant policy reforms to collective bargaining and on other key issues.

Asked if there was a budget deal after an hour-long meeting with Republicans, Sandoval replied: “Not that I’m aware of.”

Gov. Brian Sandoval emerges from a meeting with Republican lawmakers, remains opposed to extending sun-setting taxes to add more revenue to budget/Photo: Andrew Doughman, Nevada News Bureau

Sandoval said he has submitted a balanced budget and that extending expiring tax revenues is not an option he will accept.

Sandoval said he has discussed with Republicans the idea of using “triggers” whereby tax revenues that come in above projections could be used to increase funding to public education and other areas of the budget.

But Sandoval said he has not had talks with Democrats on the subject.

Senate Minority Leader Mike McGinness, R-Fallon, said triggers are on the table for consideration.

Sen. Ben Kieckhefer, R-Reno, said he believes triggers would be an appropriate method of providing additional funding to core state services.

The idea that triggers based on bigger than anticipated tax revenue collections was bolstered with the release of the statewide taxable sales report for March showed a 9.6 percent increase over March 2010, the largest jump in the economic indicator in several years.

Assembly Ways and Means Chairwoman Debbie Smith, D-Sparks, said she does not believe there is a deal yet on the budget.

“This is the point in the session where passions run high,” she said. “We’ll just take it an hour at a time.”

Assemblyman Paul Aizley, D-Las Vegas, said after the morning caucus meeting: “There have been better meetings. … Either there’s no deal or there’s too many deals.”

Democrats had to cut their previously approved spending recommendations to get close to the amount of revenue that would be generated from a renewal of the sun-setting taxes. Democrats on the money panels had added $968 million more to these areas than existing revenues will cover over the past several weeks.

This requirement caused problems for Democrats within their own caucus however, with some lawmakers balking at any reductions in spending that have already been approved.

Sandoval has asked that lawmakers finish up by the constitutionally-mandated 120-day deadline. He has said he won’t call a special session right away if lawmakers don’t finish on time.

Nevada News Bureau Intern Andrew Doughman contributed to this report.

Democrats Admit New Taxes Dead For Session, Plan Meeting To Cut Their Proposed Spending Plan

By Sean Whaley | 1:52 pm May 23rd, 2011

CARSON CITY –Democrats in the Nevada Legislature are conceding they cannot raise new taxes this session to restore spending reductions in public education and other programs.

As a result, lawmakers have scheduled a joint Senate-Assembly budget committee Tuesday to “reconsider” their previous actions on adding hundreds of millions in funding to public education, higher education and health and human services programs.

Sen. Sheila Leslie, D-Reno, a member of the Finance Committee, said the purpose of the meeting is to make more cuts in the Democrat-approved budgets that have ended up about $968 million over the $6.1 billion spending plan submitted by Gov. Brian Sandoval.

“Yes, more cuts, more cuts in line with his budget,” Leslie said when asked the purpose of the meeting.

News of the budget meeting to make the cuts was first reported by the Nevada News Bureau.

Democrats in the Legislature have proposed a $1.2 billion tax plan to fund their spending restorations, but so far Republican lawmakers have not been willing to go along with the call to extend a package of sun-setting taxes, impose a tax on some services and establish a new business margin tax.

Sandoval has flatly rejected any proposal for new taxes to balance the budget. He has already vetoed a Democrat-approved public education funding plan passed earlier this month.

Senate Majority Leader Steven Horsford, D-Las Vegas, who also serves as chairman of Senate Finance, was not as blunt about the purpose of the joint meeting: “We’re just going to open up the debate about where we are based on the budget and the revenue and see what type of consensus we can reach.”

But Sen. Ben Kieckhefer, R-Reno, said Republicans have not wavered in their opposition to new taxes, and that Democrats are expected to make further spending cuts at the meeting tomorrow.

“I understand they are going to propose additional cuts, but I don’t know what they are going to be,” said Kieckhefer, a member of the Finance Committee. “I assume that it will either be to Economic Forum levels or to levels of Economic Forum plus sunset (taxes) extension, considering they are well over that. So they would have to pare it back to get to that level. We’ll see.”

There is no agreement with Republicans to extend the taxes approved by the 2009 Legislature that will expire June 30. If the taxes were extended, they would bring in about $626 million in additional revenue over the two years of the budget that will start July 1.

Horsford would not say tax increases sought by Democrats are officially dead for the session.

“We continue to meet with individual members to talk about ways to responsibly fund the budget and address concerns from the other side and I hope we will be able to reach full consensus by the June 6 deadline,” he said.

Horsford said Friday is a “big” deadline for getting the budget approved in time for the constitutionally-mandated adjournment.

“We don’t have to take action tomorrow,” he said.

Audio clips:

Senate Majority Leader Steven Horsford says the meeting is to have a debate to see if a consensus can be reached:

052311Horsford1 :09 we can reach.”

Horsford says talks with individual Republicans continue on the possibility of new revenues:

052311Horsford2 :13 June 6 deadline.”

Sen. Ben Kieckhefer says he expects Democrats to cut their party-line approved budget at the meeting tomorrow:

052311Kieckhefer1 :08 to be, so.”

Kieckhefer says he does not know if the cuts will match Economic Forum revenue projections or the projections plus the sun-setting taxes:

052311Kieckhefer2 :18 level, we’ll see.”


Governor Vetoes Democratic K-12 Spending Plan

By Andrew Doughman | 2:58 pm May 16th, 2011

CARSON CITY — Governor Brian Sandoval today vetoed the Democratic spending proposal for Nevada’s K-12 budget.

Democrats and Republicans had been at loggerheads during debate over the bill, largely because it would provide for spending almost $700 million more than Sandoval wanted.

As expected, Sandoval vetoed Assembly Bill 568 because he said “it increases state spending by nearly $660 million above the amount proposed in the Executive Budget.”

In a statement explaining the veto, Sandoval also contended that the bill is a “circuitous attempt to secure a tax increase” by passing a spending bill without the money to back it.

Democrats have, however, proposed a $1.2 billion tax package that ostensibly would raise the money to pay for the expenditures in the bill.

By passing the bill and putting it before the governor, Democrats forced the governor’s hand in signing the veto.

“In the past when governors veto a bill they usually tell you why,” said Assemblyman Marcus Conklin, D-Las Vegas, after the bill passed last week. ”It’ll be interesting to see why.”

Sandoval, however, objected to what he said was the “clear intention of casting opponents [to the bill] as somehow ‘anti-education’ while at the same time forcing a tax increase.”

The $660 million would have paid for such things as teacher’s salaries, which the governor had proposed to cut by 5 percent.

“Today, the governor not only turns his back on the struggling schools of Nevada, but he also risks turning our successful schools into factories of underachievement,” said Senate Majority Leader Steven Horsford, D-Las Vegas, in a statement released after the veto.

Rather than an immediate tax increase, the governor said in his veto statement that he prefers waiting for an economic recovery to bring in more money for schools.

“I proposed that ‘triggers’ be adopted so additional funding can continue to go straight to support of the classroom as revenue becomes available through economic recovery,” he said.



Gov. Sandoval Questions If Legislature Can Hold Meaningful Tax Policy Debate In Time Left In Session

By Sean Whaley | 11:28 am May 11th, 2011

CARSON CITY – Gov. Brian Sandoval is questioning whether the Nevada Legislature can have an in-depth debate about the state’s tax structure with less than four weeks left in the session, but he is about to find out.

In comments made Tuesday, Sandoval said he asked Democrats in January to present any proposals they wanted to be considered to raise revenue. Fourteen weeks later there is still no bill, he said.

“I’ve been asking for whatever that plan was since the night I did the state-of-the-state,” he said. “And now we haven’t had a discussion, we haven’t even had the introduction of a bill that I am aware of.”

The lack of a tax bill was remedied today with measures put forward by legislative Democrats for hearings. Part of the revenue plan, a margin tax on businesses, will be amended into an existing measure, Senate Bill 491.The amendment will be heard Thursday by the Senate Revenue Committee.

The other piece is contained in Assembly Bill 569 outlining a tax on some services. It will be heard in the Taxation Committee on Thursday as well.

“I’m always willing to have a meaningful discussion with regard to tax policy, but I just don’t know if a thorough one can be had in 14 days or however many days are left,” Sandoval said.

The Legislature must adjourn in 120 days, which is June 6.

Sandoval made his remarks as Democrats in the Legislature were passing their version of a public education budget, which adds about $700 million more in revenue than Sandoval has proposed. The bill generated intense debate in the Senate, but was approved on a party-line vote and is now headed to Sandoval for an anticipated veto.

Legislative Democrats presented a conceptual plan last week to extend expiring taxes, impose a tax on some services and create a new business tax to raise $1.2 billion for the two-year budget that begins July 1.

Sandoval said he has submitted a balanced budget and fully expects the Legislature to complete its work by that deadline.

“I’m hopeful the Legislature will adopt that budget,” he said.

Audio clips:

Gov. Brian Sandoval says he has been waiting for a tax proposal from Democrats since January:

051111Sandoval1 :10 I’m aware of.”

Sandoval says he doesn’t know if a review of Nevada’s tax structure can be accomplished in the time remaining in the Legislature:

051111Sandoval2 :10 days are left.”


Legislature Debates Cuts To Benefits, Overtime, Pay Increases For States Employees

By Andrew Doughman | 2:42 pm April 29th, 2011

CARSON CITY – State employees could face further pay increase suspensions as well as cuts to holiday pay under a bill proposed by Gov. Brian Sandoval.

State employees would again face a pay freeze for the time the years they have worked with the state, as well as any potential merit pay. This is in addition to a proposed 5 percent salary cut.

The bill would also make changes to the benefits package for new hires, eliminating a severance provision worth five years of retirement benefits if an employee was laid off because of budget cuts. Instead, the employee would get six months of health benefits.

Representatives from the governor’s office testified that the proposals would put Nevada better in line with neighboring states.

They said new state employees earn a maximum of 104 hours and a minimum of 80 hours per year in paid sick leave among the states neighboring Nevada. In Nevada, new employees earn 120 hours per year in sick leave.

The governor’s proposal would reduce sick time for all employees more toward the Western state average of 98 hours per year.

“If you look at that as the high and low, Nevada was two days beyond the high of any of our neighboring states,” said Julia Teska from the state budget office.

The 5 percent salary reduction saves the state $379.7 million. The suspension of pay increases saves $212 million.

The state does account for paying out employees for accrued vacation and sick leave, so the budget office did not offer a direct savings number.

State employee unions lined up to testify against the bill in a legislative hearing this morning.

“This is another bill that seems to be attacking state employees,” said Vishnu Subramaniam, representing the American Federation of State, County and Municipal Employees.

State employees would also earn reduced overtime pay for hours they work on holidays. Changing holiday overtime pay would save an estimated $2.7 million.

Now, all state employees get paid on holidays, and working on a holiday earns an employee pay at 1.5 times the normal hourly rate. Altogether, that means state employees now earn money at 2.5 times the normal rate for working on holidays.

This proposal would lop off 0.5 of that rate so that state employees would earn double time on holidays.

“The proposals that you’re making are not intended as a budget cut per se, but to equalize us with what the market says when you look at the marketplace,” said Randy Kirner, R-Reno.

Public sector union representatives said that the cuts disproportionately affect the working class. They said that the state continues to pay out six-figure salaries to contractors and high-level administrators while balancing the budget with reductions in benefits and pay for the rank and file.

“This is just something of greed,” said Kevin Ranft, also from the American Federation of State, County and Municipal Employees.

A legislative committee took no immediate action on the bill, but legislators are expected to address the proposal again as part of the governor’s budget.


Legislators “Offended” and “Insulted” As They Make Symbolic Party-Line Vote Over Education Budget

By Andrew Doughman | 7:00 am April 20th, 2011

CARSON CITY – It was not until 30 minutes before midnight that a six-hour debate in the Assembly ended with a promise to talk more later.

After listening to presentations outlining more than $1 billion in “major reductions” to the K-12 budget, legislators debated their willingness to compromise or negotiate about Gov. Brian Sandoval’s proposed general fund budget.

“My caucus will be voting gov rec,” said Assembly Minority Leader Pete Goicoechea, R-Eureka, using an abbreviation for the governor’s recommended budget. “So you’re not going to get the wiggle room you’re looking for.”

In the end, all 16 Assembly Republicans voted in a symbolic motion to support a motion last night to pass Gov. Brian Sandoval’s recommended budget. All 26 Assembly Democrats opposed the motion.

The Senate will debate the same budget in the same process today.

Republicans repeatedly said they want to see specific tax proposals as well as a reassurance that reforms they want will pass out of the Assembly as a trade for tax increases.

“Until we have the discussions about the reforms and the revenue package, we will continue to have a discussion about gov rec,” Goicoechea said.

Democrats stressed the need to debate specifics of the governor’s proposed education budget. Speaker John Oceguera, D-Las Vegas, said the Assembly needed to find common ground for an acceptable level of cuts before they could discuss additional revenues.

“We rarely change a lot … 10, 15, 20 percent of the budget,” he said.

He called the six-hour marathon hearing in the Assembly chambers a success.

“We got the temperature of where people are at,” he said. “It felt to me that we saw a few people who said we can look at a few things.”

Sprinkled throughout the hearing in Assembly chambers were instances of legislators calling each other “disingenuous” and saying they were “offended” and “insulted” with each other.

The verbal sniping came only hours after the Senate inducted former Sen. Bill Raggio into the Senate’s Hall of Fame. Raggio, a legislator who retired earlier this year, was a constant critic of the partisan hardening and lack of respect characteristic of 21st century political debate.

Assemblywoman Marilyn Kirkpatrick, D- North Las Vegas, said Nevada’s Assembly was starting to look like D.C.

“If we want to have D.C. politics, here it is,” she said.

Both Democrats and Republicans did, however, say that the new process of having budget discussions involving all 42 Assembly members appealed to them more than having a few key legislators meet and make decisions in private.

But that does not make anybody more likely to agree.

“It looks like we’re going to be here for a very long haul,” said Assemblyman William Horne, D-Las Vegas.

Assemblyman Mark Sherwood, R-Las Vegas, called the whole hearing a “farce,” to which Kirkpatrick, retorted: “if you don’t respect the institution, don’t come back.”

As Wednesday morning drew close, Goicoechea said there’s “no doubt” everybody wants to find a solution.

“This is the beginning, this isn’t the end,” Smith said. “This was the first tough discussion we had … We can’t call each other disingenuous because we disagree. It’s not a farce. It’s not a train wreck.”

But by 11:30 p.m., the only unanimous motion was for the Assembly to retire for the night.