Posts Tagged ‘Clinger’

Gov. Sandoval Announces Appointment Of New Administration Department Director

By Sean Whaley | 12:44 pm June 13th, 2011

CARSON CITY – Gov. Brian Sandoval today announced he has appointed Jeff Mohlenkamp as director of the Department of Administration effective July 11.

“I am pleased to announce that Jeff has agreed to join the team and lead the Department of Administration,” Sandoval said. “With more than 20 years of experience in state government, Jeff’s depth and breadth of experience across several agencies will be a strong asset to both my office and the department as a whole.”

Mohlenkamp replaces Andrew Clinger, who left state service to become Reno city manager. Today was Clinger’s first day on the job.

The director of the department also serves as the state budget director.

Mohlenkamp, currently deputy director of support services at the Department of Corrections, was previously the chief fiscal officer at the Nevada State Division of Mental Health and Developmental Services. As deputy director at Corrections, Mohlenkamp’s primary responsibility is to handle Budget Division and legislative requests and to prepare presentations for public testimony.

He has improved monitoring and management of overtime expenditures, analyzed and closed the biomass plant, formulated and presented sound arguments to reduce the department’s budget and developed an energy management process.

As CFO at the Division of Mental Health, Mohlenkamp was responsible for oversight of 13 different budget accounts totaling over $320 million annually and over 1,900 employees. His duties also included billing of federal revenues including Medicaid and Medicare, private insurance collection and management of several federal grants and revenue agreements from Washoe County, Clark County and several rural counties.

From November 2003 to November 2005, Mohlenkamp was an executive branch auditor in the Internal Audits Division of the Department of Administration.  He has also worked for the Nevada Gaming Control Board as a special agent and supervisor.

Deputy Budget Chief Stephanie Day will serve as interim director of the Department of Administration until Mohlenkamp takes over the job.

Sandoval also announced that he has named Director of the Department of Public Safety Chris Perry, Director of the Department of Corrections Greg Cox and Director of the Department of Agriculture Jim Barbee as permanent directors of their respective departments.  All three had served as acting directors since Sandoval took office.


Performance-Based Budgeting Bill Wins Approval In Legislature, Heads To Governor

By Sean Whaley | 4:11 pm May 23rd, 2011

CARSON CITY – A bill implementing “performance-based” budgeting, including requirements for agencies to set benchmarks and goals and be held accountable for their spending priorities using quantifiable measurements, passed the Senate today and now heads to Gov. Brian Sandoval.

Assembly Bill 248, sponsored by Assemblywoman Debbie Smith, D-Sparks, and Assembly Speaker John Oceguera, D-Las Vegas, already passed the Assembly.

The bill is part of a package of Democratic legislation to reform state government to make it more efficient, transparent, and accountable to Nevada’s taxpayers. The new budgeting process would replace the current practice of taking every agency budget approved by the Legislature and adding to it every session to accommodate rising caseloads, inflation and other cost increases.

“Performance-based budgeting is a proven approach to making government more efficient, accountable and making sure every taxpayer dollar is working harder and being spent wisely,” Smith said.

In addition to implementing a performance-based budgeting system, AB248 requires the posting of the information about performance on the Department of Administration website, along with report cards on state agencies, to increase transparency.

AB248 further empowers the governor to authorize executive agencies to conduct public hearings on the proposed budget between October 15th and January 15th of the budget cycle, providing additional opportunities for public input and enabling the legislature to have more information when the session convenes.

State Budget Director Andrew Clinger produced Nevada’s first performance-based budget for the current legislative session at the direction of former Gov. Jim Gibbons, along with the traditional budget document, for consideration by lawmakers.

If signed into law, AB248 would mandate the creation of such a budget.



Legislative Democrats, Sandoval Administration Remain At Odds Over State Budget

By Sean Whaley | 4:32 pm March 28th, 2011

CARSON CITY – A two-hour review by the full Senate today of Gov. Brian Sandoval’s proposed two-year, $5.8 billion general fund budget spent a lot of time on what his spending plan could mean well into the future.

A report to the state Senate, meeting as a Committee of the Whole to hear an update on the recommended budget, shows the danger of future budget shortfalls because of the use of one-time funding options by Sandoval to balance the upcoming 2011-13 budget that will start July 1.

The 2013-15 budget faces a nearly $1.1 billion hole because some of Sandoval’s proposed revenues will not recur in future budget years, according to data provided by legislative fiscal staff.

Senate Majority Leader Steven Horsford, D-Las Vegas, said it is not responsible for lawmakers to approve such a budget.

“This governor’s budget creates a $1.2 billion-$1.3 billion hole in the next budget in 2013,” he said. “That is irresponsible of us as legislators to create a hole for another Legislature to deal with.”

The Sandoval administration rejected the criticism, saying decisions have to be made about the budget every legislative session. The analysis was also based on no revenue growth, which is unrealistic.

“There are decisions that will have to be made next time in the budget just like there are every time we put a budget together,” said state Budget Director Andrew Clinger. “So to say that we’re going to have a $1.1 billion hole assumes you make no decisions and change nothing and that the economy doesn’t grow at all. And those are just two assumptions that are just not valid.”

The 2009 Legislature approved temporary tax increases to balance the budget. These expiring increases have contributed to the lower revenue projections for Sandoval’s budget.

Dale Erquiaga, senior adviser to Sandoval, said: “We need for the Legislature to start closing this budget.”

Today’s budget discussion made it clear the Sandoval administration and legislative Democrats, led by Horsford and his Assembly counterpart, Speaker John Oceguera, D-Las Vegas, remain far apart on an acceptable spending plan.

“I’m not prepared to support the level of reductions that are proposed,” Horsford said at the conclusion of the budget review. “I think there is a lot we can still agree on.

“My hope is that as we talk about the cuts that we will have to make, the reforms that we’ve agreed should occur, that we will also talk about the revenue that is needed to responsibly balance this budget,” Horsford said. “And if we can do that in a cooperative way, then we should be able to close down the budget in a timely manner.

“If not, then it is going to mean doing business in a totally different way than we’ve ever done it before,” he said.

Senate Minority Leader Mike McGinness, R-Fallon, said the briefing was helpful but appeared to be designed to put a scare into his colleagues in an effort to advance the premise that additional tax revenues are needed to balance the budget.

“I think it was probably designed to scare us all a little bit,” he said.

Asked if it worked, McGinness said no.

McGinness said his caucus remains firmly opposed to any tax increases, or the continuing of taxes set to expire June 30, to balance the budget.

Sandoval has said repeatedly he will reject any budget that comes to his office with a tax or fee increase.

With Sandoval’s threat of a veto of any budget with tax or fee increases, Democrats in the Legislature face a tough sell to their GOP colleagues to gather enough votes to override a veto. Democrats would need three Republican votes in the Senate, and two GOP votes in the Assembly, to approve tax or fee increases over the objection of Sandoval.

The hole in future budgets was detailed in a report by Russell Guindon, a fiscal analyst for the Legislature, who said tax revenues would have to grow at 12.6 percent in 2014 and 2015 to make up for the loss of the one-time revenues included by Sandoval for the upcoming budget. Such levels of revenue growth are probably not attainable, he said.

Revenue growth for the state budget is officially set by a panel of private sector appointees called the Economic Forum.

One example of the future budget hole is a plan by Sandoval to borrow on the Insurance Premium Tax to generate $190 million to avoid cuts to various health and human resources programs. This would require payments of $53 million over four years starting in 2014 to pay for the revenue option for the upcoming budget.

Another is the proposal to use $300 million in school district bond reserve funds to fund public education operating costs.

Guindon acknowledged that the future budget hole estimated in his analysis would be less if tax revenues grow.

The hearing was cordial but a request by McGinness that Clinger be permitted to testify in the committee hearing was not granted. Clinger would have been able to provide information on a budget amendment submitted to the Legislature earlier in the day showing $120 million more in revenue for the budget than previously estimated, he said.

Horsford said the budget amendment came late and would have to be taken up at a future discussion.

In a statement announcing the revenue increase prior to the Senate budget update, Sandoval said: “I am pleased to announce that this amendment adds more than $120 million in revenue projections – the majority of which I have directed toward K-12 education.”

The budget discussion in the Senate did not include this new revenue, which is coming primarily from adjustments to the Net Proceeds of Minerals Tax and a higher level of federal support for Medicaid based on per capita personal income in Nevada.

The revenue increase does not mean more money in Sandoval’s budget, however. Instead, Clinger said the additional revenue will mean a reduction in the amount of bond reserve funds held by school districts needed to fund public education operating costs for the next two years.

Heidi Gansert, chief of staff to Sandoval, also said the insurance premium tax proposal is a last resort that will be used only if needed. Gansert also questioned the pay-back numbers discussed in the Senate hearing.

There was some modest cause for optimism about the budget. Clinger said he expects the Economic Forum to revise its revenue projections upwards when it meets May 2. Any additional revenue would be used by Sandoval and lawmakers to restore critical cuts to the budget.

Audio clips:

Senate Majority Leader Steven Horsford says the hearing was intended to show the challenges facing lawmakers in balancing the budget:

032811Horsford1 :24 approve this budget.”

Horsford says the budget discussion needs to address new revenues as well:

032811Horsford2 :14 balance this budget.”

Horsford says if Legislature can have an adult discussion with Sandoval on the budget, it will be closed on time:

032811Horsford3 :13 done it before.”

Horsford says Sandoval’s budget creates a huge hole in future budgets:

032811Horsford4 :15 to deal with.”

State Budget Director Andrew Clinger says analysis of future budget hole is unrealistic:

032811Clinger :21 just not valid.”

Senate Minority Leader Mike McGinness says GOP not convinced tax increases are needed:

032811McGinness :08 don’t think so.”


Gov. Sandoval Signs First Two Public Policy Bills Of 2011 Session

By Sean Whaley | 2:07 pm March 17th, 2011

CARSON CITY – Gov. Brian Sandoval today signed the first two public policy bills of the 2011 legislative session.

Sandoval signed Assembly Bill 127, a bill sponsored by Assembly Speaker John Oceguera, which eliminates the requirement that employees of the Senate and Assembly compile and prepare sets of books containing bills, resolutions, journals and histories during each legislative session. The information will now be published electronically using the Nevada Electronic Legislative Information System (NELIS) operated on the Legislature’s website.

“I am proud to join 17 other states in our country in instituting paperless systems and I applaud the speaker for taking the lead on this initiative,” Sandoval said. “Making information available electronically not only helps our environment, it gives Nevadans near-instant access to the facts and figures before committees and their representatives.”

Oceguera, D-Las Vegas, said the measure will save more than $1 million in the 2011 session alone.

Speaker John Oceguera and Gov. Brian Sandoval at AB127 bill signing

“I am pleased we continue to show our constituents that Republicans and Democrats can come together and agree on cost-saving measures that make sense, and I fully expect the governor and I will be getting together to do many more of them,” he said.

Sandoval also signed Assembly Bill 15, sought by the Budget and Planning Division and Administration Department Director Andrew Clinger, which eliminates the requirement to produce the statistical abstract and the Biennial Report. The Biennial Report will be consolidated into the overall Governor’s Priorities and Performance Budget publication. The Priorities and Performance Budget publication also contains the data previously published in the statistical abstract.

“This bill is a direct result of the Budget and Planning Division taking a hard look at its priorities and deciding to use our resources more effectively,” Sandoval said. “What’s more, by consolidating information into one publication, we are making it easier for Nevadans to locate the data they are interested in and making government more responsive.”

Sandoval Administration Moves Forward With Priority-Based Budgeting Process

By Sean Whaley | 3:35 pm February 3rd, 2011

CARSON CITY – While there has been a lot of criticism directed at the details of Gov. Brian Sandoval’s proposed spending plan, there is acclaim for his development of a new budgeting process designed to ensure state agencies get results with taxpayer dollars.

The “Priorities and Performance Budget” completely changes the way the spending information is presented, said state Budget Director Andrew Clinger.

The single budget volume breaks out the spending for state agencies into activities, provides a ranking of the priority of the activities and where possible, includes measurements of how well objectives are met to achieve the goals of the spending priorities.

Clinger, in presenting the new budgeting format to lawmakers at a hearing last week, said much remains to be done to make the process complete, particularly in the use of “performance measures” to assess how well state agencies are meeting their goals. But it should help lawmakers in their budget review this session, he said.

“It really changes the discussion of the budget from looking at line items and talking about how many PCs (personal computers) or how many fax machines, and it really begins to look at what is it that we’re doing, what outcomes do we expect, and what are those outcomes costing us, and are we doing it in the most efficient and most effective manner possible,” Clinger said.

Senate Majority Leader Steven Horsford, D-Las Vegas, said he likes the new budget analysis.

“He (Clinger) did it without dollars and I think that’s great,” he said.

Efforts to change the way Nevada prepares its two-year budget have been attempted in the past. In 2009, outgoing Assembly Speaker Barbara Buckley, D-Las Vegas, pushed such a measure through the Legislature, but it was vetoed by former Gov. Jim Gibbons, who cited a failure to fund the cost of the effort.

The Legislature in this interim period then undertook its own fundamental review of budgets, many proposals which ended up in Sandoval’s two-year, $5.8 billion spending plan.

In his State of the State address, Sandoval said of the new budget process: “We articulate not only what level of priority each program or service carries, but the performance measures by which it will be judged. In the coming biennium, this initiative will expand to include public participation through websites and other tools as we ask Nevadans to further rank spending priorities. Even more robust performance indicators will therefore be established.”

The fundamental review was initiated under the direction of Gibbons as the 2011-13 budget was being developed this past summer. In a memo sent out by Clinger in June to agency officials, he outlined the new process: “We must create a budget process that looks first at the outcomes citizens expect. Some of the questions this new budget building approach needs to answer are: What is the proper role of state government? What services must we provide? What is the most efficient way to provide those services? And, what is the best way to pay for them?”

Horsford said he is pleased that Gibbons and Sandoval moved forward with the new review process.

“I’m glad that they followed through with the legislative intent as we passed it in 2009,” he said.

The Nevada Policy Research Institute, in a report released last month, called Nevada’s traditional budget process broken and called for fundamental change to bring about reasonable spending and improved performance in public education and other government services.

Geoffrey Lawrence, deputy director for policy at the free market think tank, said Nevada’s current “baseline” budgeting process, where every program is carried forward every two years with spending increases factored in for inflation or caseload growth, helped bring the state to its current financial crisis.

Lawrence described the new budget method outlined by the Sandoval Administration as not perfect, but offering a “refreshing departure from many poor budgeting practices of the past.”

He called it the first performance-based executive budget in Nevada history.

But it does have one shortcoming, Lawrence said.

“Sandoval fails to enumerate policy objectives in terms of priority,” he said. “Instead, government programs are lumped together in categories labeled ‘high,’ ‘medium’ and ‘low’ priority. Oddly, Sandoval’s budget team only put $143,914 of general fund spending in the ‘low’ priority category — while everything else received a ‘medium’ or ‘high’ priority demarcation. This reluctance to establish a clear-cut and meaningful hierarchy of spending undermines the value that this new approach adds.”

Audio clips:

State Budget Director Andrew Clinger says the new budgeting process provides more useful information:

020311Clinger1 :17 for those activities.”

Clinger says it changes the discussion of the budget from line items to outcomes:

020311Clinger2 :19 effective manner possible.”

Clinger says the new budget process helps prioritize agency activities:

020311Clinger3 :11 agency is performing.”

Senate Majority Leader Steven Horsford says he is glad Clinger followed through with the new budget review process:

020311Horsford :07 it in 2009.”

Nevada State Agency Posts Contract Information Following Release Of Audit

By Sean Whaley | 11:31 am January 7th, 2011

CARSON CITY – In the wake of a legislative audit critical of state agency contracting practices with current and former employees, the Nevada Department of Conservation and Natural Resources has posted its information online.

Bob Conrad, public information officer for the department, said the contract information was placed on the agency’s website on Dec. 29.

The audit of Nevada state agencies using current and former employees as contractors identified numerous potential concerns, including a case of one worker seeking payment for 25 hours of work in one 24-hour day and another where a former state worker is now earning $350 an hour as a contractor versus $65 an hour in his state job. This contract is still in effect and has been extended through June 30, 2011. As of September this year, the contractor has earned $472,493 from the state.

The audit information was turned over to the Nevada Attorney General for review for any potential abuses.

The Conservation and Natural Resources Department lists six current and former employees with contracts on its website, including one individual earning $150 an hour and another earning $200 an hour. An explanation for the need for each contract is included. All of the contracts have been approved by the Nevada Board of Examiners, made up of the governor, secretary of state and attorney general.

The agency’s website says the contracts fulfill specific needs that cannot be met by existing staffing levels or with current staff expertise. None of the contracts use the state general fund as a revenue source. The agency’s website also links to the actual contracts.

Conrad said the $350 an hour contract cited in the audit does not involve his agency. The information was posted to provide transparency to the public, he said.

“Our contracts are probably saving money for the state,” Conrad said. “We’re not using general funds and we think we have a good story to tell.”

The most significant contracts are for:

-          Christine Thiel, a former deputy state engineer with the Division of Water Resources who retired in 2004, is earning $150 an hour as a negotiator for the Truckee River Operating Agreement in northern Nevada. She earned $12,712 in fiscal year 2008 and $15,150 in fiscal year 2009.

-          Roland Westergard, a former state engineer with the Division of Water Resources who retired in 1990. He too is employed as a negotiator for the Truckee River Operating Agreement. He initially earned $150 an hour but saw an increase to $200 an hour starting in September 2009. He earned $19,233 in 2008 and $28,928 in 2009.

The legislative audit discussed Dec. 8 identified 14 state agencies contracting with 51 current or former employees who were performing similar duties to their current or former job descriptions at a total cost of $2.3 million in fiscal years 2008 and 2009. Two such contracts were identified for the Department of Conservation and Natural Resources.

Andrew Clinger, director of the Department of Administration, acknowledged the audit raised concerns about the use of the contracting process by state agencies. He is working with a group of administrators and others to bring forward reforms to the process to the Board of Examiners by February.

Nevada Officials Moving Quickly To Address Concerns With State Employee Contracting

By Sean Whaley | 5:39 pm December 14th, 2010

CARSON CITY – Secretary of State Ross Miller said today an audit released last week examining current and former state employees winning contracts with state agencies contained “alarming findings.”

Miller asked for a response from Department of Administration Director Andrew Clinger on how the findings are going to be addressed. He made his comments at the Board of Examiners meeting, which is the panel that approves contracts entered into by the state. The board is made up of the governor, attorney general and secretary of state.

Miller said he wants to make sure the issues raised in the audit, including some contracts with current and former state employees that appear to involve excessively high rates of pay, are adequately addressed.

Clinger said a working group is being assembled to review current policies and procedures and will meet for the first time tomorrow. Representatives from the Attorney General’s office, the state Purchasing Division, the executive branch Internal Audit Division and others, will meet to develop recommendations to curb any further abuses, he said.

Clinger said he would like to bring some changes to the Board of Examiners by February for its approval, “to help prevent these sorts of violations from happening in the future.”

After the meeting, Clinger said the contracts are reviewed either by his agency or other state agencies that contract directly for the work, but there are no rules in place to deal with the issues raised in the Legislative Counsel Bureau audit reviewed by lawmakers.

A lot of the employees are hired under employment contracts approved by the Board of Examiners, he said. Once these “master service” agreements are approved by the board, the agencies can then contract with people individually and so the details of the employment agreements with current or former state employees do not come back to the board for review, Clinger said.

Clinger said he believes that the issue of excessive hours and pay identified in the audit involves a very small number of current and former state employees, but said he was disappointed by the findings.

“I was disappointed from the standpoint of given where we’re at with the budget crisis, and given where we’re at with public perception, I think it hurts our credibility going into session,” he said.

There may be justification for some of the rates of pay identified in the audit, but Clinger said at first look, the $350 an hour being paid to one former employee seems excessive.

The audit of Nevada state agencies using current and former employees as contractors identified numerous potential concerns, including a case of one worker seeking payment for 25 hours of work in one 24-hour day and another where a former state worker is now earning $350 an hour as a contractor versus $65 an hour in his state job.

The audit also found an example of a current state employee earning $62,590 as a contractor in fiscal years 2008 and 2009 while earning a state salary as well.

At least eight examples were identified where state employees working as contractors either did the contract work during regular state work hours or could not provide documentation to show they did the work on their own time.

The Legislative Commission’s Audit Subcommittee voted to turn the audit over to Attorney General Catherine Cortez Masto for a review of possible criminal violations.

The audit identified 250 current and former employees providing services to the state. These employees were paid a total of $11.6 million during fiscal years 2008 and 2009, the years covered by the review.

Audio clips:

Secretary of State Ross Miller says state agencies must correct issues found in audit:

121410Miller :12 the cracks again.”

Administration Director Andrew Clinger says he is working to put safeguards in place:

121410Clinger1 :15 deal with those.”

Clinger says the audit has hurt the state’s credibility going into the 2011 legislative session:

121410Clinger2 :13 going into session.”

Audit Of Nevada Agency Use Of State Workers As Contractors Finds Abuse, Potential Criminal Activity

By Sean Whaley | 12:00 pm December 8th, 2010

CARSON CITY – An audit of Nevada state agencies using current and former employees as contractors has identified numerous potential concerns, including a case of one worker seeking payment for 25 hours of work in one 24-hour day and another where a former state worker is now earning $350 an hour as a contractor versus $65 an hour in his state job.

The audit also found an example of a current state employee earning $62,590 as a contractor in fiscal years 2008 and 2009 while earning a state salary as well.

At least eight examples were identified where state employees working as contractors either did the contract work during regular state work hours or could not provide documentation to show they did the work on their own time.

The audit also shows that the Legislature was kept in the dark about much of the contract work by state employees because the Department of Administration used a narrow definition of the term “consultant.”

State Sen. Sheila Leslie, D-Reno, the chairwoman of the Legislative Commission’s Audit Subcommittee, said the audit suggests the potential of criminal actions in some cases. The panel voted to turn the audit over to Attorney General Catherine Cortez Masto for review and possible action.

Even if there is no criminal activity, the audit shows abuses of the contracting process, Leslie said.

Andrew Clinger, director of the state Department of Administration, agreed the use of current and former state employees as contractors “is out of hand.” The agency accepted all seven recommendations made in the audit.

The Legislature is expected to further address the issue in the upcoming 2011 session.

The use of current and former state employees as contractors was a major issue in the 2009 legislative session. The Legislature passed Assembly Bill 463 to tighten up the use of consultant contracts for current and former state employees.

But because of the narrow definition of consultant used by the state, AB463 has not resulted in information about such contracts entered into by the state being provided the lawmakers, the audit found. The Department of Administration did not provide any consultant contracts to the IFC for review and approval from July 2009 through July 2010, a period of more than one year, the audit found.

“Therefore, only under rare circumstances would a contractor be deemed a consultant and reported to the (Legislature’s Interim Finance Committee),” the audit found. “In contrast, boards, school districts and the Nevada System of Higher Education (NHSE) used a broad definition of consultant and reported many contracts to the IFC.”

The audit identified 250 current and former employees providing services to the state. These employees were paid a total of $11.6 million during fiscal years 2008 and 2009, the years covered by the review.

The state employee who put in for 25 hours of pay in a single day was paid for 10 hours of contract services, a regular 10-hour shift on his timesheet, plus an additional five hours of overtime.

The former employee being paid $350 an hour as a contractor compared to $65 an hour while a state employee is identified as a person with “an extensive background in complex water and natural resource issues.” The individual started work as a contractor at the higher rate of pay immediately after leaving state employment. The contract is still in effect and has been extended through June 30, 2011. As of September this year, the contractor has earned $472,493 from the state.

Among the other audit highlights:

A former state employee had a contract rate of $150 an hour versus $71 an hour as a state employee. The individual retired and came back to the same agency as a consultant regarding water and natural resource issues. The contract started in December 2007 and has been extended through February 2013. As of September 2010, the former employee has been paid $55,125.

A significant number of the current and former state employees doing independent contractor services are doing work similar to their state jobs. A total of 51 of 111 contracts reviewed show pay for similar work, including 18 current and 33 former employees. Many returned to the same agencies where they had worked.

The audit did find appropriate situations for employing a former employee as a consultant.

“Former employees provide a valuable resource to the state because of their knowledge and skills gained through years of state service,” the audit said.

In one example, a firefighter provided training for the Department of Public Safety at a rate of $26 an hour. Total payments were $1,400 over a two-year period.

Gov.-elect Sandoval Says Attracting New Businesses To Nevada A Top Priority

By Sean Whaley | 4:56 pm November 10th, 2010

CARSON CITY – Gov.-elect Brian Sandoval said today he will make it a priority as governor to encourage businesses to relocate to Nevada from neighboring states where taxes have been raised to deal with the economic slowdown.

In order to bring those businesses and jobs to Nevada, the state has to live within its means and maintain its minimal tax and regulatory environment, he said.

That means Sandoval, who takes office in January, will present a balanced budget to the 2011 Legislature that contains no tax or fee increases.

“Raising taxes and fees is the worst thing we can do when our economy is struggling,” he said.

Sandoval mentioned a recent report naming Nevada as the 5th best state in the country to do business, and he said preserving that ranking and capitalizing on it will be a priority of his administration. California ranked 50th in the same survey.

“I think we have a great opportunity to bring new businesses from the states of California and Oregon where they’ve chosen to raise taxes and where they over-regulate,” he said. “And so there are a lot of prospects out there. In fact I’m already beginning to make phone calls in terms of businesses that are looking at the state of Nevada to tell them that we have a very strong business environment. That this is a great place to live.”

Sandoval said Nevada has challenges with its education system, but that he will address that as well to ensure the state is attractive to new business.

“You know, it is no myth,” he said. “There are a lot of significant companies that are making serious consideration about relocating to the state of Nevada, and I’m going to be personally involved. And I’m going to make the phone calls, I’m going to make the visits, I’m going to sign the letters. I’m going to do whatever it takes because the bottom line is, is we need to bring more jobs to the state of Nevada and get people back to work.”

Sandoval met Tuesday with state Budget Director Andrew Clinger, getting his first review of the state revenue and spending picture. Today he also reappointed Clinger as budget director, and named former state Assemblywoman Heidi Gansert as chief of staff. He also named Dale Erquiaga, a former Clark County School District official, as senior adviser. 

Clinger said prior to the Tuesday meeting he anticipates the state will receive about $5.3 billion in tax revenues in the coming two-year budget that will begin July 1, 2011. The precise number will be set by the Economic Forum on Dec. 1.

The current two-year budget will see about $6.4 billion in general fund spending, although this does not include about $1.1 billion in revenue being spent in the current budget that will go away in the new budget, including $600 million in federal stimulus funds.

State agencies and higher and lower education have submitted budgets totaling $8.3 billion.

Sandoval called the budget meeting productive but preliminary, saying he is a long way from making decisions on how to balance the budget with only about $5.3 billion in revenue.

“There are still a lot of hard choices that have to be made,” he said. “There are going to be some budget reductions which I take very, very seriously.”

Audio clips:

Gov.-elect Brian Sandoval says cuts will be needed to balance the budget:

111010Sandoval1 :08 very, very seriously.”

Sandoval says Nevada has a great opportunity to attract new businesses from neighboring states:

111010Sandoval2 :09 and over regulate.”

Sandoval says he is already making calls to businesses to lure them to Nevada:

111010Sandoval3 13 place to live.”

Sandoval says there are major companies seriously considering relocating to Nevada:

111010Sandoval4 :22 back to work.”

Development Of Next State Budget Under Way

By Sean Whaley | 1:52 pm September 10th, 2010

CARSON CITY – Nevada state agencies and public education have submitted budgets calling for nearly $8 billion in spending for the upcoming two years, about $3 billion more than what is expected to be available with current tax revenues.

State Budget Director Andrew Clinger said the gap will exist in large part because of the expiration of temporary tax increases approved by the 2009 Legislature, the loss of one-time federal stimulus funds and some increased caseloads, particularly for Medicaid.

The spending plans submitted by state agencies and education by a Sept. 1 deadline assume that the current furlough program and merit pay freezes will not be continued when the new budget takes effect on July 1, 2011. If the governor and Legislature decide to continue the pay freezes and one-day-a-month furloughs, the nearly $8 billion in spending would be reduced by about $480 million.

That still leaves about a $2.5 billion gap in anticipated tax revenue and potential agency spending, Clinger said.

About $1 billion of the gap is related to taxes that will expire on July 1, 2011 unless extended by the Legislature. Lawmakers in 2009 increased the sales tax and the modified business tax on the state’s largest employers to balance the current budget. Car registration fees were also increased.

The American Recovery and Reinvestment Act funds that will not be part of the next budget total nearly $600 million, Clinger said. So the loss of the temporary tax increases and federal stimulus funds contribute about $1.6 billion of the $3 billion difference between anticipated revenues and spending, he said.

The remainder of the difference has not been completely analyzed yet, but much of it is due to seeing more people becoming eligible for Medicaid, which will require an increase in state general fund spending, Clinger said. Medicaid provides health care for low income people, many of them children and the elderly. The costs are shared by the federal government and the state.

Caseload growth in Medicaid and related programs is expected to require $150 million in new spending over the life of the new two-year budget.

If the spending level for the 2011-13 general fund budget ends up at $7.5 billion because furloughs are extended, it would be an increase of about $1 billion over the current two-year budget where spending is expected to total $6.5 billion by June 30, 2011, Clinger said.

But those numbers don’t paint a full picture, he said. The nearly $600 million in lost federal stimulus funds will have to be made up with general fund revenue in the next budget, so that is a major factor in the increase.

But there are some actual proposed spending increases in the new budget, particularly the $150 million in increased Medicaid spending, Clinger said.

“It is going to be important that we outline how you get from $6.5 (billion) to the $8 (billion),” he said. “I haven’t gone through the process of comparing the current $6.5 billion to the $8 billion to sort of give you a reconciliation of that but that is one of the things we will do.”

A number of legislative leaders have already said taxes have to be on the table as a potential solution to the budget shortfall, but both leading party candidates for governor have rejected the idea of new or increased taxes to bridge the gap between revenue and spending.

Assembly Majority Leader John Oceguera, D-Las Vegas, said he believes lawmakers must first look to find efficiencies and implement reforms where possible. After that process is completed, there will likely still be a gap between revenues and what is needed to fund the operations of state government for the next two years, he said.

“But I think we ought to work on the checkbook side of things first, on what we’re spending money on,” Oceguera said.

The amount or revenue available to fund state programs and services won’t be known for certain until after the Economic Forum meets in December. The group’s projections must be used by lawmakers in adopting a balanced budget.

Clinger’s office has also embarked on a review of the programs being offered by state government with an eye to identifying the core services that must be provided. Programs that do not meet the priority criteria would then be on the table for potential cuts or even complete elimination as part of the budget balancing process.

The Legislature has also created a committee to perform a fundamental review of some state agency budgets with an eye towards finding savings and efficiencies. The panel meets again on Wednesday.


Audio clips:

Budget Director Andrew Clinger says the proposed state spending levels will have to be reconciled with the current budget:

090910Clinger1 :11 we will do.”

Clinger says the potential of $1.5 billion more in spending in the next budget must be explained:

090910Clinger2 :23 to the $8.”

Assembly Majority Leader John Oceguera says Legislature must first look to efficiencies in state government before considering new revenues:

090910Oceguera :30 spending money on.”

Governor Gibbons Evaluating Strings Tied to Federal Support Before Accepting Funding

By Sean Whaley | 1:56 pm August 11th, 2010

CARSON CITY – Gov. Jim Gibbons said today he wants to see what strings are attached to the $82 million approved by Congress this week to hire teachers in Nevada before agreeing to accept the funds.

“What we want to do is study the requirements for taking that money,” he said. “I’m prepared to say ‘thank you’. I’m prepared to say ‘thank-you but no thank-you’.”

The funding would save 1,400 teaching jobs in Nevada this year.

But Gibbons said such appropriations typically require a “maintenance of effort” that means the state has to continue to support programs after the federal funding goes away. The funding for the teachers does include a maintenance of effort requirement.

Gibbons said the state may not be able to afford to comply with the maintenance of effort requirements, hence the review.

Gibbons said he would also prefer more flexibility with the funding. Some Nevada school districts might need a computer system or textbooks rather than staff, he said.

The law appropriating the funds is still being reviewed and once the state’s obligations are clear, Gibbons said he will make a decision on whether to accept the funding.

State budget Director Andrew Clinger said another issue is that the funding is for only one year.

“So what do you do with those teachers you hire for this school year,” he said. “Come a year from now you’ve got to lay them all off because you don’t have the funding to continue the positions?”

But Gibbons acknowledged that any funding that would keep 1,400 Nevadans working, even if only for one year, has to be given serious consideration.

Nevada leads the nation in unemployment with a rate of 14.2 percent in June.

While Gibbons has yet to commit to funding, the Nevada State Education Association welcomed the action by Congress and the President.

“We commend and thank our friends in Congress who stood firm on this issue which provides federal dollars to Nevada in order to save jobs,” said NSEA President Lynn Warne. “We look now to state legislative leaders to work in the same proactive manner in creating funding sources to strengthen K-12 public education in Nevada.”

Gibbons said he is also evaluating the nearly $80 million in Medicaid funding Nevada will receive from the legislation. The money was included in the budget approved by the Legislature for this year.


Audio clips:

Gov. Gibbons says the federal funding may require a commitment the state can’t afford:

081110Gibbons1 :31 the matching dollars.”

Gibbons said he is prepared to accept or reject the funding after his review:

081110Gibbons2 :05 but no thank-you.”

Rory Reid Calls for Reform and Consolidation to Balance State Budget

By Sean Whaley | 6:40 am August 11th, 2010

(Updated at 6:50 a.m. on Aug. 11, 2010)

CARSON CITY – Democrat gubernatorial candidate Rory Reid told the Nevada News Bureau yesterday there are other options for moving the state out of its current budget crisis besides increasing taxes and cutting programs.

In an interview at a local coffee shop, Reid pulled out two pieces of paper. One showed an organization chart for the state’s public education system from 1989. The other shows how it looks now.

The newer chart showed many more layers of government, including advisory panels, legislative committees and other bureaucratic creations that have evolved over the past 20 years.

Reid said the two charts demonstrate one way Nevada can save several hundred million dollars: by streamlining government services to eliminate redundancies and inefficiencies in state government.

Reid, who is trailing GOP candidate Brian Sandoval in the polls, said he has experience balancing budgets as chairman of the Clark County Commission, budgets that are as big as the Nevada general fund budget.

“I know how to do this,” he said. “I’ve balanced it in good times and in bad for seven years running without new taxes. There are more than two options. The third option nobody talks about is to remake our government.”

Clark County had multiple housing authorities at one time, but Reid said he worked to consolidate them into one agency. There used to be multiple public health agencies, now there is one.

Reid did not back off his no new taxes stance, saying the state unemployment rate, the foreclosure crisis, and the overall economic situation in Nevada makes the idea of expanding such levies a nonstarter.

“We need a leader in Carson City that knows how to reform government structures,” he said. “If we do what needs to be done, we will save hundreds of millions of dollars and still maintain services by reforming our government.”

Reid said he will be putting out a proposal in the next several days addressing this issue in more detail.

Reid said Sandoval is offering no realistic solutions, instead saying he will avoid layoffs, protect vulnerable citizens and government services and still balance the budget.

“That is impossible,” Reid said.

The Sandoval campaign offered this response: “As a two-term legislator, an attorney general who returned money to the general fund and as a private law practitioner, Brian is proud of his budget experience. It’s curious that just a few months ago Rory Reid refused to say how he might balance the state’s budget.  Now he’s attacking Brian – the only candidate to lay out how he would have approached balancing our state’s short term budget deficit without mass layoffs or new taxes.”

Reid weighed in on the state’s budget problems as state Budget Director Andrew Clinger has spoken in recent days of the severity of the impacts facing Nevada when the Legislature convenes in February.

Clinger said the state is facing an estimated $3 billion shortfall in the revenues needed to sustain state government for the next two years, or nearly 50 percent of what would be a $6.5 billion general fund budget.

On Monday Clinger said new taxes might be avoided if the state and counties worked together to more efficiently divvy up the delivery of government services and the revenues used to pay for them.

Even so, both Sandoval and Reid have steadfastly rejected any notion of raising taxes as a partial solution to the state’s budget problems.

In an interview today on the KRNV Channel 4 noon news, Senate Minority Leader Bill Raggio, R-Reno, said he would not reject out-of-hand the idea of new or increased taxes as one option to solving the state’s budget crisis.

“There is no question that we are facing a very severe problem, the largest shortfall in our history,” he said. “We did take money from counties last time, cities and counties, and there is a bottom to that well also.

“No one wants to advocate raising taxes, or new taxes,” Raggio said. “We will probably have to look at restoring the taxes that are going to sunset. But I don’t think anybody should take a blood oath that we’re not going to look at that.”

Raising taxes is a last resort, he said.

“But I wouldn’t take it off the table,” Raggio said.

The 2009 Legislature raised the sales tax and the modified business tax on the state’s largest employers as part of a solution to balancing the current budget. Those taxes will expire on June 30, 2011 unless they are extended by the Legislature.

Reid said there is one other way that Nevada can get out of its budget crisis, and that is “growing” out of it through economic development. There are $5 billion worth of energy projects getting close to construction that will generate construction jobs and tax revenues to the state, he said.


Audio clips:

Rory Reid says the state can save millions by remaking an outdated state government:

081010RoryReid1 :17 21st century economy.”

Reid says he has experience in reforming government structures:

081010RoryReid2 :15 reforming our government.”

Reid says Sandoval promising more than he can deliver:

081010RoryReid3 :23 that is impossible.”

Budget Director Says Major Changes Needed To Fund Government Services

By Sean Whaley | 4:12 am August 10th, 2010

CARSON CITY – Nevada could find a way out of its $3 billion revenue shortfall next year without raising taxes, but only if the Legislature looks at restructuring the way the state and local governments provide and pay for services, the state’s top fiscal officer said yesterday.

State Budget Director Andrew Clinger, interviewed Monday on the Nevada NewsMakers television program, said the Legislature would also have to consider changes to the state’s collective bargaining law to get a handle on local government salaries, which he called “unsustainable.”

“I think there is a way to do it without raising taxes but you’re talking about some radical changes,” he said. “And I think the only way . . . to do it without raising taxes is you need to look at not only state government but you have to look at local government.”

Clinger said Nevada state government spends less money on its programs than other states. But when local government is added into the mix, the state falls into the middle of states on spending on government programs per capita.

The budget discussion in the upcoming legislative session would have to involve the potential shift of services between the government entities along with the revenues that would pay for them, he said.

In Nevada, property taxes pay for public education and local government but not state services. Sales and gaming taxes, along with the modified business tax and several other levies, are the revenues that fund state general fund government operations.

Clinger did not offer any specifics about what types of programs might be shifted as part of any realignment.

But Clinger said he does not see how the state’s potential $3 billion shortfall, which would approach 50 percent of what Nevada government needs to operate, from education to prisons, could be addressed solely with cuts at the state level.

The only program he mentioned during the interview was Nevada Check Up, a program funded by the state and federal government that provides health insurance to just under 22,000 low-income children who are not eligible for Medicaid. The program is costing the state general fund about $10.8 million this year. Another $25.4 million is coming from the federal government, funding that would be lost if the program was eliminated.

Clinger said the state’s collective bargaining statutes would also have to be part of any discussion by the governor and Legislature with local governments.

Clinger said the last surveys he reviewed showed state salaries about 7 percent ahead of the private sector, while local government salaries were running about 30 percent ahead of the private sector.

“You would have to open up the collective bargain statutes and make some changes there that could help sustain government moving forward because at those salary levels it is not sustainable,” he said.

State employees do not have collective bargaining rights in Nevada, although local government employees and teachers do.

Clinger said the $3 billion shortfall out of a two-year, $6.5 billion general fund budget can be partially addressed by actions the governor and Legislature can take on their own. State employee furloughs and benefit reductions, for example, could be continued for two more years at a savings of about $500 million, he said.

Much of the state budget shortfall is due to tax increases approved by lawmakers in 2009 that will expire unless extended, and the loss of future federal stimulus funds.

Assemblywoman Sheila Leslie, D-Reno, said she has heard concerns expressed by local government officials that there might be an effort to transfer state services to the local level.

“I have talked to several county commissioners who are quite concerned,” she said. “I think those discussions should be happening now if they are going to happen. I haven’t seen anyone organize a formal discussion.”

Leslie, who is running for an open seat in the state Senate, said she has heard there might be a list of programs that could be eliminated entirely or that could be potentially transferred to local government. But the counties do not have any surplus funds they could infuse into state programs if a transfer occurred, she said.

With a new governor coming in January and the two leading candidates for the job rejecting any call for new taxes as a solution to the state’s budget problems, not to mention a major turnover in the Legislature with the departure of long-time leaders, “we’re in a very tenuous spot,” Leslie said.

Clark County Commissioner Chris Giunchigliani, a former state lawmaker, said a discussion of which level of government should provide what services is worth having, but she questioned whether it would deliver enough savings to make a significant difference in the state’s budget shortfall.

“I don’t think you can cost shift your way out of the budget problems,” she said.

Giunchigliani said the Legislature should take a look at the study on broadening the state’s sales tax base by the Nevada Policy Research Institute as a starting point for a conversation on the state’s revenue structure.

While not in support of taxing food or medical devices, the study looks at spreading the sales tax over a wider base while at the same time reducing the overall rate, she said.

“It gives the Legislature something to take a look at, and local governments should weigh in,” Giunchigliani said.

Ben Kieckhefer, public information officer for the Nevada Department of Health and Human Services, which operates the Check Up program, said the trend his agency has seen is counties transferring programs to the state when possible due to funding concerns.

One recent example is the state having to pick up elder protective services from Clark County, which occurred on July 31, he said.


Audio clips:

State Budget Director Andrew Clinger says local governments would have to be involved in plan to balance state budget without new taxes:

080910Clinger1 :31 to other states.”

Clinger said a shift of services and funding between state and local government would be needed:

080910Clinger2 :24 sorts of things.”

Clinger says the state’s collective bargaining law would have to be part of the discussion:

080910Clinger3 :30 it’s not sustainable.”

Nevada Budget Director Paints Grim Picture

By Sean Whaley | 7:35 am August 6th, 2010

CARSON CITY – State Budget Director Andrew Clinger yesterday painted a bleak picture of Nevada’s next two-year spending plan, saying under current tax and spending levels every single program and agency except for education would have to be eliminated to balance the budget.

“You could eliminate everything, and have nothing but K-12 and higher ed, and you would have a balanced budget,” he said. “So the magnitude of the problem that we face, or the challenge that we face going into the next biennium, is huge.”

Higher and lower education together make up about 55 percent of the state budget each year.

The state appears to be at least $3 billion short right now on what is expected to be a $6.5 billion two-year general fund budget, or about 46 percent less than what is required, Clinger said.

As a result, the Gibbons Administration has embarked on a fundamental review of state programs to determine what services can be continued and which ones may have to be eliminated, he said.

“Is there a better way to do it, is there a different way to pay for it, or is it a service you simply no longer provide,” Clinger said.

The revenue shortfall is due to myriad factors, including:

- Tax revenues coming in far below the levels seen in prior boom years;

- About $1 billion in temporary tax increases approved by the 2009 Legislature that are set to expire next June 30;

- The loss of one-time federal stimulus funds that have helped balance the current budget;

- The elimination of employee furloughs and restoration of employee benefits that were cut in 2009 to balance the current budget. Ending furloughs and restoring benefits would cost about $500 million.

The Legislature can decide to extend the expiring tax increases or look to alternative tax increases, and it can also extend the furloughs and benefit cuts as ways to cut into the shortfall in the 2011 legislative session, Clinger said.

The 2009 Legislature temporarily raised the sales tax by 0.35 percent and nearly doubled the modified business tax on the state’s largest employers to help balance the budget. The tax was reduced for smaller employers.

Any tax increase or continuation would require a two-thirds vote in each house of the Legislature. Neither of the two major party candidates for governor has gone on record as supporting tax increases as a way to balance the budget.

“This is a challenge that this state has never faced before,” Clinger said.

The comments came as the Public Employees’ Benefits Program Board began to look at ways of saving $111 million in the health insurance program for state employees and retirees, made necessary because of the state’s budget problems. The board considered raising deductibles and cutting benefits to reach the target. The plan is not expected to see any taxpayer-paid funding increases in the two-year budget that will begin July 1, 2011.

Jim Wells, the executive officer overseeing the program, yesterday told the board it must make decisions on how to best make the cuts because the preliminary budget is due to Clinger’s office by Sept. 1.

“We do need to make some relatively significant decisions today,” he said.

Clinger said that as a percentage basis, Nevada is in worse fiscal shape than any other state in the  nation.

Nevada is collecting the same amount of sales tax right now as in 1999, adjusted for inflation, he said. This despite large population increases since that time, Clinger said.

“I hope at least January of this year represents the bottom of this, and we’re starting to grow,” he said. “Even though revenues are doing better it’s not going to bring us out of this hole we are in anytime soon.”

Gaming revenues, unlike in previous recessions, have also been hurt in this economic slowdown that some are calling the Great Depression, Clinger said.

For the 12 months ending in May 2010, casino revenues were down nearly 5 percent compared to the same period a year previously. And for the 12 months ending in May 2009, revenues were down nearly 13 percent from the same period in 2008.

Another way to see the effect is to look at the amount casinos take in each year per visitor.

“We are at historic lows on the amount the casinos win per visitor, $170 per visitor,” he said.

The figure also is inflation adjusted, and reflects the amount casinos take in, or win each year, divided by total annual visitors. The $170 figure puts Nevada below any prior low seen in records dating back to the late 1970s, Clinger said.

The two revenues make up the majority of the state’s annual general fund budget.


Audio clips:

State Budget Director Andrew Clinger says budget situation is dire:

080410Clinger1 :40 face is huge.”

Clinger says that is why a fundamental review of the budget is under way:

080510Clinger2 :23 afford to provide.”

Nevada Transparency Website Still Missing Contract Information, Searchable Functions

By Sean Whaley | 9:42 am July 15th, 2010

CARSON CITY – Nevada’s transparency website, where taxpayers can go to examine details of spending by state agencies, still does not include a critical component that would make the information more useful.

Budget limitations have put a plan to put contract information on the site in a searchable format on hold, said state Budget Director Andrew Clinger.

In the meantime, contracts approved by the Board of Examiners at each meeting are being posted on the Department of Administration’s website, he said. Because the information is in a PDF format however, it is not searchable, Clinger said.

But the information, which now includes descriptions of the contracts, the source of funding for the contract, and whether it is a sole source contract, is available for review, he said.

“Without additional funding at this point I’m not sure when we will be able to have the contracts posted in a fashion that is searchable and those types of things that make it even more transparent,” Clinger said. “It is still on our list of priorities. It just depends on the funding in the next session.”

The contracts approved by the Board of Examiners are also posted by the Nevada Policy Research Institute at its TransparentNevada website. The contracts are searchable by contractor, state agency or description going back to January of this year.

Gibbons issued a proclamation in March of 2008 requiring the creation of a transparency website “as soon as practicable.”

Called the Nevada Open Government Initiative, the proclamation specified the need for an “easily searchable database of financial transactions related to government budgets and expenditures . . .”

The site is up and operating and includes a searchable database where taxpayers can delve into detail showing actual payments to vendors.  Searches can be performed by vendor name or by agency.

It has been criticized in the past by some for not being complete.

In a study grading the states on their transparency efforts on government spending released by the U.S. Public Interest Research Group in April, Nevada received a C and is listed as one of 25 “emerging states” with transparency websites that provide less comprehensive information.

Seven states: Kentucky, Ohio, Illinois, Minnesota, Texas, Missouri and Pennsylvania, received As and Bs.

But Nevada was not far behind, earning a 78 score out of 100 and coming in at 10th in the rankings.

Nevada is identified in the report as being one of 25 states with “checkbook-level transparency allowing viewing of individual government transactions, akin to viewing the government’s checkbook.”

Two areas where Nevada failed to score well were related to contracts. Nevada received five of 10 points for the posting of contract information, and zero of five points for the posting of past contracts. Nevada’s site was penalized because the actual contracts cannot be viewed.

Contract information is a failing for most state websites, according to the study.

“Most transparency websites do not provide enough detailed information on government contracts. Even some of the leading websites provide only a short description (two to three words) of the purpose of the contracts.”

Nevada’s contract information is inconsistent, with some descriptions lengthier than a few words and others briefer. But the information has not yet been posted or linked to the governor’s transparency website. Instead it is found on the Department of Administration’s website.

The difficulty in finding information was another failing of many sites according to the study.

“Transparency websites should be one-click searchable,” the study said. “Residents should be able to search data with a single query or browse common-sense categories. Websites should also let residents sort data on government spending by recipient, amount, legislative district, granting agency, purpose, or keyword.”

“The good news is that state governments have become far more transparent about where the money goes,” said Phineas Baxandall, senior analyst for tax and budget policy at U.S. PIRG and co-author of the report. “But even the leading states have a lot of room for improvement.”


audio clips:

Nevada Budget Director Andrew Clinger says some contract information is now available:

071410Clinger1 :26 on our website.”

Clinger says the Legislature will have to provide funding for a searchable contracts database:

071410Clinger2 :21 data they want.”