Posts Tagged ‘IFC’

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.


State Officials, Lawmakers Reject Claim That Transfer Of Funds To Scholarship Program Was Improper

By Sean Whaley | 4:21 pm July 28th, 2011

CARSON CITY – State officials and lawmakers are rejecting the suggestion that they acted improperly last year when fees generated from several college savings programs were shifted to shore up the cash-strapped Gov. Guinn Millennium Scholarship for academically eligible Nevada high school graduates.

But one former lawmaker, who voted for the transfer, acknowledges he remains concerned about the decision.

The Legislature’s Interim Finance Committee voted in July 2010 to transfer $4.2 million in fees from the college savings programs to the Millennium Scholarship to ensure eligible college students would get full reimbursement for classes they took last year.

The College Savings Board had previously voted to use the money for other purposes, including support for the Nevada Prepaid Tuition program, a separate fund managed by the Treasurer’s Office for Nevada families to save for college within the Nevada System of Higher Education.

The transfer was unanimously approved by the 21 members of the IFC after lawmakers were told the fees to be used to shore up the scholarship fund would not affect participants or their investments in the separately managed college savings programs. The fees are paid by families investing in the various college savings plans to brokers, who in turn remit a portion of those fees to the state Treasurer’s Office.

Just over 471,000 college savings accounts, most of them from out-of-state residents, have been opened in the four programs offered through the state Treasurer’s Office as of March 31, 2011. Just over 7,000 Nevadans are enrolled in the programs and they do not pay any fees for participating.

The Nevada Policy Research Institute, a conservative Nevada think tank, on Wednesday published an article by Steve Miller suggesting that the shift of funds was illegal and that Nevadans participating in the Prepaid Tuition program may now have grounds to sue the College Savings Board because of the IFC vote.

Miller, vice president for policy at NPRI, cited a “nationally experienced securities attorney,” who was consulted on a confidential basis for the conclusions in his article.

“Because the Prepaid Tuition program was damaged by the IFC action — made financially weaker than it otherwise would have been — investors in the program would have legal standing against the program, said the attorney, who was consulted on a confidential basis,” he said in his article.

The Treasurer’s Office rejected the notion that the Prepaid Tuition program was harmed by the IFC action.

In a press release issued Thursday, state Treasurer Kate Marshall said the Prepaid Tuition program is funded at 108 percent.

“The program is solid, as demonstrated by the dramatic increase in the funded status and a 15 percent increase in new contracts totaling 594 in 2011,” she said.

Nevada State Treasurer Kate Marshall

Steve George, chief of staff for Marshall, said the article did not indicate that the IFC vote to transfer the funds was unanimous. The College Savings Board did not object to the transfer at its August meeting following the IFC vote either, he said.

“Treasurer Marshall and this office had worked for months to try and come up with some solution that might work to keep the Millennium going forward to the next legislative session,” he said. “That was accomplished by that move, and that’s why I made the comment that this is something that works for the Millennium, and it also does not harm college savings and prepaid.”

Even with the $4.2 million transfer to the Millennium Scholarship, the College Savings Board has transferred nearly $1.56 million over the two past fiscal years to the Prepaid Tuition Program, George said.

Sen. Mo Denis, D-Las Vegas, said he believes the article unfairly singled out Senate Majority Leader Steven Horsford, D-Las Vegas, for criticism. Horsford was co-chairman of the IFC at the time. The IFC is composed of the Legislature’s two money committees.

“I believe that we were making the best decision based on the information that was available to us and our legal counsel,” he said. “And so I think we all did it together and we did something that we thought was appropriate that we could do and legal counsel said we could do it.”

The transfer was needed to ensure kids received their Millennium Scholarships, Denis said.

Minutes of the July 21 special IFC meeting show that lawmakers were told the shift of funds was legal by Chief Legislative Counsel Brenda Erdoes.

Sen. Joe Hardy, R-Boulder City, said he believes the transfer was both lawful and appropriate.

“I think that not only was it legal, but it kept students, who anticipated getting tuition money, in college,” he said.

But Hardy said he does not take issue with a watchdog group keeping an eye on the activities of the Legislature.

The allegation that lawmakers may have acted improperly has political implications.

Horsford is rumored to be considering a run for Congress in a seat as yet undefined due to a legal dispute over the required redistricting process.

Senate Majority Leader Steven Horsford, D-Las Vegas.

Horsford declined to comment on the NPRI article.

Marshall, a Democrat, is also running for congress in a special election in the vacant 2nd Congressional District against former state Sen. Mark Amodei, R-Carson City.

Miller also quotes former long-time state Sen. Bill Raggio, R-Reno, as questioning the appropriateness of the transfer, but does not point out that Raggio “reluctantly” voted for the shift.

Raggio said the article accurately describe his concerns, which remain even with the advice from legal counsel. Funds held in trust should be used for the purposes specified, he said.

“Lawyers can differ, and even though Brenda said so at the time, there is always a question,” Raggio said. “And I wouldn’t be surprised if someone did challenge it.”

Miller said today he focused on Horsford in the article because the lawmaker was the point man pushing for the transfer. The unanimous IFC vote wasn’t included because lawmakers often rubber stamp such requests, he said.

Miller said he decided to run the story based on the one attorney’s comments because of the individual’s credibility. As a result of the article Miller said he has received a comment from one Nevada attorney about the potential for challenging the shift of funds.

The Millennium Scholarship is named for the late Gov. Kenny Guinn, who created the program in 1999 with legislative approval.

Gov. Brian Sandoval recommended adding $10 million in general funds to the scholarship in the 2011 legislative session, which was approved. The scholarship is now believed to be financially whole through at least 2015. It was originally intended to be fully supported by money from a tobacco company settlement, but those funds have declined annually due to lower smoking rates.

Audio clips:

Treasurer’s Office Chief of Staff Steve George says the vote by the IFC kept the scholarship program whole without harming the college savings or prepaid tuition programs:

072811George1 :23 savings and prepaid.”

George says the Prepaid Tuition Program is financially sound:

072811George2 :27 to go forward.”

Sen. Mo Denis says lawmakers made a unanimous decision based on the best information available:

072811Denis1 :20 could do it.”

Sen. Joe Hardy says the vote was legal and kept kids in college:

072811Hardy1 :19 stay in college.”

Hardy says he has no problem with watchdog groups keeping an eye on lawmaker activities, however:

072811Hardy2 :17 doing what’s right.”

Former Sen. Bill Raggio says he would not be surprised if someone does challenge the transfer:

072811Raggio1 :12 did challenge it.”

NPRI’s Steve Miller says he focused on Horsford in the article because the lawmaker was the point man pushing for the transfer:

072811Miller1 :32 some political power.”



Lawmakers and Governor Continue to Look for Solutions to Massive Budget Shortfall

By Sean Whaley | 7:16 pm February 18th, 2010

CARSON CITY – As Gov. Jim Gibbons and lawmakers continued to work today toward a plan to balance the state budget, a number of potential solutions were called into question during a hearing today.

Ideas to reduce the deductions available on the net proceeds of minerals tax to raise $50 million, collect as much as $100 million in unpaid taxes owed to the state and expand sales tax collections on internet sales all were questioned by some lawmakers, administration officials and industry representatives.

But new potential solutions were also brought forward at a meeting of the Legislature’s Interim Finance Committee, including a suggestion to make more state agency operations self-sufficient by increasing industry fees, which would free up general fund revenue to reduce the level of cuts now being contemplated for education and state programs.

Another proposal is to establish a new tax amnesty program to bring in additional revenue to offset budget cuts.

Senate Minority Leader Bill Raggio, R-Reno, proposed an auction of state buildings in exchange for a long-term upfront lease agreement fee, saying it could bring in $250 million quickly to help with the shortfall. He said between $200 million and $300 million in cuts proposed by Gibbons to balance the budget are not doable.

Buildings would be appraised and perhaps auctioned off in a single day with the lease agreement fee, calculated over a 20-year period, being paid in full at that time by the successful bidder, he said. The state would then make payments back to the successful bidder during the time of the lease agreement, Raggio said.

“We’re not selling these buildings,” he said. “We would be leasing them out at a fixed amount of payments over a period of time. At the end of the 20-year term, the state would again take back the building.

“It’s not a perfect solution but it is certainly a concept that I think is worthy of at least consideration,” Raggio said.

He noted Arizona recently completed such a process and brought in more than $700 million.

Assembly Minority Leader Heidi Gansert, R-Reno, also supported taking a look at the concept, saying the current budget balancing plan has a lot of holes.

Gibbons and lawmakers are working to come up with a bipartisan solution to an $888 million budget shortfall. Lawmakers are scheduled to begin a special session Tuesday to address the fiscal crisis.

Raggio questioned the suggestions that more tax revenue could be generated by collecting unpaid taxes or by increasing internet sales tax collections. He called some of the budget proposals put forward by different interests as “smoke and mirrors.”

“I’m not going to be part of a process that plugs in something that is unrealistic,” he said.

Dino DiCianno, executive director of the Department of Taxation, said much of the $100 million in taxes owed to the agency cannot be collected because of bankruptcies and other factors. The suggestion was not one of Gibbons’ proposals to balance the budget.

“We will never be able to capture that money,” he said. “Especially with respect to debt that has been discharged by a court. It is truly written off. It is gone.”

Budget Director Andrew Clinger said he has not put a figure on what potentially could be generated from improved internet sales tax collections because there is too high a level of uncertainty surrounding the issue.

And mining industry representatives also testified before the Legislature’s Interim Finance Committee, saying they are willing to help in the current fiscal crisis but that Gibbons’ plan to change the rate of deductions allowed for the minerals tax is a non-starter.

Political consultant Pete Ernaut, representing the Nevada Mining Association, said the industry is willing to help, but Gibbons’ plan to change the deductions on the net proceeds is unacceptable to the industry.

“We understand the number that you all are shooting for, and we’re doing our darn best to get there,” he said.

Assembly Speaker Barbara Buckley, D-Las Vegas, advocated both for a new tax amnesty program and a shift to make more state agencies self sufficient through the use of fees rather than general fund support.

She asked Dennis Neilander, chairman of the Gaming Control Board, if a fee increase of some level could be put in place by July 1 if authorized by the Legislature. The gaming agency received $31.7 million in general fund support in fiscal year 2009.

Neilander said such a timeline could be accommodated. He could not comment on what size of a fee increase would be feasible, noting that the gaming industry is suffering in the current economic slowdown like all other sectors of the economy.

Buckley said such fees should be considered by all regulatory agencies and programs, from the Labor Commissioner to the Equal Rights Commission, to free up general fund money for education and other critical programs.

Legislative Panel Delays Selection of Consultant for Revenue Study

By Sean Whaley | 3:17 pm October 7th, 2009
CARSON CITY – A legislative panel today decided to seek clarifying information before selecting a proposal to study Nevada’s revenue structure.

Eight proposals were submitted by an Oct. 1 deadline from organizations both within Nevada and across the country.

However not all of the proposals, which range in cost from $32,200 to $909,861, were complete in providing all of the information sought by a working group of the Legislature’s Interim Finance Committee. Lawmakers directed staff to seek itemized costs for six of the eight proposals that did not provide the details.

The panel will meet again Oct. 15 to move forward, either by selecting one proposal or by ranking them in order of preference for the full IFC to consider.

Senate Minority Leader Bill Raggio, R-Reno, chairman of the working group, said he would prefer to recommend a single proposal, although that decision will be made by the entire eight-member panel, five of whom are Democrats.

A tax and revenue study is needed, but it must be free of bias if it is to serve any useful purpose, he said.

“There have been a lot of studies, but they all have some special interest that is funding them or directing them, and that is what I don’t want to see,” Raggio said. “I want to see an objective study that has at least some credibility.”

The decision by the Legislature to study the tax issue does not automatically mean there will be a push for a tax hike in 2011, Raggio said. But the next Legislature will face enormous challenges, given the fact that a $2.4 billion funding shortfall over the current budget has already been identified, he said.

The shortfall estimate is derived from a variety of factors, including tax increases approved in 2009 that are set to expire in 2011 and one-time federal stimulus funding that won’t continue into the next budget cycle.

The legislative working group did recommend that no more than $500,000 be spent on the study, but Senate Majority Leader Steven Horsford, D-Las Vegas, also a member of the working group, said the decision ultimately will rest with the full 24-member IFC.

The working group can negotiate with any of the submitters to bring the cost down, he said. There are also a number of proposals below $500,000 from contractors who may very well be able to produce the type of study lawmakers need to move forward.

“This is not an exercise in spending money,” Horsford said. “We want to pick the most qualified contractor who can evaluate our options for the upcoming legislative session.”

The costliest proposal was submitted by the Center for Regional Studies at the University of Nevada, Reno. The other proposal in excess of $500,000 was for $544,082 from the Center for Tax and Budget Accountability based in Chicago, Ill.

The Board of Examiners, made up of three executive branch officials including Gov. Jim Gibbons, will also vote on the proposal, including the contract cost, next month. But Legislative Counsel Brenda Erdoes told the working group that the IFC has the ultimate authority to determine how much should be spent on the study.

Funding for the study was rejected by Gibbons in the 2009 legislative session. The Legislature is instead using funds available in its contingency fund.

The study is required to be performed by a qualified and independent consultant and will examine the allocation of tax revenues between the state and local governments, the adequacy of revenues and the stability of different tax revenues, among other issues.

A panel of citizens, not yet appointed by the Legislature, will also participate in the study process.

A report is due to the Interim Finance Committee by July 1, 2010.