State agencies to seek 32 percent budget hike

Wednesday, Oct. 16, 1996 | 11:59 a.m.

CARSON CITY -- State government is financially healthy, so there won't be any request from the 1997 Legislature for a tax increase. But there probably won't be any tax cuts either.

State Budget Director Perry Comeaux estimated Tuesday that there will be a surplus of $100 million to $200 million available for spending on one-time projects.

The surplus pales in comparison to what state agencies propose to spend in the 1997-1999 state budget -- $10.4 billion, a 32 percent increase over the current budget of $7.8 billion. An increase of that magnitude likely will not happen, as state budget officials, Gov. Bob Miller and the Legislature will pare down the requests.

The initial requests by agencies, however, is indicative of the state's financial need, which means it's unrealistic to think any of the surplus will be returned to taxpayers.

"We've got prisons and university buildings to build," Comeaux said. "And we have to replace aging technology that will cost hundreds of millions of dollars."

A 1,000-bed prison planned for Indian Springs, for example, will cost $73 million. And it could cost up to $36 million to cure the year 2000 problem, in which all state computers have to be reprogrammed in order to read double zeros in dates.

Comeaux said initial requests from agencies will be trimmed by at least $600 million but added that the budget will try to accommodate the growth in prisons, public schools and the University and Community College System of Nevada.

Public schools will grow by at least 12 percent, Comeaux said, requiring an extra $130 million even before inflation is considered.

"We may be better off than a lot of states, but we're not fat by any means," he said.

Comeaux said he hopes the proposed budgets from the individual agencies will be finalized by his office by the end of November. The departments will then have a chance to appeal to his office and to Miller. Two years ago, only the university system and the public schools sought appeals to the governor.

In addition to the surplus, there will be a $130 million fund that will be used only in the event of an economic downturn. Another $90 million will be held in reserve to handle the state's cash flow.

Comeaux said he hopes to have Miller's executive budget finished by the end of December and to the printer for presentation to the 1997 Legislature on Jan. 23, the day after the governor's State of the State message.

The Economic Forum, a panel of five lay people, is set to meet Tuesday to start its projections on how much tax revenue will be available in the two fiscal years for the state. Comeaux's own projects are $2.9 billion to $3 billion. He thinks the forum will be slightly more conservative. Comeaux and the Legislature must follow the estimates of the forum.

Comeaux is starting to trim budgets to fit within that estimate.

Among those things to be decided is a pay raise for state workers, teachers and faculty at the universities and community colleges. The state Board of Education has recommended a 3 1/2 percent raise each of the next two years for public schoolteachers. The regents of the university system are proposing a 6 percent raise the first year and 4 percent the second year for faculty. Both agencies included those raises in their budgets.

But other state departments did not put in for any increase. The State of Nevada Employees Association wants a 9 percent raise in July 1997 for state workers and a cost-of-living increase in July 1998.

Comeaux said each percent of increase costs taxpayers about $15 million. So if Miller recommends a 3 percent pay raise, it will cost $45 million the first year and $90 million the second year.

Welfare and Medicaid are other unknowns. The number of welfare recipients is decreasing. And the fast rise in Medicaid has stalled. But Comeaux said nobody knows what's going to happen with the new federal welfare reform in effect.

"We could end up in a real pit," he said.

Of the total budget, about $3.5 billion -- the general fund -- would come from state taxes, with the balance coming from federal sources. From the general fund, about $1.9 billion is destined for education.

Human resources, which includes welfare, health, Medicaid and child services, is asking for $944.6 million, up from the current $645.8 million. Public safety, which includes prisons, is seeking $375.2 million, up from the current $185.3 million.