Medicaid to get chunk of $105 million

Friday, April 30, 1999 | 11:18 a.m.

CARSON CITY -- There's going to be an extra $105 million in tax collections in the next 2 1/2 years, but Nevadans should not expect any tax break and state workers won't be getting a pay raise.

More than 40 percent of the added money is ticketed for Medicaid to provide medical care for the poor and for the state Welfare Division's failed computer system.

The Economic Forum, a group of five financial experts, made its official forecast Thursday, predicting there will be $39.1 million more in tax revenue this fiscal year; $37.8 million next year and $31.6 million the following year.

The estimates are an update of the ones made in December when it appeared the state was in for some tough economic times.

Nevada has a strong economy and it "will continue to be a strong state." The forum is predicting a 3.7 percent increase in general fund revenue next fiscal year and 3.5 percent the following year, forum Chairman Steve Greathouse of Las Vegas said.

Gov. Kenny Guinn, Senate Majority Leader Bill Raggio, R-Reno, and Assembly Majority Leader Richard Perkins, D-Henderson, all said part of the extra money will have to be invested in Medicaid and in Nomads, the $95 million computer system of the welfare division that hasn't produced its first report in 10 years.

Guinn's Chief of Staff Pete Ernaut said $35.1 million must be invested this fiscal year in Medicaid. And another $4 million must be allowed for the program in fiscal 2000.

Guinn wants $4.3 million to pay the fines being imposed by the federal government for the welfare system not meeting deadlines in its computer development. He wants another $4.6 million to train staff and to transfer county records into the computer.

When he proposed his $3.2 billion budget, Guinn said any extra money should go to pay raises for state workers and for boosting property tax rebates for senior citizens.

Medicaid and Nomad reached crisis proportions, and these others things had to be jettisoned, Ernaut said, adding that the governor wanted to help pay the retirement premiums of state workers to the tune of about $5.5 million a year. The proposal was rejected by Bob Gagnier, director of the 4,500 member State of Nevada Employees Association.

Guinn wants to spend $21.6 million of the extra $34 million next year and $22.7 million of the added $31.6 million in fiscal 2001.

"There's not a lot of wiggle room with these numbers," Raggio said, referring to the $105 million.

There does not appear to be any money to address the equity problem at the University and Community College System of Nevada, where southern schools are being shortchanged, he said.

The extra money must be used to fill the more than $150 million in cuts in the budget by Guinn, Perkins said, noting that Clark County School Superintendent Brian Cram, for example, has made a good case for restoring $7 million a year to the school aid budget statewide.

The Legislature has got to help the university and community college system keep up with growth, Perkins said. There is only enough in the Guinn budget for a 2 percent increase in enrollment. The schools expect 6 percent more students.

The economic forum made its forecast in December of $1.472 billion in revenues this year, $1.532 billion next fiscal year and $1.591 billion the following year. It's updated predictions call for $1.512 billion this fiscal year, $1.567 billion next year and $1.622 billion the following year.

The governor and Legislature must follow the forum's projections in building the budget.

The forum adjusted its numbers upward because of growth, particularly in Southern Nevada, in gaming tax and sales tax revenues from Las Vegas, which rebounded in the past few months. Greathouse said the room occupancy rate has risen despite the addition of added room in new Strip casinos. And he said the rates are higher for the rooms.

The forum walked a middle ground between Guinn's budget office, which estimated there would be $71.5 million extra and the fiscal staff of the Legislature, which predicted $137.2 million more in revenue.

While there is the extra $105 million, there is more than $200 million in requests, outside what Guinn and the legislators are talking about.

Other Guinn priorities call for spending $4 million extra each year to help with growth at the university system; $9.2 million to buy textbooks in the public schools; $2.2 million a year to create an internal audit staff for state government and $1.6 million to start to pay a court settlement to University Medical Center in Las Vegas.

The decision by the economic forum clears the way for the Senate and Assembly budget committees to start making the major decisions in the 1999-2001 budget. So far both committees have been approving the smaller less controversial budgets.