Guinn gives lawmakers peek at budget

Thursday, July 13, 2000 | 11:13 a.m.

CARSON CITY -- After paying for growth in the schools, prisons and the Medicaid program, Gov. Kenny Guinn estimates he will have $90 million available to finance pay raises for state workers and other enhancements to the next biennial budget.

Guinn gave a preview of the state's financial condition to legislative leaders Wednesday and later told reporters, "I have no intention of considering a tax increase."

Assembly Majority Leader Richard Perkins, D-Henderson, said there were no commitments made by lawmakers to any of the governor's proposals or revenue estimates during the closed-door meeting.

The next session of the Legislature starts Feb. 1. Perkins noted the state's finances can change a lot by then.

Senate Majority Leader Bill Raggio, R-Reno, said this was the first time in his 28 years in the Legislature that a governor has shared budget information with lawmakers this early.

The budget in the past, Raggio said, has always been kept secret until the governor delivers it during the first week of the Legislature.

"This is an excellent start," Raggio said. "With a 120-day session, we don't have time to fight over minutiae in the budget."

Both Perkins and Raggio said they have asked the legislative staff to analyze the figures presented by Guinn.

The governor is estimating a 2001-2003 budget of $3.7 billion, up from the current $3.2 billion with tax revenues increasing at 6 percent per year.

While Guinn said he would not propose any new taxes, he stopped short of saying he would veto any new tax proposed by the Legislature. He said he would have to look at the bill.

"I would not look favorably on any tax unless Nevada changes the way it does business," Guinn said.

Also, he said, his stand on agencies raising fees was the same as in 1999. Those people who are affected would have to approve of a fee increase. For instance, a licensing board that wanted to boost the annual registration fee would have to get consensus from those who will be paying the added amount.

State agencies were directed to present flat budgets -- the same amount of money they are spending this fiscal year for each of the next two fiscal years. The governor then added in money to handle growth in the public schools of 4.5 to 5 percent a year, enrollment growth at the universities and colleges of 6 percent to 7 percent, growth in the Medicaid budget of 9 percent and growth of about 6 percent in the inmate population.

Guinn calculated that there would be $90 million over the next two years for such things as raises by taking into account savings accomplished through increased efficiency in government. The governor said his first priority is increasing compensation for state workers, either with salary increases or other benefits.

After the session with legislators, Guinn met with Bob Gagnier, executive director of the 4,400-member State of Nevada Employees Association, the largest union in state government.

Gagnier called it a "great start" toward getting more pay for state workers. He said it was a "radical departure from the past 10 years" when his association was not privy to budget discussions so early in the game.

He said he talked with Guinn about how the money "might be best applied" in raising compensation for state workers. It costs about $4.5 million to $5 million a year to give state workers a 1 percent pay raise.

The governor stressed the state workers were the first priority. Schoolteachers, he said, can negotiate with the districts for their raises. And he said university faculty is eligible for merit raises every year.

In addition, the governor expects $150 million to be available next year for "one-shot" items. He wants to put $50 million in an education fund for textbooks, technology and continuing tutorial programs for students who test low on examinations. Another $50 million would be set aside for health, such as the troubled senior citizen drug program, long-term care and mental health programs. And $50 million would go for buildings, equipment and technology upgrades.

There is an estimated $140 million available for the state to issue bonds for construction projects, such as prisons, mental health facilities and buildings for the University and Community College System of Nevada. The university system alone wants $216 million in state aid for its construction program.

And waiting in the wings are requests to expand or start new programs costing more than $300 million.

To make his budget work, Guinn stressed the Legislature will have to give his administration flexibility.

For instance, he has told his department heads that they won't get any money for possible higher fuel costs, automatic step raises or other increased operating costs.

The agencies will have to find savings to pay for these things. And it may call for moving money around or keeping positions vacant.

His message to the legislators was, "We have to change the way we do business in Nevada." The budget committees of the Legislature have kept a close watch in the past on agencies trying to shift money around.

The governor told reporters, "When you have a $3 billion budget, don't tell me you can't make adjustments."

Guinn estimates his administration will be able to achieve $30 million in savings by changing things in the coming two years. For instance, he may again call for privatizing the medical program in the prisons, at an estimated saving of $6 million. And he may combine some programs.

By making these savings, Guinn said this money would be available for such things as pay raises.

The list of new or expanded programs would cost more than $300 million over the next two fiscal years if all were approved.

For instance, there is a proposal to increase special education funding in the public schools at a cost of $47.3 million. And there's a suggestion to spend $26.8 million to raise the amounts to doctors, hospitals and other medical personnel who provide services to Medicaid.

The governor said none of those new or expanded programs have been approved so far.

Raggio said, "When you look at other priorities, the funds are limited."

The spending for the next two fiscal years, Raggio said, will be "relatively flat."