Guinn tells agencies to plan flat budgets

Tuesday, Feb. 19, 2002 | 9:12 a.m.

CARSON CITY -- With the economy struggling, Gov. Kenny Guinn has ordered state agencies to prepare flat budgets for the 2003-2005 biennium "because we have no other choice."

"We're going to get through this (fiscal) year pretty good, but I'm worried about the next fiscal year," Guinn said. He sent out the word last week.

State Budget Director Perry Comeaux said Monday state departments have been directed to take the legislatively approved budget for the next fiscal year, which begins July 1, and simply double it for the coming biennium.

This will mean agencies will hold the line on any new programs. The agencies are to submit their proposed spending programs to Comeaux on Sept. 1. The budget director will then review them and meet with the governor, who will decide what, if any, new programs he might recommend.

"We're squeezing down on this," said Guinn, who noted he gave the same orders two years ago.

After Guinn submitted his budget in February 2001, the Economic Forum predicted more money would be coming in than originally expected, prompting Guinn and the Legislature to allocate more money.

Guinn has imposed a hiring freeze and is holding some projects to see where the economy is going before spending the money.

Comeaux said the 2003-05 budgets would permit increases for such items as growing school enrollment, more Medicaid cases and increases in the prison population.

But the flat budget doesn't take into account any pay raises for state workers, university faculty or school teachers in 2003. The pay increases already approved for state workers this July appear to be safe.

In addition, the state will probably have to pour more money into the employees health insurance program to keep pace with medical inflation in the next biennium.

The general fund budget for next year is $1.97 billion, a 7.8 percent over this fiscal year's budget.

The state Taxation Department is expected this week to release the sales tax collections for December, which include the Christmas shopping season. As of the end of November, sales tax receipts came in 3.8 percent higher than last year. But the Economic Forum predicted a gain of 6.1 percent this year.

As of the end of December, the casino tax produced 3.3 percent less than the same period of the prior year.