Guinn tells state agencies to hold 2003-05 spending

Tuesday, Feb. 19, 2002 | 10:52 a.m.

CARSON CITY -- With the economy struggling, Gov. Kenny Guinn has ordered state agencies to prepare flat budgets for the 2003-05 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 review them and meet with the governor, who will decide what, if any, new programs he might recommend.

"We're squeezing down on this," Guinn said.

The order comes as a Guinn-appointed task force examines the state's finances and its tax structure. Led by Guy Hobbs, the commission is charged to report by Nov. 15 how much revenue the state will need in the future and recommend ways the state can raise the money.

The latest report to the task force showed a state deficit of more than $800 million if revenues don't keep pace with growth.

The commission's recommendations, which could include new taxes or raises in current taxes, will be considered by the 2003 Legislature.

Guinn noted he gave the same orders two years ago, and submitted budget in February that showed no growth. The Economic Forum later predicted more money would be coming in than originally expected, so Guinn and the Legislature were able to allocate more money.

Now the word again is to tighten down. Guinn has imposed a hiring freeze, and he is holding off on some approved projects until it's clear where the economy is going.

Comeaux said the 2003-05 budgets would permit increases for such things as growing school enrollment, more Medicaid cases and increases in the prison population. Nothing else can be done in those cases, the budget director said.

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.

However, teachers union representatives expected the order not to affect teacher raises approved in the last Legislature.

Increases of 4 percent for teachers in 2003 and 2005 were approved during the past legislative session and signed by the governor, said Debbie Cahill, executive director of the Nevada State Education Association.

The automatic salary roll-ups are protected and will not be affected by the flat budget, Cahill said.

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.