Budget shortfalls nix extra pay raise for Nevada teachers

Thursday, May 2, 2002 | 10:23 a.m.

CARSON CITY -- The slump in state tax collections has nixed any chance that Nevada teachers will get a 1 percent or 2 percent extra pay increase next fiscal year.

The Technical Advisory Committee on Future State Revenues met Wednesday to review the financial status of the state. After the meeting, state Budget Director Perry Comeaux, chairman of the advisory committee, said the "trigger" to set off the extra pay raises won't go off.

The 2001 Legislature approved a 2 percent pay raise for teachers this coming fiscal year, which starts July 1. It also said if the state's general fund balance, or reserve, reached $154 million on May 31, the teachers would receive an extra 1 percent.

The formula also said if the fund balance reached $194 million, then a 2 percent pay raise, in addition to the other 2 percent, would kick in.

The state Board of Examiners meets May 14, when it is expected to officially certify that the reserve won't reach $154 million.

Comeaux did not say what he expected the fund balance to be, but said it would be far below $154 million. When the Legislature adjourned last year, it was estimated the state would have $125 million in reserve.

Russell Guindon, a legislative fiscal analyst, told the committee that tax revenues this fiscal year are expected to be $86.4 million below what was forecast by the Economic Forum.

The state's budget is built on the revenue predictions of the forum, a group of five financial experts.

Guindon said his office and the state Budget Office agree that revenue from the sales tax will be $22.6 million short of what was predicted, the gaming tax forecast will be off $41.4 million and the decline in other taxes would bring the total to $86.4 million.

The budget division estimated agencies would save $46.5 million this year and return that to the state's general fund. A large part of that comes from salary savings due to vacant jobs in the state government.

The Legislature, when it adjourned in June 2001, estimated the reversions this year would be $39.9 million. So the state gains an additional $5.6 million.

But budget experts point out that the state is responsible for guaranteeing revenue to local school districts when there is a shortfall. These districts depend on a portion of the state sales tax. When it doesn't develop, as is the case this year, the state must dip into its funds.

Comeaux said state Treasurer Brian Krolicki has come up with a plan to sweep the extra money in bond accounts and other financing to generate an extra $30 million.

The state will again measure the fund balance, or reserve, in the fall to see if it hits the $154 million mark, which would trigger a 1 percent pay raise in January for teachers. But budget experts say they don't expect the state will reach that figure.