State budget faces steeper shortfall

Tuesday, Sept. 10, 2002 | 11:06 a.m.

CARSON CITY -- Nevada's budget crisis may be worse than Gov. Kenny Guinn's prediction of a $275 million shortfall, legislative fiscal analysts said Monday.

In a report presented Monday, the analysts predicted the deficit for this biennium will range from $305.9 million to $333.2 million.

But state Budget Director Perry Comeaux, who conceded that the earlier prediction by the Guinn administration may have to be revised upward by $8 million to $10 million, said he's not as pessimistic as the analysts.

Comeaux told the Legislative Interim Finance Committee that he was scheduled to meet with Guinn today to give the governor his first look at state agencies' recommendations to cut 3 percent from their budgets.

The governor is expected to make his decisions later this week on where to reduce spending to save $38.5 million. He also is expected to eliminate $30 million this fiscal year in "one-shot" budget items such as computer and car purchases.

Guinn already cut one-shot allocations from last fiscal year.

The governor also will ask the Legislature to take $100 million out of the state's $136 million "rainy day" fund.

If the fund is not tapped, Comeaux said, another 10 percent cut would be required in state budgets.

Assemblyman Morse Arberry, D-Las Vegas, asked why the governor has not recommended taxes to avoid depleting the rainy day fund, which is designed to be used for emergencies.

Comeaux said the governor is waiting for the recommendations of his tax task force, which will decide on its plan in mid-November.

"This is a Rainy Day fund and this is a rainy day," Comeaux said.

Human Resources Director Mike Willden, for one, said the fund could help Medicaid avoid $21 million in red ink; the Check-Up program that provides health insurance for children of the working poor to make up $400,000; or a $6 million shortfall in welfare.

One social program being reduced that has generated controversy is the kinship care program, under which grandparents take guardianship of children. State Welfare Administrator Nancy Ford said that program could face a $500,000 deficit by next July.

The program started Oct. 1 pays an average of $575 per month per child, the highest paid grant by the state. Ford said the highest paid family in the program receives $3,075 a month.

To keep within the budget, the Welfare Division is going to pay $575 for the first child and $100 for each additional child. Grandparents who take care of six children would receive $1,075 instead of $3,075.

Assemblywoman Chris Giunchigliani, D-Las Vegas, said it might be short-sighted to reduce Kinship Care because the children might go back into foster homes that are costly to the state.

But Willden said the children did not come from the foster home program. He said most grandparents were mostly concerned about retaining Medicaid coverage for the children.

The Welfare Division expects to save $4 million by reducing welfare money sent to Clark and Washoe counties for emergency assistance. It will cut by 25 percent the funds paid to contractors for domestic violence and drug abuse prevention programs, and cut by 50 percent the contracts for vendors for statutory rape prevention services.

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