Governor’s budget faces overhaul

Monday, Jan. 27, 2003 | 11:10 a.m.

CARSON CITY -- Gov. Kenny Guinn's $4.8 billion state budget may be in for some major changes judging from the reaction of legislators after their first glimpse of the two-year spending program.

Assembly Speaker Richard Perkins, D-Henderson, called the budget picture "pretty gloomy," and said he did not foresee trying to add any money to the budget. But he said some funds could be shifted around to take care of the state's highest priorities.

Assemblywoman Barbara Cegavske, R-Las Vegas, said that funding for some projects, including the Nevada State College at Henderson, could be reduced even further.

Assemblyman Bob Beers, R-Las Vegas, said that two groups are preparing alternatives to Guinn's proposed budget.

The Senate Finance Committee and the Assembly Ways and Means Committee today begin a second week of their overview of Guinn's budget, which calls for a $1.1 billion tax increase to pay for growth and to start some new programs.

During the first week, the lawmakers learned there was a $13 million error in the budget of the state Welfare Division, which had overestimated the revenues due from the federal government.

And Guinn did not put any money in the budget to set up the system to collect his proposed 7.3 percent entertainment tax slated to take effect July 1. The state Taxation Department estimates that 3,000 businesses will have to pay that tax if it goes into effect.

Senate Majority Leader Bill Raggio, R-Reno, said there is a $90 million problem in the budget of the state University and Community College System.

Part of the federal estate tax goes to the university system, although President Bush and Congress approved a plan to phase that procedure out over a four-year period.

University officials had hoped that Guinn would replace the loss of that money with state funds. They wanted to keep the estate tax revenue and spend only the interest from the investments. But Guinn included the full $93 million in the university budget, meaning the state in 2005 will have to find money to replace that.

"We're going to have a $90 million hole to fill in 2005," Raggio said.

Perkins, a member of the Ways and Means Committee, said he doesn't think "we will have the ability to augment the budget given our current fiscal situation."

"I haven't seen anything that is necessarily over-budgeted," Perkins said. "I think, given the money we have or don't have, there may be some things we want to prioritize one against the other later.

"Some education and health care may be higher priorities than other things."

For example, he said, the governor's budget does not provide $12 million to produce more nurses in Nevada, which needs them. He said some items could be shifted in the university's $1.2 billion budget to get the money for the nurses program.

"I'm guessing that in a $1 billion budget, they could find $12 million," Perkins said.

Perkins said it was his suggestion to Guinn to cut $10 million from the budget of the Nevada State College at Henderson, which Perkins helped start. The college has a budget to accommodate the equivalent of 500 full-time students by the end of the next two-year budgetary period. Perkins said he didn't foresee any more reductions in the $7.8 million biennial budget of the State College.

But Cegavske says she thinks the Henderson school spending program can be reduced.

She said enrollment numbers are very low, the equivalent of less than 200 full-time students.

"When we are at a time of trying to consolidate and eliminate, (the college) is not something we should be playing with," she said.

"There comes a time when you have to sit down and say you have to make a choice here. What programs are we willing to sacrifice -- a new college that is not producing or is not enrolling students?

"We need to cut. Before you invest any more, cut it off right now."

Cegavske applauded the governor for advocating bonuses for teachers in subjects such as special education, math and English as a Second Language. And she praised Guinn for putting aside money for school books, with those funds not being subject to contract negotiations for teachers salaries.

She said she made both of those recommendations in past years without success.

She said the subcommittees of the legislative budget committees will be examining the proposed spending programs more closely, and that is where reductions could be made.

Both she and Beers said e-mails they have been receiving have been overwhelmingly against the proposed tax increase by Guinn. Beers said the people who have transmitted the e-mails were "shocked" at the governor's budget and tax plan.

But Marybel Batjer, chief of staff for Guinn, said the governor has received some very positive comments on his State of the State speech last week, and his suggested tax program. She said overall, e-mail responses to have been mixed.

In defending the governor's budget, Raggio said a great part of the increase is to take care the higher number of students and welfare cases, and to cope with inflation. Beers had harsher words for the governor's plan.

"This is a major departure from the way Nevada has always been," Beers said. "The governor has proposed a fundamental change in Nevada. This scope of (the budget and tax increase) is shocking."