GOP outlines cuts in funding

Erin Neff

Thursday, March 27, 2003 | 11:02 a.m.

CARSON CITY -- Flanked by two dozen of his colleagues, Assembly Minority Leader Lynn Hettrick proposed $400 million in budget cuts Wednesday as part of a "general philosophy," but not in a bill form the Legislature can consider.

Hettrick's plan calls for cuts in funding for everything from public education and higher education to legal fees for the court battle against the Yucca Mountain nuclear waste depository.

The proposal also would raise $300 million a year from tax increases to gaming, cigarettes and liquor and includes a 4.5 percent sales tax on services. Critics note that the plan contains no broad-based business tax and does not include either the gross receipts tax or the tripling of the business activity tax proposed by the governor.

"Nevada's ability to fund education and the needed services will remain a problem unless we control spending and transition to taxes that will grow only as fast as the state economy," Hettrick, R-Gardnerville, said at a news conference packed with lobbyists.

Hettrick said he ran out of time to put the proposal's concepts in bill form, but insisted the numbers do add up, after the cuts and new revenue sources were considered. He also said that since cuts need to be considered by money committees and taxes by tax committees, it made no sense to put the proposal into a single bill.

The plan funds much of Gov. Kenny Guinn's proposed per-pupil spending but leaves out Guinn's $50-per-student amount for textbooks. Hettrick's proposal keeps the $34 million teacher raise included in the governor's budget but does not include Guinn's proposed all-day kindergarten or stipends for teachers in at-risk schools or in high impact positions, cutting some $95 million in K-12 education.

The bulk of Hettrick's proposed savings would come from reducing the state's welfare caseload growth, reducing higher education's funding formula, saving $33 million a year, and giving school districts greater flexibility in class-size reduction.

Despite the welfare cuts, Hettrick said his plan "retains human services."

He said service caseloads have "leveled off" or slowed. He said any impact the current war with Iraq or any economic downturn might have on caseloads for services was unknown.

"My crystal ball's no better than your crystal ball," Hettrick said.

As Hettrick spoke with eight senators and 17 Assembly members behind him, Guinn was speaking in a room on the same floor to the Carson City Chamber of Commerce, urging members to support for his budget and tax plan.

Guinn said Wednesday that he didn't want to comment specifically on Hettrick's plan until he had a chance to read it, but the governor warned that caseload cuts are not as easy as they seem.

"Sometimes people don't understand the ramifications of what they do," Guinn said in an interview after his speech to the chamber.

As an example he cited his proposed increase to 32,000 from 25,000 children enrolled in the Children's Health Insurance Program. The 7,000 increase, Guinn said, would likely save the state more than it costs.

"Those 7,000 kids can walk into any emergency room for care if we don't cover them," Guinn said. "I think it's cheaper to do it the way we're doing it."

Education, social service and gaming lobbyists immediately criticized Hettrick's plan while business lobbyists cheered it at the press conference.

"The elderly, the children, the disabled, that's where they're making their cuts," Bobbie Gang of the Nevada Women's Lobby said.

Harvey Whittemore, a lobbyist for the Nevada Resort Association, said he did not think Hettrick's plan included a broad-based business tax.

"It looks to the same sources in too great amounts," Whittemore said. "It just doesn't resolve the long-term problem of relying too much on gaming."

Hettrick insisted his plan included a broad-based business tax because of the 4.5 percent tax on services over $50 excluding day care, health care, insurance premiums and garbage collection.

"It taxes business, it doesn't tax residents," Hettrick said.

Assembly Speaker Richard Perkins, D-Henderson, had the opposite view.

"This proposal places a larger burden on citizens than on business," Perkins said.

And while he said he appreciated the proposal for adding items for legislative discussion, Perkins said some of the cuts may not be possible and others may actually just shift costs or create higher costs.

"I worry that this proposal, taken by itself, doesn't help build a Nevada we can be proud of," Perkins said.

Educators recoiled at the plan, with K-12 representatives saying it exacerbates funding problems for local school districts and with higher education representatives saying it sets Nevada students back.

"This is a plan that would form the foundation for the state support of higher education for the next 10 years," University and Community System Chancellor Jane Nichols said. "It would guarantee a mediocre student base at both the universities and community colleges."

In addition to cutting the per-student funding formula proposed by Guinn from 86 percent to 80 percent, the plan also eliminates the Nevada State College at Henderson.

Nichols said the state college cut "seems to run counter to Republican philosophies because it would take out something that will save money in the long run."

One line item on the proposal was left blank, but listed proposed savings at the UNLV Dental School.

Hettrick later said he left that blank because he does not know for sure how much estate tax the university would have to fund the dental school and other programs.

"What we are heading for is a train wreck next session," Hettrick said after the press conference, in reference to the dental school item.

Hettrick's plan cuts $2 million that Guinn's budget earmarks for the state's court challenge to the federal plan to store nuclear waste at Yucca Mountain.

Peggy Maze Johnson, executive director of Citizen Alert, said that "is an unconscionable cut."

Making cuts to "funding that ensures we will be able to bring these suits to a successful conclusion is like not paying that last premium on your insurance policy and then you die," she said.

Hettrick said it was a lot less dramatic than that.

"There's a fixed amount of money and somewhere you have to have some fiscal restraint," he said. "Do we want Yucca Mountain? No. But this (cut) asks, 'Can we afford to have this money (on the books) now?' "

Guinn said Wednesday that while any tax increases and budget cuts are ultimately up to the Legislature, he is drawing a $704 million line in the sand.

"That is the bare minimum that is needed," Guinn said. "I put the other things in the budget saying there were needs there."

Only two Assembly Republicans missed Hettrick's press conference: Bob Beers of Las Vegas and Dawn Gibbons of Reno. Beers was in another committee hearing at the time. Gibbons on Tuesday asked in the Assembly Taxation Committee hearing whether a service tax is a broad-based business tax, and was told it wasn't.

Later Gibbons said that while she appreciated the discussion, she could not support the types of cuts envisioned.

Neither Senate Majority Leader Bill Raggio, R-Reno, nor Sen. Ray Rawson, R-Las Vegas, attended. Both have commented in recent days about the dire needs in social service areas and the lack of available cuts that can be made to the budget.

"This is a proposal the Republicans are in agreement with the concept that we should be reducing spending," Hettrick said. "Not every Republican supports every part of this plan."

Two Democratic senators, Terry Care of Las Vegas and Mike Schneider of North Las Vegas, attended the news conference and stood behind Hettrick.

"I'm interested in anything any member of the Legislature wants to put forward," said Care, former Nevada State Democratic Party chairman. "Nothing is going to happen unless we get two-thirds" of the Legislature to approve a tax plan.

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