State budget officials eye $5.8 billion in requests

Tuesday, Oct. 26, 2004 | 9:27 a.m.

CARSON CITY -- The Nevada Legislature doesn't meet until February but state budget officials are already wading through $5.8 billion in requests from state agencies -- a 20 percent increase over the current two-year spending program.

State Budget Director Perry Comeaux said the preliminary estimate is that there will be $5.5 billion available over the next two years. That means that about $300 million will have to be cut from the budget requests.

In addition the agencies have asked for an additional $440 million in "special consideration" items, bringing the total request to $6.2 billion.

"We are not expecting $6.2 billion," said Comeaux, referring to the tax revenue coming in over the next two fiscal years. "We're starting to go over them (the budget requests) with a fine-tooth comb."

The budget director expects Gov. Kenny Guinn to unveil his 2005-07 budge either Jan. 24 or Jan. 25, when Guinn delivers his "State of the State" address.

The Nevada Economic Forum, a group of five professionals who are not elected officials, is to meet Nov. 2 to make some preliminary estimates on how much the state will have to spend in the next biennium. The forum members are to meet again on Dec. 1 to make the final tax collection projections and the governor's budget cannot exceed that, unless he proposes additional taxes.

Keith Rheault, state superintendent of public instruction, said in his first meeting with the budget officials, there were questions about the projections that school enrollment will grow 4.6 percent next fiscal year and 4.1 percent the following year.

For education funding, "$180 million will be required to pay for growth alone," Rheault said. In addition, the state Board of Education requested a 3 percent per year pay raise for schoolteachers. That adds up to an additional $150 million in the budget, he said.

The University and Community College System of Nevada did not factor in any amount for pay raises. And there is nothing set aside for increases in salaries for state employees in the $5.8 billion, said Comeaux.

Traditionally the governor recommends an equal pay raise for all of the public employees if there is money available.

Guinn is scheduled to meet Nov. 4 with school superintendents from all 17 counties. Two years ago, the superintendents had a proposal for an additional $904 million for the public schools. But that request was not fulfilled because the state was short of money and had to pass a tax increase of $833.6 million to fund the budgets presented.

The University and Community College System of Nevada is asking the state to supply $1.1 billion over the next two years, a 20.9 percent increase. It is predicting a 5.9 percent enrollment increase next fiscal year and 6.8 percent in 2007.

In addition, the system also wants $100.6 million for new or increased projects.

In the current biennium, appropriations to the schools and university made up 52 percent of the budget. Human services received 27.7 percent and public safety got 10.3 percent of the spending pie with the rest divided among the smaller agencies.

Comeaux said the $5.5 billion that is expected to be available, "will be close for us to continue to do what we're doing but with higher caseloads and higher costs."

Because of higher-than-expected tax collections in these two fiscal years, the state could end up with an extra $250 million to $300 million next June 30.

The 2003 Legislature depleted the "rainy day" account, the money that had been set aside to pay for emergencies. Comeaux expects the lawmakers to replenish the fund with $120 million of the surplus.

In the 2005 session, the Legislature will also have to make up for the loss of money from the federal estate tax. Congress abolished that tax, part of which flowed into the state's educational funding.

The budget staff is starting to work weekends and evenings to examine the requests thoroughly and make cuts to fit within the expected tax revenue, Comeaux said. Agencies not satisfied with the recommendations can appeal to Guinn.

Added to the budget complications is the call for a cap on property tax increases. Some legislators have requested bills to put a limit on how much property tax can increase each year. This could impact the budgets of school districts and put pressure on the state to come up with additional money.

Comeaux said he hopes to have the final budget nailed down by the first week in January so a final review can be made and so that the printing of the document can get started.