Tuesday, Jan. 25, 2005 | 11:11 a.m.
CARSON CITY -- Gov. Kenny Guinn lauded the state's record economic growth in his fourth and final State of the State address, vowing to pump much of the state's newfound wealth into health care and education.
Nevada gleaned an influx of sales and gaming taxes last year, when the state hosted a record 50 million tourists. The result: Guinn could fund programs at previous levels in the 2005-2007 budget and still have a $1.4 billion cushion.
Guinn and his staff members said they shied away from creating massive new programs that could weigh on future state coffers.
Instead, Guinn opted to give one-time shots in the arm to the state's mental health safety net and education funding, all while promising a 2 percent raise to state employees and a $300 million rebate to taxpayers.
He also proposed commissions to study the best ways to infuse money into education and how to expand state institutes that study cancer and Alzheimer's.
"My plan for you tonight is not a series of programs but a roadmap for the future," he said. "Let this be the bold legacy, the rich inheritance of hope, we leave for all the people of Nevada."
It wasn't all good news for state employees, though. Guinn announced he would seek to end a program that gives health benefits to retired state employees. The plan would only affect new hires -- not existing or prior state employees.
Guinn called the measure an idea "that's bold, that's plain, and is absolutely essential," saying it would save taxpayers nearly $500 million over the next 30 years.
The response from Democrats was cautious, as they asked for more details and said they were reluctant to take people off health care without giving them an alternative.
Terry Hickman, president of the Nevada State Education Association, said the cuts could be a "disincentive" if it affected teachers, even as Guinn announced he planned to continue a state plan to give teachers a $2,000 signing bonus.
The Assembly chambers were packed with legislators, staff members and lobbyists who peppered Guinn's 50-minute speech with about 40 rounds of applause, though some were hardly enthusiastic.
"He didn't have any big showstoppers like a Millennium Scholarship," said Senate Minority Leader Dina Titus, D-Las Vegas.
Some Democratic leaders remarked that Guinn received a cool response on his plans to refund taxpayers $300 million through vehicle registrations. His idea to cut retirement benefits for newly hired state employees also received scattered applause.
"It was fascinating," said Assembly Majority Leader Barbara Buckley, D-Las Vegas. "There seemed to be a very tepid response to the vehicle registration rebate."
Senate Majority Leader Bill Raggio, R-Reno, called the speech "very impressive."
"I thought it was forward looking," he said. "It addressed some very important issues."
Raggio said he especially liked Guinn's support of putting more money into the state "rainy day" fund and increasing money for mental-health care.
All in all, it was an easier speech than the 2003 State of the State address, when Guinn challenged legislators to pass more than $1 billion in new taxes to supplement sagging tax revenue.
"During my last State of the State address, I said we were at a crossroads, and it was time for Nevada to choose its path," Guinn said. "We chose wisely. I am proud to report that the state of our state is strong, very strong."
Guinn's proposed $5.7 billion biennial budget includes:
Another $79 million for the state's "rainy day" funding, boosting the total amount of money in the fund to $200 million;
$300 million in rebates to taxpayers through motor vehicle registrations;
$100 million for "troubled" schools that could be used to hire additional teachers or create full-day kindergarten programs;
A 2 percent cost-of-living adjustment for all state, school district and college employees, as well as extra funds for some law enforcement officers, at a total cost of more than $200 million;
About $700 million for growth in a variety of state programs, from a $58 million new prison in Southern Nevada to an extra $500 million for K-12 funding;
$44 million for technology improvements to state agencies;
$52 million to bonds for capital improvements;
About $200 million to enhance existing programs.
Guinn pointed out that Nevada has 122 schools classified as failing and another 99 on a warning list.
"We must rely less on spreadsheets and funding formulas and more on common sense," he said. "We must develop a system that is long on accountability and short on excuses. It must be a system that demands progress.
"And, if progress is not made, then we must require that leadership in these failing schools be changed."
Gary Waters, member of the State Board of Education, said the lack of available funds has long been the sole hurdle separating Nevada's schoolchildren from badly needed programs and services.
"You're not going to find anybody out there with any logical objection to full-day kindergarten, everyone agrees it results in kids who are better prepared for the rigors of school and who have a greater chance at continued academic success down the line," said Waters, past president of the state board. "This time around we know the money's there, so if we fail to do what's right for students it's a moral failure, and not just a case of insufficient funding."
Waters said he was pleased Guinn had endorsed flexible class-size reduction plans for the state's two largest school districts, Clark and Washoe counties. Rural districts have already been allowed to follow Elko County's successful example with a pilot program prior to the last legislative session, where schools were allowed to experiment with staffing and class sizes, adjusting ratios to fit specific school needs.
Guinn asked for help from legislators and the state's congressional delegation to establish a state trust that would purchase federal land. Developers could then build homes on the land and charge simply for the costs of the home.
"This land, which would be placed into a permanent state trust, would not be included in the price of the home, resulting in a lower price for the homebuyer," he said.
Guinn did not propose a solution to what could turn out to be the most contentious issue of the upcoming legislative session -- what to do about surging property taxes. He encouraged legislators to address the issue but offered no suggestions on how to do it.
"My pledge to the people of Nevada is this: We will not rest until property tax relief is a reality," he said.