Gibbons rosy, Democrats leery

Cy Ryan and J. Patrick Coolican

Friday, April 20, 2007 | 7:19 a.m.

CARSON CITY - The past few days have foreshadowed what could be an acrimonious end of the legislative session, as Democrats and Republicans, and the Legislature and the governor, fight over meager sums.

The latest configuration of Gov. Jim Gibbons' budget was met with deep skepticism by the Legislature on Thursday, by Democrats in particular.

Budget Director Andrew Clinger said the state no longer faced a budget deficit. A projected $137 million shortfall, caused by lower-than-expected tax revenue , had been erased with cuts and recalculations, he said.

Specifically, Mike Willden, director of the state Human Resources Department, said the number of Medicaid recipients will be fewer than first predicted - 163,819 instead of 169,954, and then will drop by 9,500 in fiscal 2009.

Also, the federal reimbursement will rise 1.4 percent, for $16.9 million more federal aid in fiscal 2009. The fewer clients and higher reimbursement rate would mean a $96.4 million savings.

Assembly Speaker Barbara Buckley was circumspect about the rosy predictions. She said legislative staff raised a number of questions about some of the assumptions, such as a reduction in the number of older Nevadans and lower costs per eligible person.

The Gibbons administration's optimistic prediction is tethered to a new federal law requiring Medicaid recipients prove their identity with a birth certificate. This will in turn reduce the number of people on Medicaid, a health care program for low-income people.

Buckley, a Las Vegas Democrat, questioned that assumption, noting that poor people in need of health care would be highly motivated to gather the needed papers.

Assemblywoman Sheila Leslie, D-Reno, said keeping people off Medicaid is bad policy in the long run.

The state already has one of the lowest per capita number s of people on Medicaid in the country, as a matter of policy. Keeping people off Medicaid will increase the number of people without any health coverage, which could lead to more emergency room visits and uncompensated care for public hospitals, she said.

That would mean more red ink for the beleaguered University Medical Center, the public hospital run by Clark County.

Buckley and Leslie said that they fear the governor's new figures are just a tactic, and that he will come back for more money next year if the predictions prove incorrect.

The revisions also included cuts to higher education, mental health services, disaster relief and stream restoration. University system Chancellor Jim Rogers is sure to fight Gibbons on higher-education cuts.

Willden acknowledged the cuts to mental health could lead to longer waits at mental health facilities and waiting lists in neighborhood clinics.

Democrats, who began the session with ambitions to expand all-day kindergarten, have their own plan to find money. They're taking aim at some of the more than $40 million that has been budgeted for private organizations such as the Nevada Cancer Institute and the Lou Ruvo Brain Institute in Las Vegas . Gibbons proposes granting that money even as he has asked state agencies for cuts.

Buckley said the state's needs should be financed first, before allocating money to "some of these very worthwhile philanthropic ventures." Her wording was a tacit acknowledgment of the political problem involved in cutting money for cancer and brain research, among other causes.

Senate Majority Leader Bill Raggio, R-Reno, says he doesn't want to comment about the budget situation until he sees projections for tax revenue that the Economic Forum is to report May 1.

But Raggio did say that people with cancer may feel that the Nevada Cancer Institute is a priority over the Democratic proposal to expand full-day kindergarten, estimated to cost $45 million beginning in July 2008.

The Nevada Cancer Institute received $10 million two years ago. This time, Gibbons has included a one-shot $10 million , plus an additional $5 million each fiscal year for a $20 million total.

Other private or nonprofit organizations in the Gibbons budget include the Ruvo Brain Institute for $10 million, Opportunity Village in Las Vegas for $12 million and the Institute for Neuro-Immune Disease for $3.5 million.

Gibbons faces his own political vulnerability on the worthy causes, though. Several of the charities are associated with wealthy Nevadans who were some of his largest campaign donors or gave to his legal defense fund. Those include Ruvo and developer Harvey Whittemore.

The governor lost a round in a committee meeting Thursday, as Raggio backed increased fees for health care providers to pay for more inspectors to regulate them. Gibbons has voiced opposition to all fee and tax increases.

Melissa Subbotin, a spokeswoman, would not say whether the governor will veto the fee increase if it passes the Senate and Assembly. "You are asking me to speculate on whether or not that bill will make it to the governor's desk and hypothetically, if it did, what would occur," she wrote in an e-mail.