Stimulus slice doesn’t sit well with lawmakers

By David McGrath Schwartz (contact), Cy Ryan (contact)

Thursday, Feb. 19, 2009 | 2 a.m.

Harry Reid

A few weeks ago it looked like Senate Majority Leader Harry Reid would be welcomed here as the savior of Nevada’s budget, riding on a horse made of freshly printed federal dollars.

Not so. And Reid acknowledged as much in a speech Wednesday.

The stimulus, he said, was “not meant to line the pockets of the corporate CEOs and here at the state level, it’s not meant to plug every budget hole to let the state leaders avoid their responsibility.”

Reid said the state would still have to make tough decisions. He declined to offer suggestions on the state’s budget problems.

“That’s their responsibility, not mine,” he said afterward.

Numbers are still being worked out, but Assembly Speaker Barbara Buckley said the stimulus would trim the state’s $2.3 billion deficit by as much as $500 million.

“It certainly would’ve been nice if the federal government had provided more money to the state, but they have to balance a lot of concerns,” said Buckley, D-Las Vegas.

Senate Minority Leader Bill Raggio, R-Reno, was more blunt.

“The stimulus was somewhat of a disappointment,” said Raggio, whom Reid described in his speech as a “historical figure.”

According to one analysis, Nevada ranked 50th in per capita funding from the stimulus bill. The preliminary estimate from the Federal Funds Information for States, a service of the National Governors Association and National Conference of State Legislatures, shows Nevada beat only Puerto Rico in the per capita money it will receive from the stimulus.

Reid, however, noted that the way money for health care was divvied up favored Nevada, based on unemployment.

The federal stimulus “helps state budgets a lot,” he said. “What would it be if it hadn’t done that?”

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Even with Gov. Jim Gibbons’ proposed addition of 52,000 low-income Nevadans to the Medicaid rolls in his budget, Nevada will still rank next to last nationally in spending on the health care program.

Medicaid in the proposed budget will total more than $2.7 billion over the next two years, excluding federal stimulus money.

Charles Duarte, chief of the state Health Care and Financing Division, told the legislative subcommittee on budgets that amounts to an additional $390 million during the coming two years to pay for medical care.

“That’s a lot of money into the health care economy,” he said.

Asked whether it would change Nevada’s next-to-last position, Duarte said, “I don’t believe so.”

Medicaid covers 11 percent of Nevada’s population, compared with a national average of 15 percent. The state receives $6,000 per resident from the federal government, compared with $8,300 nationally.

As of January, 197,388 Nevadans were served by Medicaid.

Despite the added money in the governor’s budget, there are proposed cuts in hospital rates, funding for indigent auto accident victims and a cap on how many children of poor families would be covered. Last year the state cut hospital Medicaid reimbursement rates by 5 percent and the governor’s budget would cut them another 5 percent.

Buckley said there may not be sufficient federal stimulus money to restore the cut funding, but she told Duarte to develop a budget without the governor’s proposed cuts.

The state is to receive about $400 million in stimulus money for its medical care program for low-income residents. The federal government will also cover 63.9 percent of the program costs as opposed to the present 50 percent.

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A bill to establish a fund for victims of mortgage fraud looks like it will sail through the Assembly Committee on Commerce and Labor.

Assemblyman Marcus Conklin, D-Las Vegas, said his bill would reimburse homeowners up to $25,000 for court judgments obtained against brokers, bankers or agents.

Ernie Nielsen, attorney for the Senior Law Project in Reno, told the committee Wednesday that judgments are often won, but brokers disappear or go bankrupt, leaving the victim unable to collect.

Assembly Bill 141 would divert part of the licensing fee for mortgage brokers to the fund. Money that home-owners receive in court judgments would offset the amount paid by the state.

If the state pays a victim, the license of the broker, banker or agent would be automatically suspended and wouldn’t be reinstated until the guilty party repays the state fund in full, plus interest.

There was no opposition to the bill. The committee, however, wants to know what percentage of license fees would be diverted to establish the recovery fund.