Monday, Feb. 23, 2009 | 10:32 a.m.
CARSON CITY – Assembly Speaker Barbara Buckley, D-Las Vegas, unveiled a forced savings plan for state government aimed at cushioning its budget against boom and bust cycles.
The state has drained its so-called “stabilization fund” to cover the cost of government as tax revenue has fallen. Despite tapping those funds the state has still had to make deep budget cuts.
“The rainy day fund does not do the job,” Buckley told the Assembly Ways and Means Committee in support of her Assembly Bill 165.
The bill would require the state to set aside 1 percent of its tax revenue, as projected by the Economic Forum, in the budget. It would also require that in good years, when the ending fund balance of the state exceeded the estimate by 7 percent, that 40 percent of that leftover money be placed in the rainy day fund.
Currently, state law doesn’t route the set-aside money to the rainy day fund until it exceeds 10 percent of ending fund balance.
According to the legislative fiscal analyst division, there was $267.6 million in the rainy day fund at the end of the 2007 Legislature. There is no immediate estimate how much will be in the rainy day fund if the Buckley bill is passed.
The proposal has the support of the chambers of commerce of Las Vegas and Reno, the Nevada Taxpayers Association, the university system and Lt. Gov. Brian Krolicki.
Dan Klaich, executive vice chancellor of the Nevada System of Higher Education, noted that Gov. Jim Gibbons’ proposed budget would hit the university system hard. Klaich also proposed there be a separate saving account for education to “help smooth out the bumps,” he said.