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February 13, 2012

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Squeezing the bureaucracy, lawmakers get creative

Nevada’s poor spared the worst of budget cuts, as social protections remain largely intact

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Sam Morris

Assemblywoman Sheila Leslie, shown Feb. 25 at the special session in Carson City, said lawmakers from both parties found Gov. Jim Gibbons’ proposed cuts to be unacceptable.

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Sunday, March 7, 2010 | 2 a.m.

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What was billed at its onset as the biggest fiscal crisis in Nevada history ended with the state’s social safety net, such as it is, intact.

The state’s services for the poor — even after $83 million in cuts to the Health and Human Services Department during the special session of the Legislature — will largely continue as before.

A compromise between the governor and lawmakers eliminated the most disturbing of the proposed cuts — in dentures and hearing aids for the elderly and housing assistance for the mentally ill and disabled, and higher health insurance costs for children of the poor.

Almost as quickly as a cry arose against the cuts, officials found ways around them. The state transferred money from various accounts, counted unspent money from unfilled positions and discovered millions in “natural savings” from lower-than-budgeted enrollment in programs.

It is certainly the job of elected leaders and state workers to balance the budget in the least painful way possible. But the state’s cycles of predicted budget crises and their resolution — usually through financial sleight of hand — fuel a perception that no matter how lean a bureaucracy, when you squeeze government, money will appear from somewhere.

The Health and Human Services case reinforces the perception that state officials always seem to be able to spare citizens the deepest cuts.

Even after four rounds of budget cuts, the first in January 2008, it could be argued that the average citizen has to date felt little effect.

For legislators who want to build momentum for tax increases next session — when analysts predict a $3 billion state budget deficit — blunting the effect of budget cuts has political ramifications. Voters are less likely to believe there’s a crisis if they haven’t personally felt its effect.

Mike Hillerby, a former chief of staff to Gov. Kenny Guinn, credited budget staff and lawmakers.

“They work hard so that the budget cuts cause the least amount of pain,” Hillerby said. “The downside is, if the general public never really feels the impact of that, the public doesn’t see the need to preserve those budgets or build them back up to some previous level.”

What began as an $887 million budget shortfall narrowed during the special session to $805 million, thanks to anticipated federal funding and higher-than-expected tax revenue from mining.

To fill the gap, money was taken from capital funds of Clark County School District and Clean Water Coalition and through higher fees on mines and banks. About $200 million in other state accounts was shifted to the general fund.

Having state offices move to a four-day week was, in part, an attempt by lawmakers to make the cuts more visible.

Many observers have said that the 6.9 percent cuts in state funding to K-12 and higher education will bring tangible effects on Nevadans such as larger class sizes and the elimination of degree programs.

But school districts and the Board of Regents will decide how those cuts are made. And after local tax dollars and other sources of funding are counted, the cuts to school districts as a whole will be less than 2 percent. (It should also be noted, predictions of teacher layoffs and college closings have been made in previous rounds of budget cuts.)

When asked about evidence of the sacrifices they had predicted would be required to balance the budget, Democrats and Republicans pointed to $303 million in operational cuts. But a significant portion of those cuts won’t have any effect on citizens or state services.

Consider the cuts in Health and Human Services, which totaled about 5.6 percent of its general fund budget:

• $2 million saved from lower-than-budgeted caseload growth for programs designed to keep seniors living in their homes.

• $4 million saved by requiring those who get personal care services to undergo physical examinations.

• $9 million swept from a health radioactive and hazardous waste fund, which is used for the burial of low-level radioactive waste.

• $2 million saved by switching administrative costs in the welfare and food stamp programs to the federal government.

• $1.1 million saved from lower child welfare enrollment in rural Nevada.

State observers credit lawmakers, budget staff and Mike Willden, the well-respected director of Health and Human Services, for coming up with ways to make cuts that won’t effect services.

“They are looking for more innovative ways of providing services,” said Carole Vilardo, president of the Nevada Taxpayers Association. “Are they able to do it in every instance? Absolutely not. But we are seeing it happen.”

Assemblywoman Sheila Leslie, D-Reno, one of the most vocal advocates for services for the poor and elderly, said lawmakers and state administrators tried to soften the effect of the cuts. “It’s the Legislature’s duty to speak up for those who can’t speak for themselves,” she said.

Sheila Leslie

Sheila Leslie

Leslie said when lawmakers looked at some of the cuts proposed by Gibbons, lawmakers agreed they were unacceptable. Gibbons and his staff did not raise objections to putting back some of the funding for Health and Human Services.

“We have finally reached the bottom,” Leslie said. “Everyone agreed that we can’t take away hearing aids from poor elderly people. You can’t do it. Even in Nevada, you can’t do it.”

The argument can be made that there just isn’t that much to cut in state government. Nevada offers among the fewest health services for the needy in the nation, Willden said.

“Any statistic or study you look at, we’re in the bottom 10 percent,” he said. “We’re not a generous state. We’re pretty thrifty, not in terms of being economical but in terms of being miserly.”

To be sure, the Legislature has made some tangible cuts that will or could have an effect. During the special session, it reduced funding for problem gambling research, capped a job and training program for the developmentally disabled in rural Nevada and reduced the capacity of a substance abuse prevention and treatment program. The state’s highest security facility for youthful offenders will also close.

Arguably the most talked-about cut remained: The state will save $800,000 by decreasing its allotment of adult diapers. Although it made for a powerful sound bite, even Democrats acknowledged the state has been inexplicably generous when it comes to providing incontinence products to the poor. The new cap on adult diapers brings Nevada to the national standard.

Willden pointed to other areas of concern:

• By sweeping $100 million in tobacco money during recent budget cuts, tobacco cessation programs are “essentially eliminated for the next two years,” he said.

• The amount that the state pays doctors and health care providers for treating Medicaid patients has repeatedly been cut. The latest is in the amount paid to anesthesiologists. This could cause some doctors to refuse to treat patients covered by Medicaid. “We may start seeing access issues for Medicaid recipients,” he said.

• Although the state has budgeted savings for having lower-than-expected enrollment for programs for the mentally ill and developmentally disabled, a spike in people seeking services would cause the state’s budget to be out of balance again. At the psychiatric hospital in Las Vegas, for example, the Legislature last session agreed to close 22 beds. The hospital can handle current demand, but a spike would mean more mentally ill in emergency rooms and prisons.

Leslie acknowledged that in the past, average citizens — those not on Medicaid or who are not attending college — may not have seen the effect of cuts. That will change, she said.

Specifically, people will see more crowded classrooms, college degree programs cut and state offices stay open only four days a week, she said.

“This time is different,” Leslie said. “People, the average citizens, are going to feel the pain.”

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