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July 24, 2014

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$274 million in new revenue softens state budget cuts

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AP Photo/Cathleen Allison

Economic Forum Chairman John Restrepo speaks during a hearing Monday, May 2, 2011, at the Legislature in Carson City.

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CARSON CITY — Nevada’s budget crisis became a bit less severe Monday with word that the general fund will be enriched by a previously unplanned $274 million, a bit of a windfall that will benefit the beleaguered education and health and human services budgets — and maybe undermine the argument for tax increases.

Business leaders meeting as the state’s Economic Forum ­­— the state’s official crystal-ball people on matters financial — projected a slow but steady uptick in the ailing economy. It won’t be great, they said, but it will be better than the dark days predicted in December, when Sandoval was putting together his budget.

Monday was a day of forecasts, economic models and charts on how Nevada’s economy would fare over the next two years.

But the most important calculations were numbers scratched out with pens by a pair of Republican lawmakers.

Sen. Joe Hardy, R-Boulder City, and Sen. Ben Kieckhefer, R-Reno, both perceived as moderates, did some back-of-the-napkin math and said they’re more comfortable with Gov. Brian Sandoval’s budget.

“Yes, it’s more likely to get passed,” Hardy said. About $200 million means education and health and human services cuts “are not as onerous as in the governor’s original budget.”

Kieckhefer said with the additional money, school district personnel could shoulder the cuts to education without affecting classrooms or programs.

“With additional revenue, not a single class size has to be increased, not a program lost,” he said. “If the union negotiators want to take it in a different direction, force layoffs and cuts, I guess that’s their choice.”

Democrats said the money was welcome, but insignificant compared with the $1.2 billion in cuts Sandoval originally proposed in January.

Click to enlarge photo

Steven Horsford

Senate Majority Leader Steven Horsford, D-North Las Vegas, called the additional revenue “a drop in the bucket” that does little to change the inadequacy of Sandoval’s budget.

“It is our responsibility to pass a budget that meets our obligations to our students, seniors and all Nevadans,” Horsford said. “The governor’s budget did not do that yesterday, and it does not do that today.”

Sen. Sheila Leslie, D-Reno, said Sandoval’s budget leaves “gaping holes” in the state’s social services safety net and the additional projected revenue will “not be enough to stitch that safety net back together.”

Sandoval called for $274 million to be added back to the K-12 budget. (The Legislature will have final say.)

Sandoval is scheduled to give a speech Tuesday in which he is expected to hammer home his message: Support my budget, make reforms to education.

One legislative observer said it appeared Sandoval had outplayed the Democrats. “A $300 million add-on, which is small but measurable, can be used to derail any semblance of a plan (by Democrats), even one in its infancy,” the observer said.

The Legislature has been meeting since February, and Democratic leadership in the Assembly and Senate have highlighted how Sandoval’s budget would affect human services, higher education and K-12.

Senate Democrats said they would close K-12 budgets this morning. But they still have yet to release a plan on how to raise taxes. Again Monday, they wouldn’t say how they would raise the money.

“We have 40 more days, my friend,” Horsford said.

Sun reporter Anjeanette Damon contributed to this story.

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  1. Let's tax those casino comps. Especially those High Roller Suites and those $ 5.00 locals "Free Slots" teasers. How about 25% - they are Free after all. An Income tax with the first 50K excempt. If it causes someone to leave Nevada - a Real Estate Transfer Tax when they leave. Real Mining Taxes - especially on Gold and Silver. There is Plenty of Money, its just a question if politicians are willing to go after it from the people that have it.

  2. Me thinks the Dems will vote the Governor's budget through and get out of town--unless the Dems can show something dramatic.

    The extra $274 million just put any Republicans that might have been wavering back into the Governor's camp and it might be enough to bring some Democrats along as well.

  3. The problem is that Democrats played all their cards by 2010. The over the top rhetoric about the sky is falling budget cuts seemed silly by 2010 when it was revealed that the 2009 budget cuts brought our budget from $6.9 billion to $6.9 billion.

    In other words the Democrats only really cut imaginary spending.

    With the economy still worsening 3 years after the crunch began in Vegas people were no longer sympathetic with the Dems position we had to make cuts. We came out of the special session in 2010 with a $6.4 billion budget.

    The economy still hasn't recovered but Dems still want to keep the party going as if we never hit a recession 4 years ago. The Dems have made it clear they want at least $7 billion which is more than past budgets (at least nominally) and far more than we're spending now. They'd prefer $7.8 billion which is just ridiculous.

    Sandoval's budget will jump from $5.8 to $6.1B and that is not too far off our current budget of $6.4B.

  4. *Note, it should say "Legislature" as in "the legislature only really cut imaginary spending" as it was a bipartisan effort to pretend to cut the budget.

  5. No new taxes remains as unconscionable a position as ever.

  6. Where did this $274 million SUDDENLY come from?
    Long ago, there was chatter about not having solid numbers, but good Lord, this is one big pile of money that has either been deliberately hidden (due to a political agenda), or times have improved so much, that the State of Nevada is on the economic rebound in high roller fashion!

    Something is fishy here.

  7. $4.3 BILLION in tax deductions for mining corporations.

    And we should fall all over ourselves because the Governor "gave" $274 million back - which I understand might go to judges, hospitals, social services or some other rural place too. Well that is mighty generous of you Governor! Do you mind if I ask you not to rob me again! I think a chunk of that goes to buy votes Republican votes in the rurals too right?

    How much do the 300,000 kids in Las Vegas really get? You asked them to pay $300 each in your state of the state - does this mean they only have to pay $250 dollars now?

    Why don't you go tax a grown-up instead of our kids!

  8. Star, the $274M is just a forecast. Its an estimate of future revenues, more of a guess really. The estimate is generated from dozens of economic variables that seem to suggest our economy is starting to recover (and or inflation).