$274 million in new revenue softens state budget cuts

By David McGrath Schwartz

Monday, May 2, 2011 | 8:33 p.m.

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.

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.