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July 23, 2014

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state government:

Lawmaker questions how Sandoval’s budget promises will pencil out

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Paul Takahashi

Gov. Brian Sandoval’s budget director told the heads of state agencies to plan for a budget without further cuts to spending.

The eternally optimistic Gov. Brian Sandoval has made some big promises on the budget he’s building: no cuts to education while keeping taxes at their existing levels — all while demand for government assistance programs continues to rise and his administration looks at undoing at least some of the salary cuts for state workers.

Now, at least one lawmaker is publicly questioning how Sandoval will make it all balance, as he’s required to do before the Legislature meets in February.

“It will take more than the revenue growth that we’re seeing to make significant restorations to salaries and benefits and to keep education whole,” said Assemblywoman Debbie Smith, D-Sparks, who was chairwoman of the Assembly Ways and Means Committee and heads the Legislature’s Interim Finance Committee. “I’m anxious to see the governor’s budget.”

The Sandoval administration has released few details about his budget-writing process. So far, he has instructed state agencies to submit “flat budget” requests. He also has announced that since July 1, 2011, tax revenues have come in $70 million over initial projections.

But even with that additional revenue, Sandoval will have a difficult time avoiding budget cuts.

And a flat budget — in which agencies essentially are allocated the same amount of money they received in the current fiscal year — doesn’t necessarily mean “no cuts.”

For example, the state’s two largest school districts say they will need more money than they are receiving now just to cover increased costs for personnel and utilities.

Health and human services agencies project more poor, elderly and disabled Nevadans will seek government assistance, which would completely erase that $70 million surplus.

And it would take hundreds of millions of dollars to completely restore the salaries for 25,000 state, college and university workers who have taken 4.8 percent pay reductions — a prospect few think is realistic.

Sandoval isn’t the first governor to keep details of his budget-making process private. But since he began campaigning for office in 2009, Sandoval has relentlessly painted a rosy picture of the state.

His broad-stroke budget commitments now are reminiscent of his campaign, when he promised he would be able to let taxes expire without cutting essential government services. As a candidate, Sandoval never released a plan for how he would do it.

After he was elected, Sandoval tried to balance his budget by taking money from local governments and school district building funds. He was forced to pull that idea after an unfriendly Nevada Supreme Court decision, and he ultimately reneged on his promise to let the 2009 taxes expire.

In March, Sandoval announced that he would once again extend about $600 million in taxes for another two years.

On Oct. 15, state agency budget requests will be made public, giving an indication of where the planning process is headed. Sandoval’s final budget recommendation to the Legislature won’t come out until January.

Last week, Sandoval doubled down on his promise not to cut education in an interview with the Reno Gazette Journal’s editorial board.

"I meant it when I said we are not going to cut K-through-12 or higher education anymore," he said.

For education, however, a flat budget would mean budget cuts.

“It wouldn’t be enough,” Washoe County Superintendent Pedro Martinez said. “We all have cost increases we have to deal with, one way or the other.”

Martinez said he expects to ask the state for as much as $14 million to cover increased costs.

In Clark County, the School District expects $40 million in increased personnel costs and $8 million in water and fuel costs.

Other areas of state spending also are seeing an increase in demand.

The projected increases for Medicaid, the state’s health care for the poor, elderly and disabled, and Nevada Check Up, which covers children of low-income Nevadans, will cost $71 million over the next two years, according to a state policy memo issued by the governor’s spokeswoman in June.

That’s without expanding Medicaid under the Affordable Care Act, a decision Sandoval is still weighing.

The Nevada System of Higher Education Board of Regents also passed a budget with a $10 million increase over two years.

Chancellor Dan Klaich said it was fair to say a flat budget for higher education means no cuts with a qualifier.

“It means no cuts that we have control over,” he said.

Neither Sandoval’s budget director, Jeff Mohlenkamp, nor his new chief of staff, Gerald Gardner, were available for interviews this week.

His spokeswoman, Mary-Sarah Kinner, released the following statement: “The state is in the very preliminary stages of the budget process, and when there is more information, we will release it.”

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  1. He was elected on promises without any factual plans to back it up and people are surprised that promises have been broken?

    The public keeps making the same mistake each election, electing people on promises and not demanding facts and plans.

    We get what we deserve.

  2. Why do people buy this pap that not raising taxes and not cutting spending will fix our budget problems? This Governor is a typical GOP operative that is boxed in by the rigid ideology of the tea party. Look how he did an about face when he didn't support the changes HE asked for in welfare reform because it would help Obama. Sandoval is not a leader he is a follower and anyone who thinks he will lead us to a new tomorrow is sadly mistaken.

  3. Student enrollment projections may be decreasing as some of the illegals are leaving the state. What about the media hype that illegals are heading home? K-12 should have built in savings with lower enrollment. Providing the same funding does not guarantee step increases for employees--cities, counties, and school districts should be CUTTING COMPENSATION to firefighters, teachers, grade-level cuts for downgrading positions that can be performed by lower level staff. On the other hand, the administrative costs for "planning" and expanding Medicaid is gonna be multi-millions--DHHS has a repetitious reasoning that they want the same ratio of supervisors and analysts to field staff REGARDLESS OF ECONOMIES OF SCALE available.