Nevada officials detail solutions for $162 million budget shortfall

By Riley Snyder, Associated Press

Published Thursday, Jan. 22, 2015 | 10:36 a.m.

Updated Thursday, Jan. 22, 2015 | 4:15 p.m.

CARSON CITY — It might not please legislators, but Nevada budget officials said Thursday they have an answer for the state's $162 million budget deficit.

After announcing a revenue shortfall in December due to lower-than-expected gambling and mining tax revenues, budget administrators presented a plan to the Interim Finance Committee that could make up the deficit by the end of the fiscal year.

The plan, which needs approval by the Legislature, would move around $108 million in reserve funds, modify reserve funds for public worker's health insurance and cut reserve money allocated to higher education salaries.

Legislators weren't exactly pleased with the news.

"It feels like we're playing a shell game," Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, said during the meeting.

Chief among the concerns was the proposal to tap into departmental reserve funds. The budget office proposed taking nearly $80 million from those reserves, in addition to $28 million from Nevada's Rainy Day Fund.

The departmental reserves involve a number of state offices, including $23 million from the Nevada attorney general's office, $6 million from the health department, and another $23 million from the Nevada Department of Business and Industry.

State Sen. Pete Goicoechea, R-Eureka, expressed concern over taking reserve funds from the attorney general's office because federal action over sage grouse habitats could prompt costly court action that would be paid for via reserve funds.

A number of legislators on the committee said they were concerned about refilling the reserve funds over the next two years.

Assemblyman Mike Sprinkle, D-Sparks, said he was pleased that the budget office had a solution but worried about the state's ability to deal with unexpected emergencies.

"The concern I have is that there's nothing left," he said.

The budget office also proposed reducing reserve money allocated to higher education salaries by $6.6 million and saving $20 million by diverting reserve health insurance funds to help cover the deficit. Health packages for state workers won't be affected by the change.

Lawmakers said they expect to pass three to five bills in the first weeks of the legislative session to alleviate the budget shortfall.