If funding does not materialize in the 2009 legislative session to pay for the expansion of benefits to domestic partners starting July 1, 2009, including those of the same sex, and their children, the regulation will not take effect and the benefit will not be available.

The vote means the cost of the expansion will be included in the board's submission to Gov. Jim Gibbons for the 2009-11 budget.

If Gibbons does not include the cost in his budget, the Legislature would be asked to find the money to pay for the expansion.

The expanded benefit could be supported with state general funds, by increasing premiums charged to workers and other participants in the plan, or by cutting back on benefits.

Ben Kieckhefer, press secretary to Gibbons, said the program will not be in the governor's budget because of the cost. Gibbons has not yet taken a position on the policy issue, he said.

The state doesn't have the money now for the program, Kieckhefer said.

The vote was praised by the Gay and Lesbian Center of Southern Nevada.

"This decision opens the door for Nevada to recruit and retain the most skilled and talented employees," Executive Director Candice Nichols said. "For too long, Nevada has not been able to offer the same benefits package options to current and prospective employees and compete with other states for the most qualified employees."

The state would not be the first government in Nevada to offer health insurance benefits to domestic partners. Las Vegas is receiving an award this weekend for extending such benefits in 2005.

City Manager Doug Selby is scheduled to accept the Leadership in Government award from the Nevada Community of the Human Rights Campaign at 1 p.m. Saturday in Rainbow Family Park.

Henderson also offers domestic partner benefits to some of its employees, both same-sex and heterosexual couples, and has since the start of 2007.

North Las Vegas does not offer domestic partner benefits.

The original request to include domestic partners in the state's health plan came from the Nevada System of Higher Education.

University and college presidents told the board in 2007 that extending benefits to partners is essential to their ability to recruit top professors and administrators.

Before the discussion of the regulation, the board heard a report from state Budget Director Andrew Clinger, who told the panel to prepare its next two-year budget with the assumption that there will be no increases in state support for the health insurance plan.

Planning is under way for the new two-year budget, which will be submitted to the Legislature in February. It will take effect on July 1, 2009.

The state subsidy for current employees will be $626 per month starting July 1. The subsidy for retired state employees is $410 a month.

The amounts would not change under the scenario proposed by Clinger for the following two years.

Clinger called the scenario a "what if" plan to see what such a funding level would mean to the plan.

"In reality that's a cut," he said. "But I don't think it's a cut as significant as what we've asked state agencies to prepare."

State agencies have been asked to cut their budgets as much as 14 percent from anticipated budget levels for the 2009-11 budget. The cut, based on agency spending in the upcoming fiscal year, would amount to a little more than $500 million a year.

Leslie Johnstone, executive officer for the health insurance program, said holding the line on the state subsidy could mean cuts in the plan because medical inflation has been increasing about 10 percent per year.

During the discussion of the domestic partners regulation, board members expressed support for the expansion. The focus of the debate was where the funding will come from.

Little public comment was offered.

Assemblyman David Parks, D-Las Vegas, praised the board for considering the policy and urged it to move forward. Parks is the only openly gay member of the Legislature.

Board member Jacque Ewing-Taylor said the panel already voted earlier this year to cover domestic partners because of "basic fairness."

"I believe firmly that we need to go forward with that," she said. "If it survives the budget process, then we got what we asked for. If it doesn't, then so be it."

Board member Todd Rich, director of the state Personnel Department and a Gibbons appointee, agreed that the policy is the right thing to do but not in the midst of the state's budget problems.

Voting to expand benefits sends the wrong message, he said.

"I don't think this is the right time," Rich said. "I think it is irresponsible of us to do that when in the private sector people are losing jobs and losing benefits."

The regulation establishing the policy of covering domestic partners must win approval from the Legislative Commission, a panel of lawmakers that reviews proposed state regulations to ensure they conform with legislative intent, before it could take effect.

The regulation, but not the funding question, will come before the commission later this year.

Review-Journal writer Alan Choate contributed to this report. Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900.