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Budget deal provokes smiles, frowns
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LAS VEGAS REVIEW-JOURNAL CAPITAL BUREAU
Updated: Jun. 7, 2011 | 7:34 a.m.
CARSON CITY -- Anyone who attended the glad-handing gathering Wednesday when swarms of legislators and the governor announced their tax and spending agreement couldn't help but notice all the huge smiles.
Who had the bigger smile, Gov. Brian Sandoval or Senate Majority Leader Steven Horsford, D-Las Vegas? It had to be a tossup. The joyous crowd behaved like a fraternity before the homecoming game.
But some people in the crowd wore frowns.
"This was not a budget to be proud of," said Sen. Sheila Leslie, D-Reno , traditionally one of the most liberal lawmakers and someone always concerned about the least advantaged residents.
She noted a $1.2 million Family to Family program to help teach people to be better parents was gone, as was most funding for one autism program and the $5.7 million Senior Citizen Property Tax Rebate Program. A program to help problem gamblers was cut in half. Teachers and everyone else must take 2.5 percent pay cuts. Besides the pay cut, state employees get six unpaid furlough days a year.
CRITIC: REAL REFORMS LACKING
Then there was Geoff Lawrence, the policy analyst for the conservative Las Vegas think tank Nevada Policy Research Institute. Lawrence repeatedly has been attacked by legislators for his viewpoints during hearings.
Where were the vouchers to allow parents to take state money and send their children to the schools of their choice, he asked. That had been one of Sandoval's big objectives.
Where were real construction defect and collective bargaining reforms?
During floor debates on the construction reform bill Sunday, Assemblyman Cresent Hardy, R-Mesquite, said contractors still could be hit with paying attorney fees even if the judge awards the homeowner $1. Assemblyman John Oceguera, D-Las Vegas, countered by saying the bill would force judges to award attorney fees only to the prevailing party in a lawsuit.
Collective bargaining reform mainly consists of allowing governments and schools to reopen bargaining during economic crises.
"They tinkered around the edges but didn't do a lot of real reforms," Lawrence said. "Regardless of your viewpoint, there weren't major reforms."
He questioned how extending the time a beginning teacher can remain on probation can be considered a reform. Instead of having two, one-year periods as a probationary teacher, they now will be given three, one-year probationary periods to shape up.
"Basically we are stretching out tenure," Lawrence said.
What the Democrats have demanded for years, he said, was the reform of the state's tax structure into a resilient, broad-based system that would provide sufficient revenue in the decades ahead. That didn't happen.
The state's general fund budget for the next two years will be about $6.2 billion, essentially the same as current spending. The general fund budget, funded by state taxes and fees, received nearly all the attention throughout the session.
Total state spending for the next two years will be about $17.4 billion. That includes federal grants, fees and gifts. Highway funds are part of this spending. A lot of the money is Medicaid dollars, federal money to give health care to the poor, disabled and elderly.
Largely because $700 million in federal stimulus funds the state received over the past two years has not been reauthorized, total state spending for the budget period beginning July 1 will be down $500 million, a fact Sandoval emphasized repeatedly during the budget agreement announcement.
Nevada Health and Human Services Director Michael Willden expects his agency will end up with about a 7 percent spending increase -- much of it the result of large caseload growth for Medicaid and other programs. The number of people on Medicaid will hit 311,588 over the next two years, up nearly 30,000.
While some autism spending was cut, early intervention and other programs remain, Willden said. There will be a waiting list of 150 children in one program, he said. But Willden said layoff notices he sent to some employees just a week ago now must be retracted with notices that they still have jobs.
"All and all, we did fairly well," he said.
WHAT'S IN THE BUDGET DEAL?
■ 2.5 percent pay cuts for schoolteachers, state employees and university and college faculty and workers. State employees, university and college faculty and workers also must take six unpaid furlough days off a year, adding the equivalent of another 2.3 percent pay cut. Teacher salary reductions could be changed in collective bargaining.
■ 70 percent of businesses with payrolls of less than $250,000 won't have to pay any business payroll taxes. But companies with payrolls higher than that figure must continue to pay a 1.17 percent payroll tax.
■ Residents will continue to pay a 0.35 percentage point sales tax, raising about $282 million, that will go directly to the public schools. Businesses also will continue to pay $200-a-year license fees.
■ The governor will appoint and oversee the state superintendent of public instruction .
■ The 10-member Board of Education will become a board of seven voting members, four elected from Nevada's four congressional districts, and three appointed by the governor, Assembly speaker and Senate majority leader.
■ The "last in, first out" policy of laying off the beginning teachers first will end. Instead schools must consider several factors in determining who gets canned. Seniority will remain a factor, but teacher performance also will be considered. Fifty percent of a teacher's performance will be based on student achievement.
■ New teachers will be given three, one-year periods on probation, instead of two, before they are fired for unsatisfactory performance. Older teachers whose performance declines can become probationary teachers again, but they will be given two years to recover and receive three annual progress reports on their performance.
■ Funds to open the new $51 million Nevada State Museum at the Las Vegas Springs Preserve in September were allocated. But the Department of Cultural Affairs, which oversees museums and other programs, was eliminated with its duties being given to other agencies, specifically to the state Commission on Tourism.
■ State per pupil support of public education will increase. The state now provides an average $5,192 per year per pupil. That will increase to $5,263 this fall and $5,374 in fall 2012.
■ $3 million for mental health court programs will continue to be a state responsibility. Sandoval originally wanted counties to pick up these costs.
WHAT'S NOT IN THE BUDGET
■ A $1.5 million program to help problem gamblers was cut in half. Funds for this program come from a $2 annual fee on each slot machine. The program now will receive $1 a machine with the second dollar going to the general fund.
■ The $5.7 million property tax rebate program for low-income senior citizens was eliminated.
■ Full restoration of cuts to nursing homes. But instead of a $20-a-day cut as proposed by Sandoval, the final budget reduces daily state payments to nursing homes by $5.
■ The $38 million indigent accident fund for hospitals to treat people injured in accidents. As it has over the past two years, the state took this money, raised by property taxes in every county.
■ The health care subsidies that state employees receive if they retire before age 65. It will end for new employees hired after Jan. 1, 2010.
■ Full support for the Higher Education System of Nevada. About $80 million of a $167 million budget cut recommended initially by the governor was restored. But there still will be layoffs and fewer classes and programs for students. Students will be hit with a 13 percent tuition increase.
■ A bill to offer tax rebates to movie companies that film in Nevada was rejected despite pleas from people in the movie industry that the business the state would gain would more than offset any tax cuts. Most states now offer breaks to movie companies, but several, including Michigan, have reduced them in the wake of declining state revenues.
■ Counties still must provide about $14 million in services that formerly were carried out by the state. But that is far less than the $37 million originally sought by Sandoval.
Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.
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"I have subscribed to this paper for 16 years and I would like to know why every article I read in here has the Nevada Policy Research in it?"
Congrats on your 16 year subscription. That's quite an accomplishment! As for NPRI, I am not sure why I should care if they are connected to the Kochs or not. What I do like is NPRI's "Transparent Nevada" website. What a great resource! With all this talk of *transparency* in the 2008 election by Mr. Obama, we hardly see it in his policies. "Recovery.gov" is a joke. It's gobbledygook.
" Can you not write an article without asking the children who work for NPRI their opinion?"
I see one NPRI person quoted here, Geoff Lawrence. He appears to be about my age. I am 35 this year. I must be a child in your eyes too, and thus can't have an opinion? That's pathetic MicheleS!
N7V - all your comments would be spot on if this was 1940's Nevada. We've moved on. Live isn't anything like what you imagine in your simplistic, black and white world. People's needs are diverse and that's reflected in the need for government regulations and services. Higher education has grown in response to the changing world we live in - we need more than the farmers and scientists you require in yours. You seem like a smart person and that's what makes it difficult to understand your unrealistic views. Please explain.
I don't mind disagreeing with people, but I hate LIARS!
SOLD DOWN THE RIVER BY SANDOVAL, AND HE'S SMILING? WHAT A SCHMOE AND WE ARE ALL JUST SCHMUCKS.
Usually, with most insurance today, the amount the insurer pays the docs is already agreed upon. If you have insurance B, then it doesn't matter which doctor you go to, insurance B will pay the same. Only thing you can shop around is the health insurance check "Penny Health Insurance" for health insurance ideas to save money.
Vouchers cost the tax payer nothing but increases the general State fund.
Vouchers cover 75% of the money that would be paid anyway to cover a child's education in Nevada
The other 25% goes back to the State. Not to be obvious, but some people need it said, a savings for tax payers of 25 %.per child.
Also, parents win because they get a choice
Tax payers are not on the hook for new schools and maintenance, teachers' pay and benefits, and other "overhead" costs like transportation, etc.
The public schools have smaller class sizes.
The teachers' association doesn't like it because they lose dues, and that means power to them.
It is a shame that "..We the people..." couldn't use the oppurtunity of this gathering to cast a large net and put a stop to the culture of corruption we are enslaved by. How many men of Italian descent have been jailed for Racketeering when the amount they stole was nowhere near what these #&^%* have taken. America must start....somewhere..to correct the actions of our government. When you here "public servants" stating that it is just a billion dollars.....it is time for change.
We are currently in a position that only the brightest optimist can predict a successful conclusion to. Much more likely it will not culminate until our honor is lost and our economy broken. We cannot sit idley by and believe the gang of theives that got us here will get us out. This isn't the movies, this is our, and, our childrens lives we are talking about.
WAKE UP AMERICA, NOW. If we don't, we won't.
Please. I have subscribed to this paper for 16 years and I would like to know why every article I read in here has the Nevada Policy Research in it? Anyone who can Google for more than 5 seconds knows that the Nevada Policy Research Institute is a sham organization for the billionaire Koch Brothers. Unless they are giving this paper money, they why do you interview them every 2 minutes? Who cares what the Koch Brothers think about Nevada's fiscal policy? Let them go find some other 20 year olds to shape public opinion in some other state. Stop giving these guys so much space in here. Can you not write an article without asking the children who work for NPRI their opinion? I know it will be tough, but dig deep and find some real Nevadans and ask them what they think. These kids probably have lived here for 2 months.
The guy pining away for school vouchers is as much a joke as that proposal itself. Vouchers are simply a giveaway for the rich. Sandoval never seemed to take it seriously nor should he. he just has to placate the right. Hey, I don't take the bus, so I want my share of the subsidy in cash. And I promise it will go to my car payment.
The Constitutional protection for the mining industry and the state laws that allow huge deductions need to undergo changes. I am not advocating the Alaska solution of a 25% royalty on oil companies, although based on recent earnings reports, that doesn't seem to have had a negative effect on their profits.Two mining companies are planning on opening mines in the Comstock Lode and the Carlin Trace.
The issue was highlighted in a recent power point presentation at the Barrick Mining annual meeting. One of the mines highlighted in the power point was the Cortez Hills Mine in Northern Nevada. According to the power point, in 2010, the mine produced 1,140,000 ounces of gold (over 35 TONS) at a production cost of $312 per ounce. During the first quarter of 2011, the mine produced 366,000 ounces (over 11 TONS) of gold at a production cost of $220 per ounce. If you project a sale price of $1000 over cost of production,that results in a profit of over $1,500,000,000. Based on what the mining industry paid in taxes in 2009, the tax payment to the state of Nevada will probably be less than 50,000,000. The power point goes on to point out that the projected production from Cortez Hills for 2011 will be between 1.30 to 1.45 MILLION ounces (40-45 TONS)at a production cost of $235-245 per ounce. This is natural resource that should provide significant benefits to the citizens of Nevada. Unless the Legislature acts quickly, another two years will pass without any significant action to change the tax structure of the state.
In 2009, the mining industry paid 48,600,000 on gross revenue of 5,800,000,000. In 2010, the gaming industry paid 416,000,000 on gross revenue of 5,800,000,000. Mining pays about 10% of what gaming pays in taxes.