Gov. Jim Gibbons on Monday rolled out a $7 billion general fund budget plan which, although largely constructed before his election, includes his own fingerprints in new anti-methamphetamine and education programs.
It also promises two tax reductions in the modified business tax.
That, however, is just the state general fund portion of the budget. When highway funds, federal funds and other sources of revenue are all added in, the total two-year spending plan is more than $18.2 billion.
The budget diagrammed by Director of Administration Andrew Clinger is about 15 percent larger than the current two-year spending plan. The general fund portion is 19 percent higher - most of that in what officials refer to as "roll-ups" - increases caused by inflation, lease and other contractual cost increases and mandates.
One-shot expenses, supplemental appropriations and other expenditures to close out this biennium bring total spending to just about $6 billion - just $1.6 million below the statutory spending cap. The total in proposed spending for the coming two-year budget cycle, however, is $158 million below the projected 2007-09 spending cap.
This is the first time that cap has been a factor in the budget since it was created by the 1979 Legislature.
Gibbons called on lawmakers to reduce the modified business tax from 0.65 percent to 0.62 percent. That tax is currently 0.63 but that sunsets July 1 unless lawmakers act. The proposal would reduce state taxes and, therefore, revenues to the treasury by $28.2 million over the biennium. He also wants to eliminate the $1,750 per branch excise tax on Nevada's banks, which would cut another $5.9 million over the next two years.
The proposed budget retains many of the proposed expenditures put in the budget by outgoing Gov. Kenny Guinn, including $170 million for highway construction in Las Vegas and $110 million to jump-start the Health Sciences Center project at the university system.
The biggest addition is $60 million Gibbons wants for a pilot program to "empower schools and decentralize school budgeting" in 100 Nevada schools. While details about the pilot project were sketchy at best, it is apparently based on a concept already being tried in Canada, New York City, Houston and San Francisco.
The money, however, isn't new funding. It was taken from the added retirement incentive budget provided to get more teachers into at-risk schools.
Gibbons also called for $17.4 million to fund an anti-methamphetamine program in Nevada, headed by a working group in the governor's office that would be charged with providing recommendations to the Legislature by April.
The base general fund budget for the coming two years is $5.5 billion. Add to that, $372 million in caseload growth, $127 million in inflation and mandated costs, $180 million in other maintenance items such as rising health insurance costs.
Gibbons retained Guinn's plan to give solid raises to state workers and teachers, but change it from 3 percent each year to 2 percent the first year and 4 percent the second. That adds another $279.6 million, bringing the total to $6.5 billion.
The change saves about $30 million in state revenue and $20 million a year in other funds. Gibbons has proposed using that money to begin covering the unfunded liability the state has to provide health benefits for retiring state workers.
Enhancements such as the anti-drug programs and capital improvement costs, along with the $20 million estimated cost of the 2007 Legislature add another $510 million more to the total.
Probably the fastest growing single area of the budget is the Department of Corrections, which will receive more than $300 million in construction projects under the spending plan, including plans to double the 500 beds in the women's prison. Prisons will also get more than 330 new employees to handle projected inmate growth of nearly 9 percent.
Health and Human Services programs also increased significantly, requiring the addition of more than 330 new employees and a 22.6 percent increase in spending. Among the key increases there is a 24 percent raise over the next four years in the Medicare fee schedule for physicians and annual increases in the daily foster care rates.
And the plan includes $30 million for the Department of Motor Vehicles to implement the federal Real ID national identification system. That system requires states implement much tighter identification requirements for all residents in over the next few years.
The Senate Finance and Assembly Ways and Means Committees will begin several days of hearings to get an overview of the proposed budget today.
The Legislature itself opens for business Feb. 5.
• Contact reporter Geoff Dornan at email@example.com or 687-8750.