The Legislative Interim
Finance Committee voted Monday to move the entire Rainy Day Fund into the
General Fund where it can be used to offset revenues lost to Nevada’s economic
The vote was party line with
Republican members arguing they would like to see at least some of the proposed
cuts the governor plans to make before taking the entire $401.18 million that
will cover most but not all the projected losses in gaming and sales tax
State Finance Director Susan
Brown told lawmakers Gov. Sisolak’s administration is working to identify and “capture”
savings from not only ongoing expenses but one-shot projects, capital
improvements and other things that can be delayed. She did not have details on
what cuts will finally be ordered and how much they will generate.
But critics pointed out only
six weeks remain in the fiscal year, meaning the amount the state can save this
fiscal year might be small.
They also pointed out the shortfall in fiscal 2021 could be much larger, up to $1 billion.
“I understand we’re going to
have to do it but before we do that, I would like to see the cuts,” said
Assemblyman Jim Wheeler, R-Gardnerville.
He was joined by Senate Minority Leader James Settelmeyer, R-Minden, who said the administration announced no plan to reduce spending in March or April and, “in May, still no plan to reduce costs.”
IFC Chairman Assemblywoman
Maggie Carlton, D-Las Vegas, said the state needs the Rainy Day Fund
transferred to the General Fund so it can pay the bills the state is obligated
to pay during the rest of this fiscal year.
She was joined by Assembly
Majority Leader Teresa Benitez Thompson, D-Reno, who said as far as she
understands, “if we don’t move this money over, we won’t be able to make those
payments for education, NSHE and Medicaid.”
That includes not only the
reduced revenues the state receives but the substantial losses to the Local
School Support Tax and other resources that go directly to the state’s 17
school districts. The state is required by law to make up any shortfalls in
those revenues and that money also comes from sales taxes.
Brown said the school
district normal payments come to about $115 million a month.
Sens. Ben Kieckhefer of Reno
and Pete Goicoechea of Eureka, both Republicans, said they can support moving a
chunk of the $401.2 million but not all of it until they see some of the
“And I haven’t heard yet that
we actually have a cash flow problem that needs this transfer,” said
He said with the $836 million
from the CARES Act in the treasury, “I assume our treasury is fairly flush at
“The argument that we need to
pay our bills doesn’t seem to carry water when we have cash in the treasury.”
Brown told the panel the
state can use the COVID-19 money to cover cashflow but not to balance the state
budget so anything taken from that pot would have to be paid back.
Goicoechea said he could
support moving half the Rainy Day Fund but that, if they need to move more,
they have multiple meetings before the end of June. He said he feared they were
“hanging all of this” on the hope that another stimulus package will pass
Congress., but might not.
Assembly Minority Leader
Robin Titus, R-Wellington, said one of her concerns was the impact draining the
state’s reserves would have on Nevada’s bond rating, that it might end up
costing the state more money in the end.
Assembly Speaker Jason
Frierson, D-Las Vegas, said the shortfall just this fiscal year will be some
$200 million over the $400 million in the Rainy Day fund and that it makes no
sense to withhold that money at this point.
Carlton argued that to, “put
the decision off would be irresponsible at this time.”
In addition, the committee
approved acceptance of $117.2 million in School Emergency Relief funds authorized
by the CARES Act, a significant amount of which could pay for iPads, laptops
and other equipment for K-12 students working on classes from home. That money
comes with Maintenance of Effort requirements that could make the state cover
similar amounts of funding for the next two fiscal years.
Lawmakers also agreed to
accept $5.42 million in unemployment assistance to help reduce the backlog of
unemployment benefit payments to Nevadans.