Guinn aide predicts harsh demands on state coffers | NevadaAppeal.com

Guinn aide predicts harsh demands on state coffers

by staff

Nevada’s ongoing population boom combined with a possible slowdown in the growth of casino and sales taxes could mean difficult decisions lie ahead for Gov. Kenny Guinn, the Legislature and taxpayers, lawmakers have been told.

”Nevada is on the precipice of some very, very difficult decisions,” said Pete Ernaut, Guinn’s chief of staff. ”There are going to be some very, very difficult days ahead.”

Ernaut made his sobering comments Wednesday to a task force established by the 1999 Legislature to help improve and refine the long-range financial planning process for the state.

Ernaut said preliminary reviews of the needs in only two areas over the next eight years – public education and Medicaid – reveal a distressing financial picture.

For example, the Clark County School District, where a voter-approved bond issue will build schools to house 135,000 new students over the next several years, will need $650 million to $720 million a year more from the state general fund to educate them, he said.

The growth in Nevada’s senior citizen population and their resulting needs from the Medicaid program will require an infusion of $40 million to $50 million a year, Ernaut said.

”This means our state budget will double in eight years from those two programs alone,” he said.

Yet the state general fund, which relies primarily on sales and casino taxes to fund its programs, will likely grow in the 5 percent range over the next several years rather than the double digits seen often in the 1990s, Ernaut said.

State revenues will need to grow in the 10 percent to 13 percent range to keep up with just the basic growth for such things as students and prison inmates, he said.

”We can either panic or we can plan,” Ernaut said.

The Guinn administration is in the midst of a major budget review and planning process that will look out eight years to ensure that state government is ready for the challenges that lie ahead, he said.