State agencies need $1.5 billion more than cap to maintain services | NevadaAppeal.com
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State agencies need $1.5 billion more than cap to maintain services

Even though state agencies complied with the governor’s mandate to cut general fund spending by 14 percent, proposed spending plans submitted to the budget office say those agencies need $1.5 billion more than that over the next two years to maintain services.

The additions are to handle caseload growth, federal mandates and inflation, which the state has no control over.

That means unless the state can increase revenues, those agencies will have to cut that much more out of their budgets, raising total reductions to more like 20 percent below the legislatively approved current budget.

Gov. Jim Gibbons was in Washington, D.C., and unavailable for comment, but spokesman Ben Kieckhefer said Gibbons hasn’t relaxed his adamant opposition to any new or increased taxes.

“The governor believes the state has to maintain its core functions with the revenue that’s going to be available,” Kieckhefer said.

He said taxing businesses would just create more layoffs and failures.

“Are we at the point where the governor is going to revise his position on raising taxes? The answer is no.”

He conceded, however, that if cuts are too draconian ” particularly in human services or the prison system ” it could result in lawsuits against the state.

Director of Corrections Howard Skolnik told the board of Prison Commissioners on Wednesday he doesn’t see how the prison system could cut deeper than 14 percent without endangering staff, inmates and the public.

He wasn’t alone. At that level of reductions, according to Health and Human Services Director Mike Willden, “we’re doing harm.”

Willden’s department is hardest hit by the so-called “rollups.” He estimated Medicaid inflation will add $88.3 million in costs over the biennium and the rising Medicaid caseload ” partly caused by the weak economy ” another $204.7 million.

Altogether, that means the Health and Human Services budget request totals some $500 million more than the target set by the governor’s office.

For prisons, the total request came to about $28.5 million over the target. But Skolnik has already outlined where he will get most of that ” the biggest chunk being an $18 million-plus saving by closing Nevada State Prison.

He has said he needs increases to ensure he can provide such basics as food and clothing for inmates, let alone the rising cost of health care for Nevada’s aging prison population.

Skolnik has also asked to add staff at Northern Nevada Correctional Center, saying it will greatly reduce overtime, which is paid at time and one-half.

The other area hard hit by “caseload growth” is Nevada’s public school system, which will need some $500 million added to its cap to handle the growing number of students and rising costs of utilities and other costs of doing business.

The one entity that refused to comply with the mandate to cut was the university system, which accounts for more than $425 million over the overage. Instead of reducing budgets by 14 percent, the Board of Regents submitted a request for a near 10 percent increase in general fund money.

Board members indicated they felt it is their responsibility to submit a request for what they actually believe is needed, adding that they would later trim it back to match the amount of money actually available for them.

Kieckhefer admitted the cuts will hurt, especially in human services.

“We’re not going to be able to help everyone who needs help and some people who have been receiving assistance are going to have it scaled back or cut off.”

He said Gibbons will get a full briefing on the agency requests and the various options agency heads and his fiscal staff have for him when he returns next week.

– Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.