State sets budget caps for agencies
March 24, 2012
Gov. Brian Sandoval’s budget office has issued General Fund budget caps for agencies excluding K-12 education that total $3.964 billion for the coming biennium.
Adding K-12’s current distributive school account funding for the biennium – about $2.3 billion – that would bring the total proposed General Fund budget for the next biennium to $6.25 billion – about the same as the current budget.
The memo to agency heads signed by Director of Administration Jeff Mohlenkamp says that there are continuing signs of economic recovery with revenues expected to exceed the economic forum’s projections.
“Despite these very positive signs, demand for the state’s safety net services has increased dramatically and continued high demand is expected,” the memo states.
As a result, Sandoval ordered agencies to build their General Fund budgets for the coming cycle at a maximum of double the Fiscal Year 2013 total.
According to the appropriations report, total General Fund for FY2013 is $3.099 billion. Deduct the $1.111 billion K12 appropriation, $6 million for salary adjustments and a couple of small one-time appropriations, and you get $1.982 billion. Multiplied by two for a biennial total, that generates the $3.964 billion.
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But the spreadsheet also restores the salary cuts and the suspended merit and longevity pay taken from state workers by the current budget. That adds $192.5 million to the total, which brings the non-K12 total cap to $4.15 billion.
Sandoval said during a news conference on the budget that he wants to make those who work directly for the state and for the system of higher education whole again financially.
The memo issued Friday allows departments to apply the targets “on a department wide basis,” effectively giving directors the ability to move money around within their programs. It says there will be exceptions made to the targets on a case-by-case basis.
And it says budget instructions for the Distributive School Account, highway-funded agencies including NDOT and NHP and agencies funded by court assessments will be developed in conjunction with those agencies.
Inflation-generated needs, caseload increases, federal mandates and court orders are all outside the caps.
The biggest issue on that list is the growing Medicaid caseload.
The state’s share of Medicaid totals about $1 billion in this budget cycle.
The cap for Health and Human Services is $1.9 billion for the coming cycle, but Medicaid could force the governor to increase that.
Human Services accounts for more than 31 percent of the state-funded budget and receives by far the most federal funding.
The university system is the second-largest recipient of General Fund cash, capped for the coming cycle at $946.5 million. With salary and other pay cuts restored, NSHE would get an additional $94 million in the budget.
The Department of Corrections accounts for $493.8 million of the General Fund. Fortunately for the state, budget officials say, inmate-driven costs are mostly flat – important because corrections is almost entirely General Fund money.
The spreadsheet also sets caps for the other two branches of state government. Judicial budget categories, most of which constitute district judge salaries, total just more than $61 million for the biennium. The legislative branch cap is $5.66 million.