THE FOURTH DAY

                               

Carson City (Saturday), June 28, 2003

    Senate called to order at 11:34 a.m.

    President Hunt presiding.

    Roll called.

    All present except Senator Nolan, who was excused.

    Prayer by Senator Rawson.

    Our heavenly Father, we are grateful again for a beautiful day and another opportunity to be about our business. We ask Thy Spirit to be with us as we go through this process. Help us to be vigilant of our principles and ideals. Help us to dispatch our work and to reach a final solution with an idea of fairness and with everyone in mind. Help us in this process to maintain an appropriate relationship and good feelings towards those with whom we work. We need Thy help, and we appreciate Thy presence. We ask You to be with us in this process. In the name of Thy Son,

Amen.

    Pledge of allegiance to the Flag.

    Senator Raggio moved that further reading of the Journal be dispensed with, and the President and Secretary be authorized to make the necessary corrections and additions.

    Motion carried.

    Senator Raggio moved that the Senate resolve itself into a Committee of the Whole for the purpose of considering the budget spreadsheet, with Senator Raggio as Chairman and Senator McGinness as Vice Chairman of the Committee of the Whole.

    Motion carried.

IN COMMITTEE OF THE WHOLE

    At 11:45 a.m.

    Senator Raggio presiding.

    Budget spreadsheet considered.

    The Committee of the Whole was addressed by Senator Raggio; Gary L. Ghiggeri, Senate Fiscal Analyst; Senator O'Connell; Senator Rhoads; Senator Titus; Senator Care; Senator Coffin; Senator Tiffany; Senator McGinness; Senator Mathews; Senator Rawson; Senator Neal; Senator Carlton; Senator Cegavske and Senator Washington.

    Senator Raggio:

    At this time, we will be discussing the budget. Senate Fiscal Analyst, Gary Ghiggeri, will discuss the points in the budget with the Committee of the Whole.

    Gary L. Ghiggeri (Senate Fiscal Analyst):

    During the past few days, staff has had a number of inquiries concerning appropriations of General Fund dollars for the 2003-2005 biennium as they compare to the 2001-2003 biennium. Staff has prepared a schedule that compares the 2001 biennium to what the 2003 Legislature approved for the 2003-2005 biennium.

    General Fund appropriations have been adjusted. The Distributive School Account (DSA) shows a transfer of approximately $43.8 million dollars from 2003 to 2002 due to the shortfall experienced in that year. If the Senate will recall, there was a supplemental appropriation for fiscal year 2003 which was approved by the Legislature for $75 million. A portion of that supplemental appropriation was to replenish the $43.8 million that was transferred from fiscal year 2003 to 2002 to cover revenue shortfalls in the LSST for fiscal year 2002.

    Senator Raggio:

    That was the State’s guarantee of the sales tax that did not materialize in order to fund the DSA.

    Mr. Ghiggeri:

    This is correct. It is $43.8 million.

    Supplemental appropriations total $92.2 million. Those were supplementals approved by the 2003 Legislature. The largest portion of those supplementals was the $75 million approved for the DSA. The Inter Governmental Transfers (IGT) transferred to Medicaid was $18.6 million. Those available reserves were utilized to match federal Title XIX dollars to cover increased costs in the Medicaid budget. Had the reserves not been available additional General Fund dollars in that amount would have been required to match the federal dollars.

    Also, $12 million was added to fiscal year 2002 and $10.4 million was added to fiscal year 2003 for TANF. Those funds were added to cover increased costs in the TANF budget that were incurred in fiscal year 2002 and 2003 as a result in the increased case-load growth.

    The amount per appropriations report reflects the amount of General Fund appropriations as approved by the 2001 Legislature. That is $1.826 billion in fiscal year 2002 and $1.970 billion in fiscal year 2003. The total reflects the appropriations as incurred in those fiscal years with a difference of $55.3 million in fiscal year 2002 and $77.8 million in fiscal year 2003 or $133.1 million more than what was originally approved by the 2001 Legislature. The budgetary transfers and the supplemental appropriations explain where that funding came from.

    The amount of increase for fiscal year 2004 over fiscal year 2003 is approximately 12.7 percent. The increase for fiscal year 2005 over fiscal year 2004 is an additional 10.2 percent for a total biennial increase of 23.4 percent over the 2001-2003 biennium.

    Senator Raggio:

    This is all General Fund?

    Mr. Ghiggeri:

    Yes, this is all General Fund. Appropriations have been broken into functional areas consisting of Constitutional Agencies; Finance and Administration; Education, which contains the University and Community College System; Distributive School Account; Human Resources; Commerce and Industry; Public Safety; Infrastructure; and Special-Purpose Agencies. Staff has attempted to show the increases in spending in fiscal year 2003 over fiscal year 2002. The percentage of the total General Fund appropriation for each of those functional areas as well as the major sub-functions within those areas is provided for fiscal years 2004‑2005. There is a comparison between the 2003-2005 biennium and the 2001‑2003 biennium with the percentage increases noted.

    Senator Raggio:

    The primary interest for the Committee would be in fiscal year 2004-2005 and the biennium for 2003-2005 with in that category with interest being in the percentage of increase. The dollars and the percentage of increase for each element in the budget are of importance to this discussion.

    Mr. Ghiggeri:

    That is correct.

    Senator Raggio:

    In the 2003-2005 biennium, there is a total percentage of increase for the Executive Branch of 13.5 percent. There is a total percentage of increase for the courts of 31.5 percent. In Finance and Administration, there is a large increase in the percentage for the Department of Taxation. Let us discuss the extent of that increase in the Department’s budget.

    Mr. Ghiggeri:

    Included in the Department of Taxation’s ongoing operating appropriation is $12.5 million for fiscal year 2004 and $20 million in fiscal year 2005 for a total of $32.5 million over the 2003‑2005 biennium for costs anticipated to be incurred as a result of implementing a new tax plan, whatever it might be, by the Legislature. Had those costs not been funded, the amount of growth of the Department of Taxation would have been substantially less than what has been reflected.

    Senator Raggio:

    As to fiscal year, 2004, what portion of that General Fund amount was the cost of the implementation?

    Mr. Ghiggeri:

    It was $12.2 million.

    Senator Raggio:

    In the second year, 2005?

    Mr. Ghiggeri:

    It was $20 million.

    Senator Raggio:

    That is a total of $32.2 million required by the Department of Taxation for the implementation costs of a new tax plan.

    Senator O'Connell:

    Would Mr. Ghiggeri address Human Resources for the next budget cycle including the area of expenditures where there is an increase of 116.6 percent in the Department of Human Resources Director’s Office?

    Mr. Ghiggeri:

    The increase in the Human Resources area for the Director’s Office reflects the Governor’s recommendation and the Legislature’s approval of the establishment of a new Grants‑Management Unit within the Director’s Office of the Department of Human Resources. It reflects a transfer of Community-Based Services from the Department of Rehabilitation budget to the Director’s Office budget. The Grants-Management Unit is $2.9 million in each year of the 2003‑2005 biennium. The Community-Based Services are $2.6 million in fiscal year 2004 and $2.9 million in fiscal year 2005. These are combinations of some programs that previously existed in the Director’s Office with the largest cost attributed to the transfer of Community‑Based Services to the Director’s Office.

    Senator Raggio:

    That is a total of $16 million over the biennium. That is due to the reorganization of the transfer of Community-Based Services and putting the grant application program into the administrator’s office.

    Mr. Ghiggeri:

    Community-Based Services, as reflected in the Rehabilitation Division budget for fiscal years 2002-2003, were $2.2 million in each year of the 2001-2003 biennium. There were cost increases when they were transferred to the Director’s Office to provide additional services to clients. That is the largest increase in the Director’s Office. There should be a corresponding reduction in the Rehabilitation Division budget. There is a 38.4 percent decrease from the 2001‑2003 biennium to the 2003-2005 biennium.


    Senator Rhoads:

    What percent of the 30.2 percent increase in education is attributed to growth?

    Mr. Ghiggeri:

    I cannot answer that question without research.

    Senator Titus:

    Under Public Safety in the Department of Prisons, there is 10.2-percent growth over the biennium. Is there a plan for an early release of prisoners if we do not appropriate this money?

    Mr. Ghiggeri:

    The Department, to my knowledge, does not have a plan for the early release of inmates. The funding for the Department of Prisons budget, or the Department of Corrections budget, has been approved by the Legislature and has been signed by the Governor. To staff’s knowledge, there is no roadblock for providing funding for the continued operation of the prisons. The only funding staff is aware of that is currently in jeopardy is the funding for the Distributive School Account (DSA) and the class-size reduction program. Neither of those pieces of legalization has been approved nor have they been signed by the Governor.

    Senator Titus:

    If the budget is not completed or the appropriations have not been completed, then there will not be an early release of prisoners, but what about the early release of parolees? I am concerned about public safety if we do not get busy and get this taken care of.

    Mr. Ghiggeri:

    Similar to the Department of Corrections budget, the Parole Board’s budget has been approved and signed by the Governor. They have funding to continue operations without approval of a tax plan at this time. The Governor has the authority to ask agencies to cut spending based on reduced funding.

    Senator Care:

    In the 2003-2005 biennium, there is a decrease in the Veterans’ budget by 17.7 percent. Can you explain what has been cut from this program?

    Mr. Ghiggeri:

    That is the cost for the operations of the Veterans’ Nursing Home. That budget, when approved by the 2001 Legislature, did not provide for full collections of third-party payors for care. The budget was substantially revised by the Legislature during the review.

    Senator Raggio:

    The receipt of the federal funding had been delayed.

    Mr. Ghiggeri:

    There is some additional federal funding that has been incorporated into the operation of this budget for the Veterans’ Nursing Home. It was approximately $1.3 million in General Fund dollars that were replaced with federal funding from Medicaid and other sources. The Veterans’ Administration recently provided certification for the operation of the Veterans’ Nursing Home. The State will receive about $500,000 for care that was provided during this last fiscal year.

    Senator Coffin:

    There is an occupancy problem in that budget, and they had not filled all of the beds yet. That was a major part of it.

    Mr. Ghiggeri:

    That is correct. This provides for an escalation of the filling of the beds over the biennium.

    Senator O'Connell:

    Would you give us information on the DMV budget and the 52.9 percent increase?


    Senator Raggio:

    We are looking at the portion of the DMV budget that is General Fund. That is only $45,000. Is that the one you are referring to?

    Mr. Ghiggeri:

    That is for the field services budget for the Department of Motor Vehicles. That is funding that is provided out of the General Fund for voter registration when a motorist registers their vehicle or obtains a drivers license. The Department of Motor Vehicles can provide for voter registration. This amount was increased from $15,000 per year to $23,000 per year in the 2003‑2005 biennium. There was a change in the forms for voter registration that necessitated this increase.

    Senator Raggio:

    That was a good question because some of the comments the Chair has heard is about the large increase in DMV funds which is all highway funding and has nothing to do with the tax plan or the General Fund. This is the only part of the DMV budget that is in the General Fund.

    Senator Tiffany:

    When you look at the 23.4-percent total increase, how did we get from $3.75 billion to $5 billion which is a 35 percent increase, and yet, there is only a 23.4-percent increase?

    Why was the University budget left out of the discussion?

    Mr. Ghiggeri:

    The University budget is noted under UCCSN expenditures.

    Senator Tiffany:

    I understand, but how did we get from $3.75 billion to $5 billion in General Fund increases? That is a 35 percent increase not a 23.4 percent increase as indicated. That is more than we increased last year, which was an 18 percent increase.

    Mr. Ghiggeri:

    I would need clarification on that $3.75 billion figure. What I show as being approved by the 2001 Legislature for on going costs is $3.796 billion. It is adjusted by the additional $133 million in supplemental appropriations as was previously discussed. That increases the spending availability even though the IGT funds are not General Fund dollars and the TANF funds are not General Fund dollars, they replace General Fund dollars. Had those dollars not been available, the Legislature would have had to come up with $41 million. The comparison is between the $4.8 billion and the $3.9 billion to arrive at the 23.4 percent.

    Senator Tiffany:

    I am not certain if anyone understood what was just said, but from what I understand, we started with $3.9 billion and went to $4.8 billion in fiscal years 2001-2003 as opposed to $3.7 billion and increasing to $5 billion in fiscal years 2003-2005.

    Mr. Ghiggeri:

    That is correct.

    Senator Tiffany:

    That is what you say equals the 23.4 percent increase over the two bienniums.

    Mr. Ghiggeri:

    That is correct.

    Senator Tiffany:

    We added additional funding from the Economic Forum to roll that original amount of $3.75 billion to the $3.9 billion.

    Mr. Ghiggeri:

    There was $92.2 million in supplemental appropriations added. The largest of those appropriations was $75 million for the DSA. The next largest supplemental appropriation was $11.7 million for Medicaid for caseload and county match. There is $2.7 million for the Welfare Division, $1.1 million for DCSF for youth and community services, $740,000 for rural clinics, $610,000 for the Supreme Court and a number of miscellaneous supplemental appropriations that were less that $100,000.

    Senator Tiffany:

    Where did the revenue come from, because that was not in our current revenue projections?

    Mr. Ghiggeri:

    The $92 million came from the General Fund. The General Fund received $135 million transfer from the rainy-day fund. Had that transfer not been made from the rainy-day fund, that $92 million would not have been available to make the supplemental appropriations.

    Senator Tiffany:

    Our last year of the biennium grew more than the 18 percent. If this General Fund expenditure is added on, you are increasing the $3.75 billion to $3.9 billion.

    Mr. Ghiggeri:

    The 8.8 percent growth from 2002-2003 includes that additional funding. I do not have the growth number from 2001-2002 with me.

    Senator Raggio:

    That is a good question. Many are not aware that this amount was required to complete funding of the existing budget for fiscal years 2002-2003. Of the supplemental appropriations, $75 million of the $76 million was the State’s obligation to fund the Distributive School Account (DSA). There was no choice. To get to this point, we used up the only real resource we had, the $135 million set aside in the rainy-day fund. The public does not understand this, and I do not think everyone in the Legislature understands this. It is sometimes difficult to understand if someone has not been in the budget process. This information needs to be noted.

    Senator McGinness:

    There has been talk that the community college budget went up 42 percent, but I saw newspaper ads saying it only went up 24 percent. It is really 37.7 percent. Is this the final number?

    Senator Raggio:

    That is not just for community colleges. That is for the University and Community College System of Nevada’s budget.

    Mr. Ghiggeri:

    In the growth for the University and Community College System for the 2003‑2005 biennium, you will find General Fund appropriations that are made because the State tax funding for the University and Community College System is being deposited into the General Fund for the 2003-2005 biennium. That amounts to $45.8 million in fiscal year 2003, $46.9 million in fiscal year 2004 and $43.4 in fiscal year 2005.

    Senator Raggio:

    There is about $90 million that would have ordinarily been estate tax funding that has been replaced by General Fund money. To the extent that some of the estate tax funding is received, would that revert?

    Mr. Ghiggeri:

    If the estate tax was not deposited in the General Fund, the corresponding increase in General Fund appropriation would not be provided; the increase would be reduced from the 37.7 to 25.2 percent.

    Senator Titus:

    I realize this is General Fund money, but could we discuss were the tobacco-settlement money is and how it fits into this.

    Mr. Ghiggeri:

    I am not prepared to discuss that. However, most of the tobacco-settlement money will go to the millennium scholarship.

    Senator Raggio:

    Forty percent goes to the millennium scholarship. There is a percentage, approximately, 25 percent that goes somewhere else.

    Mr. Ghiggeri:

    You will see that reflected in the Aging Services budget and in the Health Division.

    Senator Raggio:

    I thought it was important to get this information to you because there has been much information around. Some of it has been gratuitous; some of it has not been accurate.

    Senator Mathews:

    Does the other House have this same information?

    Mr. Ghiggeri:

    I provided a copy to Mr. Stevens this morning.

    Senator Mathews:

    Yesterday, I heard their numbers were different from ours.

    Mr. Ghiggeri:

    I have not heard anything from Mr. Stevens that would indicate the numbers were different.

    Senator Raggio:

    If there are any changes, I will see it is brought to the attention of the Senator.

    Senator Coffin:

    Does anyone have a detailed list of cuts he or she would like to make in this budget?

    Senator Raggio:

    That is a good question, but not the purpose of bringing us here, today. I do not want to put anyone on the spot as to what cuts should be made. Before that issue becomes an issue we need to address, we should have this basic information as to the General Fund.

    Senator Coffin:

    I do understand that, and I do not wish to be argumentative or impertinent, but I do want to know if someone in this body has a list of cuts prepared for our examination having been given months to prepare such a list.

    Senator Raggio:

    If anyone wishes to address Senator Coffin’s question, that is fine.

    Senator Rhoads:

    Not on that issue, but is the bottom line of the budget increase 23.4 percent compared to two years ago?

    Senator Raggio:

    The General Fund need has increased by that amount for the reasons indicated, not just growth but for replacement of funding that otherwise would have been received.

    Senator Rhoads:

    What has been the typical increase over the last several bienniums?

    Mr. Ghiggeri:

    I cannot guess at that figure. I would have to research the answer.


    Senator  Rawson:

    In the 2001-2003 biennium, the increase for education was 52.6 percent. It is 30.2 percent this time. Comparing 2001-2003 biennium for total human resources, the increase was 28 percent last time and 20 percent this time.

    Senator Raggio:

    The comparisons are for the last biennium and the next biennium.

    Senator Neal:

    What percent of the total budget is education?

    Mr. Ghiggeri:

    In 2003-2005 biennium, it is 55.5 percent. For the 2001-2003 biennium, it is 52.6 percent.

    Senator Neal:

    Should the total of all percentages added together equal 100 percent?

    Mr. Ghiggeri:

    It should.

    Senator Neal:

    What would be grades K-12 percentage?

    Mr. Ghiggeri:

    Grades K-12 is in the DSA and is 33.6 percent for 2003-2005 biennium and 33.2 percent for the 2001-2003 biennium. Added to grades K-12, to get a true cost, you could add the No Child Left Behind funding which is 0.3 percent. The Department of Education funding is another 0.7 percent.

    Senator Neal:

    Looking at the percentage figure to the right of the total, which is 33.6 percent for fiscal years 2003-2005, what does that percent figure of 24.9 percent represent?

    Mr. Ghiggeri:

    That represents the percentage of growth from the prior biennium.

    Senator Carlton:

    Referring to education, I would like some more information on what I have heard termed the “hold harmless” language we implemented for some of the rural school districts. I remember part of the discussion from earlier this session, but I do not remember the entire discussion. What dollar amount might be associated with that?

    Senator Raggio:

    My recollection was that the cost of retaining “hold harmless” for a two-year period for those districts affected was somewhere between $5 million and $6 million as compared to “holding harmless” for just one year.

    Senator Carlton:

    The reason for “holding harmless” was that there was a decline in the number of students in a district, but yet, we do not want the district's money to decline that quickly because they still have the same amount of overhead costs no matter the amount of students.

    Senator Raggio:

    The purpose was to recognize that some school districts that lose enrollment could not look that far ahead. They have contracts with teachers. That was the original purpose of “hold harmless” for a two-year period.

    Senator Carlton:

    How many counties would be able to apply for that?


    Senator Raggio:

    About 14 counties.

    Mr. Ghiggeri:

    There are quite a few. I do have that information available. The “hold harmless” funding is not specifically budgeted within the DSA account. There is no funding specifically provided for the “hold harmless” cost in the budget.

    Senator Carlton:

    Therefore, it could be more than the $4 million to $5 million depending upon the changes over the next two years in those counties.

    Mr. Ghiggeri:

    I do not want to say it could be more or less. There is no funding specifically provided from the General Fund to cover that cost. That is something that is either eaten within the existing budget, or there is additional funding provided. Part of the supplemental need required this session had to do with part of the cost of the “hold harmless” provisions.

    Senator Carlton:

    Would that money come from the more solvent school districts and go to the less solvent school districts? Where would the money be coming from?

    Senator Raggio:

    It does not come from school districts. It is part of the General Fund.

    Mr. Ghiggeri:

    It comes through the DSA. To put a finger on the source of where it comes from would be difficult.

    Senator Raggio:

    The DSA included the amounts necessary to fund the planned raises for education including teachers and others. In the general government budget, the 1-percent increase for State employees is in the second year of the biennium. Those are included and are additional amounts.

    The general government budget has been passed by the Legislature. Are there sufficient revenues in the event of a court case because there is a constitutional duty to fund budgets that have been passed? The Chair understands that with respect to the budget that has already passed, there are sufficient revenues existing to fund the budget.

    The education budget is comprised of two parts, the DSA and the class-size reduction part. The other House has not acted on these. Of that which has not been passed, what is funded by existing revenues, what has been signed and what remains to be funded with respect to the education budget?

    Mr. Ghiggeri:

    The DSA and class-size portion of the executive budget is $746.7 million in fiscal year 2004 and $884.2 million in fiscal year 2005. Approximately, $108.9 million of that in fiscal year 2004 and $117.1 million in fiscal year 2005 is attributable to the class-size reduction program. The budget shortfall or the budget funding need is $850-860 million. Approximately, $350 million of that is required in fiscal year 2004, and approximately, $509 million is required in fiscal year 2005. Funding for the DSA budget exceeds what the shortfall is in funding in the first year of the biennium. We are short by $350.4 million in the DSA budget in fiscal year 2004. The DSA budget is $746.7 million. There is insufficient funding to approve it.

    Senator Raggio:

    There is insufficient funding to fund the DSA in fiscal year 2004, at the present time, in the amount of $250 million.

    Mr. Ghiggeri:

    It would be closer to $400 million in 2004. There is sufficient funding to fund the class size budget for 2004-2005. Those are only $108 million and $117 million.

    Senator Tiffany:

    There was a requirement removed for extra General Fund money but was passed off as fees. I have tried all session to get the total on fees. There are DMV fees, Supreme Court fees, real estate fees, wildlife fees and health care division fees. I would like to know what the total of those fees are taken to supplement the General Fund that adds up to the spending costs.

    Mr. Ghiggeri:

    I do not have that information with me, but I can explain in general areas where the funding went from the fee increases. A large portion of the fee increases went into the court budgets to fund additional costs in the court budgets. Some of that was for computer enhancements. It was for expansion of the Drug Court and to replace lost county and federal grant funding that was utilized for the operation of the Drug Court. There was significant fee revenue placed in the wildlife budget to continue the operation of that budget for the 2003-2005 biennium.

    Wildlife operates almost exclusively on fee revenues. There is a small amount of the General Fund revenue in there. The Governor increased the amount of General Fund money in the wildlife budget to replace lost room tax funding. The Legislature removed the increased General Fund money and replaced that with the spending authority out of the Wildlife Reserve Account when it closed that budget.

    Senator Tiffany:

    I would like to get the total since I requested it multiple times. There is a minimum of five agencies―DMV, courts, real estate, wildlife and health division. I would like to have that number.

    Mr. Ghiggeri:

    I can have that for you.

    Senator Raggio:

    I know we are asking you to do many things but could you make this information available to us? Put them all together so that we know what additional fees are involved. We know the Secretary of State’s proposed increase in fees are part of the budget funding needs.

    Senator Cegavske:

    Could we find out what the total revenue is expected from the 1-cent property tax? What projects would that fund?

    Senator Raggio:

    There are two property increases. The first one is a result of the public vote for parks. That is a 1-cent increase. The other is the addition 1 cent added for capital improvement projects.

    Mr. Ghiggeri:

    It is between $5 million and $6 million for each cent. It would be difficult if not impossible to assign what specific project that penny will fund. If you look at the capital improvement program and assume if it was reduced by “X” amount of dollars and pick the projects to eliminate, that would show you what would be funded.

    Senator Raggio:

    Each cent added results in a General Fund obligation of about $5 million to $6 million.

    Senator Washington:

    In the Human Resources Division, in the Director’s Office, there is a 29.6-percent increase from the last biennium. What is that increase?

    Senator Raggio:

    Is that a $16 million figure?

    Mr. Ghiggeri:

    That was an increase in spending for the Equal Rights Commission. Funding increased from $858,000 per year to approximately $1.1 million in each year of the biennium.

    Senator Neal:

    In respect to Senator Tiffany’s question about the fees, am I to understand the import of that question is that the fees are not reflected in the budget?

    Mr. Ghiggeri:

    Fees are reflected in the authorized expenditure in the budget. The fees that do not flow into the General Fund are not reflected in the General Fund appropriation. If fees are increased and they flow into the General Fund, they will be reflected in the increase of the General Fund. The Governor had recommended the real estate fees be increased. Part of that increase was to cover a portion of an automated licensing system. A portion of that funding was to flow into the General Fund. That was approximately in excess of $200,000 per year.

    Senator Titus:

    The extra 1-cent property tax that was approved in Question 1 by the voters was supposed to be used for the purchase of open space and the development of trails. In the last days of the 72nd Legislative Session, an amendment was added in conference that put in $150,000 for a fair ground in Panaca and another $150,000 or $ 130,000 for a cemetery in Virginia City. Can you take money away from a bond question approved by the voters? Is that subject to challenge?

    Mr. Ghiggeri:

    I cannot answer that question. I did not realize that had been done until that was brought to my attention. That would be a question for the Legal staff. I had no knowledge of that occurring until it was brought to my attention.

    Senator Raggio:

    We can refer that to Legal.

    Senator Titus:

    I would like an opinion on that.

    Senator Rawson:

    I want to comment on the questions about “hold harmless.” Originally, it was instituted with 10 or 11 districts available for that funding. There were some limiting proposals brought forth during the 72nd Legislative Session. I do not know what the final determination was. When we discussed this in the budget, there were seven districts still eligible for “hold harmless.” The Assembly added a restriction that the district must decrease its population by either 3 percent or 5 percent within the last year to be eligible again. That cut the budget needed for “hold harmless” from $5 million per biennium to $1 million or $2 million per biennium. That is about 1 to 1.5 percent of the DSA funding. The State Department of Education testified they had that much leeway in the calculations. They thought there would be no penalty to any of the districts. That much leeway makes me nervous, but they assured us there would be no problem in funding it.

    Senator Coffin:

    I am happy Senator Carlton raised that issue and that Senator Rawson has filled in some of the information. There is another gap in information that should be filled in. It is the key to the entire budget process. It revolves around “hold harmless.”

    On May 22, 2003, one of the most embarrassing episodes we have seen occurred in the Senate Committee on Finance meeting. Four rural members of the Assembly begged us to reverse a vote they had cast in the Assembly which would reduce the contribution from the larger counties to the small counties to help “hold harmless” stay together. We questioned them at length as to why they had voted against their own interests and why they were there to ask for our help in getting out of the hole they had dug for themselves. We had mercy on them. Senator McGinness also appeared before the committee and some of those districts were represented by Senator Rhoads who sits on the committee. We did kill the bill from the Assembly that would have saved several million dollars in the DSA. We heard the plea from those rural Assemblymen all of whom were asked repeatedly would they support the general fund for education because that money was coming out of the pot supplied by all of the counties, particularly Clark County. Without exception, they all said they would support it. They would be supporting the taxes to fund this move. We took that action. I have been mortified and regretful that I made that decision and voted to do that since all four of those gentlemen have reneged on their word and have failed to produce one vote to help support the schools.

    Senator Raggio:

    The Chair does not want the Committee of the Whole to deteriorate into something where we are going to start finding fault with one another or the other colleagues. I hoped it would be helpful for us to get together to understand the General Fund portion of what is being discussed.

    On the motion of Senator Rawson, the committee did rise and report back to the Senate.

SENATE IN SESSION

    At 12:38 p.m.

    President Hunt presiding.

    Quorum present.

MOTIONS, RESOLUTIONS AND NOTICES

    Senator Raggio moved that the Senate recess subject to the call of the Chair.

    Motion carried.

    Senate in recess at 12:40 p.m.

SENATE IN SESSION

    At 5:19 p.m.

    President Hunt presiding.

    Quorum present.

GUESTS EXTENDED PRIVILEGE OF SENATE FLOOR

    On request of Senator Rawson, the privilege of the floor of the Senate Chamber for this day was extended to Bob Yeary.

    Senator Raggio moved that the Senate adjourn until Sunday, June 29, 2003 at 1 p.m.

    Motion carried.

    Senate adjourned at 5:20 p.m.

Approved:                                                                  Lorraine T. Hunt

                                                                                   President of the Senate

Attest:    Claire J. Clift

                Secretary of the Senate