MINUTES OF THE MEETING OF JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12 ASSEMBLY COMMITTEE ON WAYS AND MEANS AND SENATE COMMITTEE ON FINANCE Sixty-eighth Session May 25, 1995 The meeting of the joint subcommittee on Human Resources/K-12 of the Assembly Committee on Ways and Means and the Senate Committee on Finance was called to order at 7:05 p.m., on Thursday, May 25, 1995, Chairman Lynn Hettrick presiding in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. ASSEMBLY COMMITTEE MEMBERS PRESENT: Mrs. Jan Evans Ms. Sandra Tiffany Mr. Dennis L. Allard Mrs. Vonne Chowning Mr. Joseph E. Dini, Jr. Mr. Lynn Hettrick, Chairman SENATE COMMITTEE MEMBERS PRESENT: Senator William J. Raggio Senator Raymond D. Rawson Senator Dean A. Rhoads Senator Bob Coffin STAFF MEMBERS PRESENT: Mark Stevens, Fiscal Analyst Gary L. Ghiggeri, Principal Deputy Fiscal Analyst Jeanne L. Botts, Program Analyst BUDGET CLOSINGS Chairman Hettrick inquired as to the pleasure of the committee regarding the presentation of the budgets. Senator Rawson requested a summary explanation of each budget. DISTRIBUTIVE SCHOOL ACCOUNT - PAGE 171 Jeanne L. Botts, Program Analyst, Legislative Counsel Bureau, explained the Distributive School Account (DSA) decision unit was summarized on the front page of the document entitled Adjustments to K-12 Funding (Exhibit C). Savings were identified on the top of page A, which included revenue changes within the formula. Revenues were reprojected to the DSA and to the formula based upon the assumptions used by the Economic Forum. The Economic Forum does not project revenues for education funding, but the same assumptions were used. The first change was an increase in assessed valuation totaling approximately $9 million for the biennium over the Governor's recommended budget. The increase in Local School Support Tax (2.25% sales tax) adds approximately $8.2 million for the biennium above what is included in the Governor's recommended budget. An increase in the out-of-state sales tax, which represents sales that cannot be attributed to a particular county, are also deposited into the DSA. As part of gathering information for the Economic Forum to reproject revenues prior to May 1, the Gaming Control Board provided information indicating the annual slot tax is expected to decrease over earlier estimates, resulting in a revenue decrease to the DSA of approximately $1.7 million. Ms. Botts noted savings were identified by deleting the expansion of the planned prison program for phase II of the Lovelock prison due to revised completion dates, which amounts to approximately $250,000 in the second year of the biennium. The budget still contains approximately $500,000 in each year of the biennium to implement the Lovelock (phase I) prison education program. The revenue changes outside the formula increase the $0.50 portion of the property tax due to projections of the statewide assessed valuation. As previously explained, the reason why more money was received from the $0.25 portion than the $0.50 portion of the property tax was the result of the Governor's budget reflecting more property tax in the $0.50 portion outside the DSA than inside the DSA, and Ms. Botts indicated she split the property tax portions 2/3-1/3. Additional savings were reflected by the retirement contribution increase of 0.53%, resulting in a decrease in salaries by one half of the amount of the increase for a savings of $5.6 million. The combined savings result in $14.1 million in FY 1995-96, $12.1 in FY 1996-97 and $26 million for the biennium. Senator Rawson inquired if there was agreement on the savings issues. Chairman Hettrick called for questions from the committee members or the public regarding the savings. There being no questions, Chairman Hettrick called for a vote on the motion. * * * * * SENATOR RAWSON MOVED TO ACCEPT THE SAVINGS FIGURES OUTLINED IN EXHIBIT C. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY BY VOICE VOTE ON BOTH THE ASSEMBLY AND SENATE SIDES. * * * * * Ms. Botts explained there were many ways to redirect the $14.1 million and $12.4 million rather than having general fund appropriation reduced, and three possible uses are delineated on Exhibit C under the category "Additions." Number 1 deals with the issue of starting salaries budgeted by the Governor. Ms. Botts stated she used the starting salaries of licensed employees equal to the average starting salaries of new hires in FY 1994-95, which information was obtained from a computer run provided by the Department of Education depicting the actual new hire salaries for categories of licensed employees. To address the concern regarding the low starting salaries of non-licensed employees, Ms. Botts suggested increasing the salaries from 65% to 75% of the average salary for the category, which adds approximately $6.6 million in the first year of the biennium and $9.4 million in the second year of the biennium for an estimated $16 million for the biennium. Pages D and E of Exhibit C are the salary and position worksheets used by Ms. Botts. Item 2 of the category "Additions" was a generic increase for inflation. There was testimony that the Governor's budget provided inflation only in a few areas across all state agencies which included postage, property insurance, utilities, food and medical, although food and medical were not listed as line items in school funding. There were also complaints regarding the increases in group health insurance costs, pupil transportation, textbooks, library books, school supplies, and instructional materials which leads to the possible suggestion of applying some of the money towards inflation. Item 3 would provide $4.7 million in the first year of the biennium that is not available in the second year of the biennium. Ms. Botts suggested using that money as one-time funding for computer software and hardware. Senator Raggio stated long discussions were held on these very issues. The committee was looking at a one-time adjustment dealing with the savings. Ordinarily, the savings would be reverted to the general fund. A recommendation made by the Governor and the Budget Division was being considered. Whatever the action is should not be interpreted as something that changes the funding formula for K-12. It is not particularly important to indicate what the savings are for, but it is an exercise in justification as to why the committee is not reducing the general fund appropriation recommended by the Governor. Realizing there are other requests being made, Senator Raggio suggested the committee adopt this rather general plan for adding the savings back on a one-time basis. If that is approved, the committee could next consider a proposal on the class-size reduction funding and any other requests should be delayed until such time as there is an understanding of how the final budget is closed. Senator Raggio remarked the committee has an obligation to construct a balanced budget, particularly in FY 1997. If a balanced budget is presented, then consideration can be given to other requests. The same method was used with higher education, and it would be appropriate with the DSA. Senator Raggio indicated he was prepared to move that the savings be added back to DSA as indicated in Exhibit C for the reasons stated and then to consider the other issues. Ms. Tiffany inquired if Senator Raggio would like to include the portion on computers in a one-shot appropriation as opposed to leaving it in the DSA. Senator Raggio suggested the DSA be approved in principle and when a final determination is made, it may be more appropriate to consider the amount recommended for computer purchases in a one-shot appropriation. He did not feel there was disagreement over the fact it would be a one-time appropriation. At some point the concerns raised as to the limitations on the funding would need to be addressed through perhaps a letter of intent. Senator Rawson pointed out the school funding bill can list the computers as a one-shot appropriation. In other words, there is a bill mechanism that completes the process. Mr. Dini stated some members of the committee may not be ready to close the DSA budget completely until all the issues were addressed, and he requested that be done. Chairman Hettrick inquired if Mr. Dini was also including class- size reduction in his request. Mr. Dini replied yes. Senator Raggio remarked he did not feel there was disagreement in regard to adding the savings back. Mr. Dini noted there was agreement on savings, but there was no agreement on how it would be distributed or what other categories might be short. He received a letter from the Storey County School District stating if the budget is approved, the school district will be starting the year with a deficit. Senator Rawson concluded if page A of Exhibit C was closed out and then class-size reduction was considered, that would leave DSA to be addressed. Chairman Hettrick noted it was his understanding from the comments made by Senator Raggio that $26 million would be added to the DSA budget over the 1995-97 biennium, and if money was available, other issues could be reviewed. Mr. Dini reiterated his request. * * * * * SENATOR RAGGIO MOVED SAVINGS IN THE AMOUNT OF $14,160,783 FOR FY 1995-96 AND $12,385,179 FOR FY 1996-97 BE ADDED TO THE DSA BUDGET IN THE CATEGORIES INDICATED IN EXHIBIT C. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY BY VOICE VOTE ON THE SENATE SIDE. MS. TIFFANY MOVED TO CONCUR WITH THE SENATE'S MOTION. MR. ALLARD SECONDED THE MOTION. THE MOTION FAILED TO RECEIVE A MAJORITY VOTE ON THE ASSEMBLY SIDE WITH MR. DINI, MRS. EVANS, AND MRS. CHOWNING VOTING NO. * * * * * Chairman Hettrick inquired if there was a counter proposal or would the committee like to consider the class-size reduction budget. Senator Rawson remarked he would like to see the consideration of class-size reduction, but if the committee was unable to close the budgets, he did not see what would be accomplished by hearing the budgets as there did not seem to be a consensus for closing the DSA. Senator Rawson asked if this was just an information session. Chairman Hettrick suggested hearing the class-size reduction budget and entertaining a motion at that point. Senator Raggio noted issue of class-size reduction has been ongoing and was now at a point where it needed to be resolved. He did not feel there was disagreement regarding the funding of the existing class-size reduction program in grades one and two. The issue remaining related to the request in the Executive Budget for adding third grade class-size reduction at a cost of approximately $21 million, which was added at the last moment in the Executive Budget and was a principal reason why there is a deficit in FY 1997 in the Executive Budget. It was not necessary to hold lengthy discussions regarding that issue since it had been discussed since the beginning of the session. Senator Raggio presumed all the committee members were aware of the Governor's great concern in regard to extending the program to third grade, but the committee had the fiscal responsibility of leaving session with a balanced budget as required under the Constitution of Nevada. He proposed if agreement could be achieved regarding the class-size reduction aspect of the K-12 budget and a balanced budget was achieved, consideration may then be given to additional requests for the K-12 budget. Senator Raggio pointed out the information given to the committee by fiscal staff (Exhibit D) represented the cost of various options dealing with class-size reduction. A problem with the class-size reduction proposal is that when you carry the $21 million for third grade over into the next biennium it becomes a $45 million commitment and would almost certainly require a tax increase. In an attempt to accomplish as much as possible in the commitment to reduce class sizes and to be fiscally responsible, Senator Raggio proposed to Governor Miller that funding be provided to at-risk third grade classes and at- risk kindergarten in FY 1997 at a cost of approximately $7.8 million, about a third of the cost in the Executive Budget of $21 million. That responds to the concept that the at-risk students are the ones who would benefit initially, and makes a firm commitment to third grade class-size reduction and the extension of kindergarten at-risk classes. It does not go as far as the Governor would like, but $7.8 million does amount to a commitment in the next biennium for a minimum of approximately $15 million. If revenue is available in the next session, it would be easy to attain full class-size reduction in kindergarten and third grade without a tax increase. The commitment as put forth in the Executive Budget in the amount of approximately $50 million would require a cut in the budget or a tax increase to continue the program. Senator Raggio proposed flexibility in the funding to allow school districts to continue class-size reduction in grades one and two and a ratio of 16:1 in at-risk kindergarten and at-risk third grade. He proposed that the school districts be allowed the flexibility to submit an alternative plan for approval by the Department of Education to reduce class-size in other areas to fit their needs. The only limitation would be that the school district would need to maintain the pupil-teacher ratio across kindergarten through third grade that exists within their district as a result of the proposed funding. Senator Raggio said the aforementioned proposal was responsible in that it achieved a balanced budget and took into consideration the educators, students, taxpayers, and established a firm commitment for both the legislature and the Executive Branch of government. Ms. Tiffany asked if Senator Raggio was giving school districts flexibility in the first and second grades to change the ratios, and she asked how it would impact team teaching. Senator Raggio responded that would be up to each district. Several districts testified they wanted some flexibility to make adjustments in other grades because in some instances a ratio of 16:1 was not necessary. Ms. Tiffany inquired if a rural area could change the ratio to 16:1 for sixth grade. Senator Raggio stated no one would dictate that and it would be within the school district itself. Chairman Hettrick asked if funding would be provided to kindergarten through third grade only with a ratio held within those grades and could not be used for sixth grade. Senator Raggio responded yes. Mr. Dini expressed agreement with a number of points brought up by Senator Raggio regarding a balanced budget and flexibility for the schools. A problem exists with 16:1 for at-risk only in third grade. He asked what would happen to middle income Nevadans. The ratio of 19:1 would provide a transition to regular classes in the fourth grade. Senator Rawson commented it was his understanding the proposal of $7 million would deal with all of the at-risk classes, but the flexibility plan would allow the funding to be used any way the school district wished. Mr. Dini pointed out the plan of 16:1 would increase the size of other classes in the third grade and would digress from reaching the larger population. Chairman Hettrick stated it was his understanding of the bill draft that school districts would not be forced to hold at 16:1 in any class and could go to 19:1 in all classes as long as the overall ratio was maintained. Mrs. Chowning expressed agreement with the balanced budget and flexibility proposals. She commented each school in her district would benefit because nearly each student in her district was at risk, but it was not fair to other districts. Chairman Hettrick reminded the committee members that if Senator Raggio's proposal was adopted, $26 million would be going back to all the school districts and would not be limited to at-risk students. Ms. Tiffany expressed appreciation for Senator Raggio's proposal and stated a compromise should be reached on class-size reduction. Senator Raggio stressed if the money was available the committee members would probably be agreeable to adding more money to the program. The suggestion of a 19:1 class-size reduction in third grade is a $12.6 million cost, which equates to a commitment of approximately $26 million at the next legislative session without any guarantee the funding would be available at that time. It would be irresponsible to reach the goal of a balanced budget and then add $12.6 million. The compromise proposal is the limit the budget can afford and still perform in a constitutional manner in finalizing the budget. Senator Raggio noted he was prepared to make a motion. Senator Coffin thanked Senator Raggio for moving the DSA subject off dead center and stated he hoped the committee was not being forced to an all or nothing motion. The issue was whether or not to choose at-risk. Senator Coffin supported the comments made by Mr. Dini and supported the continued discussion between the Governor and Senator Raggio. Senator Raggio remarked it would be regretful if the issues were divided on a partisan basis. The proposal was not proposed on a partisan basis, otherwise he would not have gone first to the Governor and offered to endorse it jointly. The point in the session had been reached where decisions needed to be made. The proposal was not an offer to compromise further but was the ultimate limit that can be fiscally endorsed in light of other priorities. The proposal addresses and makes a firm commitment to class-size reduction in kindergarten and third grade and offers an opportunity if funds are available in the next biennium to continue and enhance the program. Chairman Hettrick stated he did not support class-size reduction. The evidence did not justify the additional expense at this time. If it was shown to be a positive step, he would support it. Chairman Hettrick expressed agreement with Senator Raggio regarding the problem in the coming biennium in terms of balancing the budget. He was prepared to support the proposed compromise but was not prepared to go beyond the compromise. Senator Coffin inquired if other priorities were in the education budget. Mrs. Evans stated approximately $21 million had been set aside in the Governor's proposed budget for third grade class-size reduction. Alternative suggestions included doing at-risk third grade and expanding the number of at-risk kindergartens. The calculations for that suggestion were a little over $7 million because the other at-risk kindergartens were overlooked in the budget. She inquired if the idea was that the remaining dollars which were set aside would not flow back to education but would be a device to balance the budget. The DSA and class-size reduction were linked. She expressed concern that the proposal ignores a list of problems regarding, for example, the calculation of the starting salaries being low, group health insurance, special education units and their costs, and the calculation of inflation being based on group insurance. Mrs. Evans distributed to the committee members a computer printout addressing inflation in the DSA (Exhibit E) and pointed out the operating and equipment budgets had been overlooked. The record will show that the increases in the budget are only based on a few items. The handout reflects dozens of expenses in school budgets affected by inflation, such as heat, electricity, water, garbage, postage, and the big item of supplies which was totally overlooked. It has been pointed out in other budgets there is a 50% inflation factor regarding such things as paper. There are underlying basic, fundamental needs in the education budget which are being overlooked. Mrs. Evans requested consideration from the committee regarding the basic needs of schools. Senator Raggio noted many suggestions could be made for the method of funding education. The inflation factor built into the budget is the same one utilized by state agencies and the DSA. The suggestions can be argued, but they are tantamount to changing the basic funding formula under which the state operates. A list of items is not used for inflation. A proposal is made to change the formula by adding an additional $26 million to address the needs of schools. Mrs. Evans noted there had been budget cuts in 1992 from which many counties had not yet recovered. Secretaries in Washoe County were paid based on a seven-hour day but were working eight hours per day. The budget was built on FY 1993-94 actual costs, not on FY 1994-95 estimated costs and attention needs to be given to those conditions. Senator Raggio noted he voted against the budget in 1991 and told everyone there would not be sufficient revenue to cover the budget. As a result, everybody's budget was cut, but that did not help solve today's problems regarding the salary increases for which there is no funding, a cost-of-living increase, or negotiated raises for teachers. The legislature cannot leave with a budget that is not balanced as has happened in Washington, D.C. He stated his position was to get to a balanced budget position, and then budgets can be revisited if there are funds available. Progress cannot be made in the DSA budget until the class-size reduction enhancement has been resolved. Other suggestions cannot be accomplished either as a practical matter, as a fiscal matter, or as a political matter. Mr. Dini suggested discussing with Mr. Comeaux the deficit in the second year. John P. Comeaux, Director, Department of Administration, explained the department recognized in the second year of the biennium there is an imbalance between the revenues and expenditures, and the proposed expenditures exceed the revenues that the Economic Forum forecast. In the first year of the biennium the situation is reversed. The department's position is that the Executive Budget is balanced for the biennium. Regarding the issue of what the second year imbalance means for the first year of the following biennium, it is the department's position that the Nevada economy is as strong now as it has ever been. The average revenue growth for the last four years has been approximately 7%. Mr. Comeaux stated it was his belief with that type of economic activity, there is nothing on the horizon to indicate any turnaround, the imbalance in the second year of the biennium will be closed in the first year of the next biennium, and, in effect, the state will grow out of the imbalance. Mr. Dini inquired would there be an imbalance in FY 1998-99 if the proposal of the Governor for third grade was accepted. Mr. Comeaux stated it was his opinion the state would grow out of the imbalance. Chairman Hettrick asked if the state was bound by the Economic Forum law to use the Economic Forum numbers and other projections could not be made that the state is going to grow out of the imbalance. Mr. Comeaux stated for the 1995-97 biennium there is a balanced budget using the projections of the Economic Forum and for the biennium the revenues exceed the proposed expenditures. Senator Coffin inquired if the situation of being in balance and out of balance was different from past years. Mr. Comeaux replied on occasion budgets were approved where an individual year's revenue was less than approved expenditures. Approximately three or four times during the prior ten years the approved budget was out of balance in the second year of the biennium. Ms. Tiffany used an analogy of buying a house with a mortgage. In 1986 the mortgage was affordable, but in 1987 savings from 1986 would be required to pay the mortgage; and in 1988 you need a salary increase or the house would have to be sold, or you would have to get another job to pay for the mortgage. The issue regarding the elimination of the hospital provider tax has not been addressed. There is a $53 million shortfall in the second year of the biennium plus a $22 million shortfall from the hospital provider tax. Mr. Comeaux felt with the revised estimates of the Economic Forum and the revisions from the Governor to the Executive Budget, the imbalance between revenue and expenditures in the second year of the biennium is down to approximately $22.5 million. The hospital provider tax referred to by Ms. Tiffany is basically a carry-forward from FY 1995 into the next biennium and is approximately $23 million in the second year of the biennium. The total of approximately $45 million amounts to approximately 3% of the total recommended expenditures. Mr. Comeaux predicted the revenues would grow at the historical rates. For FY 1995 the budget approved by the legislature was approximately $5 million or $6 million out of balance, and it was balanced to that degree with revenue from other sources and from the hospital provider tax which was projected to be eliminated. Instead of ending with a $5 million problem, the economy boomed and the state ended up with an estimated $390 million ending fund balance for FY 1995. Mr. Comeaux was not suggesting that would be repeated in the next biennium because revenue estimates were not as conservative as in the past. The Economic Forum's revenue estimates represent an increase of approximately 5.2% to 5.3% per year for the next two years. The state's average growth over the prior four years has been approximately 7% per year. Senator Rawson shared with the committee that during the 1991 session he parted company with most of the delegation and bet the economy was going to be strong. He fought hard for some programs which were much like the ones being discussed at the present hearing. As the session ended, the economy took a downturn, and he saw every program he fought for destroyed. The money was pulled out of each program without the same consideration as when the money was put in. A bitter lesson was learned. Some programs in the state have still not recovered from that period. In spite of the fact there have been good years, too much has to be restored. The balance sheet is thought of in terms of revenues and expenditures. Much has been discussed about how strong the economy is, but Senator Rawson stated he has been involved in Human Resources budgets which have turned out to be kids versus kids. Nobody knows what is going to happen in AFDC and Medicaid or where the funding will be derived for the blind and the disabled. He stated he expects the economy to be good and Congress to do the right thing. Everyone who works for Human Resources is terrified that block grants will be what is available to build programs. As a growing state, Nevada will be hit hard and programs will have to be cut back, and every agency is developing contingency plans. The process has been addressed for provider tax, disproportionate share, intergovernmental transfers, and every one of those can be disallowed and maybe even collected upon. The world is not that stable. One terrorism incident closed Oklahoma City. If the economy is as strong as projected and there are no negatives, the one-shot money and the program money will be available to build the programs everyone wants. If money is not there, programs will not be eliminated. Senator Rawson stated there is no stronger proponent of class-size reduction in the legislature than he, and he worked tireless hours to accomplish it. He requested the program be accomplished in a staged, logical, responsible way that does not have to be interrupted or cut back in the process. He stressed prudence in developing the budget. Senator Raggio reiterated the comments of Senator Rawson. He stated the budget cannot be measured by looking at a two-year period. Whether it is an imbalance or deficit, the problem needed to be solved before anything is added to the budget. Senator Raggio stated he did not expect Mr. Comeaux to take a side opposite the Governor. This concept was added at the last minute because revenues were projected to grow at the historical rate. But the law requires the state to use the projections of the Economic Forum. The Governor also recommended the prepayment of the insurance premium as additional revenue. Senator Raggio expressed his support for class-size reduction, but not at the expense of fiscal disaster through fiscal irresponsibility. Senator Rhoads inquired if Senator Raggio still had a motion on the table. Senator Raggio stated he would make the motion. Senator Rhoads remarked he would make the second. Mr. Allard commented it would not be prudent to spend money which is not available on programs that have not been demonstrated to be fully effective. The compromise set forth by Senator Raggio is extremely generous in light of those concerns, and Mr. Allard expressed support for the compromise. Mr. Comeaux pointed out the major difference between the present and 1991 is the state has the fund to stabilize the operation of state government in place. If the governor's recommendation to fully fund the program approved by the legislature, the state will have $100 million in that fund. In addition, with the latest estimates of the Economic Forum and the revisions the Governor recommended to the Executive Budget as submitted, the state would end up with an ending fund balance in 1997 of approximately $140 million. The requirement for an ending fund balance is 5%, which would be approximately $67 million. The money in the fund to stabilize the operation of state government and the additional ending fund balance would be available to transition the state in another recession or if the federal government did something to require the state to handle the programs differently. Senator Rawson expressed appreciation for the Governor working with the stabilization bill he introduced, but he stated he would like to see the money on the table. * * * * * SENATOR RAGGIO MOVED TO FUND CLASS-SIZE REDUCTION WITH THE MONEY IN THE EXECUTIVE BUDGET FOR FIRST AND SECOND GRADES, TO ADD $7.7 MILLION TO COVER THE COST OF AT-RISK KINDERGARTEN AND AT-RISK THIRD GRADE, AND TO ALLOW SCHOOL DISTRICTS THE FLEXIBILITY OF SUBMITTING AN ALTERNATIVE PLAN FOR CLASS-SIZE REDUCTION TO THE DEPARTMENT OF EDUCATION. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED BY VOICE VOTE ON THE SENATE SIDE WITH SENATOR COFFIN VOTING NO. MR. ALLARD MOVED TO CONCUR WITH THE SENATE'S MOTION. MS. TIFFANY SECONDED THE MOTION. THE MOTION FAILED TO RECEIVE A MAJORITY VOTE ON THE ASSEMBLY SIDE WITH MR. DINI, MRS. EVANS, AND MRS. CHOWNING VOTING NO. * * * * * John F. McKenna, Jr., Vice President, Carson City School District Board of Trustees, presented a handout to the committee which is attached as Exhibit F. There being no further business, Chairman Hettrick adjourned the hearing at 8:50 p.m. RESPECTFULLY SUBMITTED: _________________________________ ____ Jonnie Sue Hansen, Committee Secretary Joint Subcommittee on Human Resources/K-12 Assembly Committee on Ways and Means Senate Committee on Finance May 25, 1995 Page