MINUTES OF THE meeting
of the
ASSEMBLY Committee on Ways and Means
Seventy-Second Session
April 24, 2003
The Committee on Ways and Meanswas called to order at 4:02 p.m., on Thursday, April 24, 2003. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry Jr., Chairman
Ms. Chris Giunchigliani, Vice Chairwoman
Mr. Walter Andonov
Mr. Bob Beers
Mrs. Vonne Chowning
Mrs. Dawn Gibbons
Mr. David Goldwater
Mr. Josh Griffin
Mr. Lynn Hettrick
Ms. Sheila Leslie
Mr. John Marvel
Ms. Kathy McClain
Mr. David Parks
Mr. Richard Perkins
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Assemblywoman Barbara E. Buckley, District No. 8
Assemblyman John C. Carpenter, District No. 33
STAFF MEMBERS PRESENT:
Mark Stevens, Assembly Fiscal Analyst
Catherine Caldwell, Committee Secretary
Linda Smith, Committee Secretary
Chairman Arberry called the meeting to order at 3:20 p.m. and opened hearings on Assembly Bill 488.
Assembly Bill 488 (1st Reprint): Makes various changes concerning ditches. (BDR 48-1293)
Assemblyman John Carpenter, District No. 33, introduced Assembly Bill 488, commonly known as the “ditch bill,” and said the State Engineer had removed the fiscal note on A.B. 488 and now supported the bill. Mr. Carpenter testified that the bill made it more difficult for individuals to evade various state laws that prohibited destroying or covering ditches. Mr. Carpenter said A.B. 488 required the State Engineer to investigate complaints involving ditches and required that when maps for subdivided land were filed that the map included the location of ditches so that affected individuals would be aware of any potential consequences. He said the bill was important to preclude covering or destroying ditches, and to prevent the misunderstandings that can arise from those situations. He asked for questions from the Subcommittee.
Chairman Arberry asked for clarification regarding the removal of the fiscal note.
Hugh Ricci, P.E., State Engineer, Division of Water Resources, introduced himself for the record. He said that A.B. 488 was amended and reprinted to remove the fiscal note. He explained that originally A.B. 488 required an official of the State Engineer’s Office to attempt to resolve a complaint or take it to court. He said the State Engineer’s Office did not deem those activities its responsibility and amended the bill to read as it now stood. As amended, the State Engineer would investigate a complaint of an alleged violation, prepare a report concerning the investigation, and make the report available to the person or local governmental entity that requested the investigation. The bill left the responsibility to the complaining party to process the complaint through the appropriate law enforcement agency for remedy.
Assemblywoman Giunchigliani noted that the original bill, page 2, subsection 2, stated that in any complaint investigated pursuant to subsection 1, the State Engineer should attempt to facilitate a resolution and, if unsuccessful, he was to refer the complaint to the appropriate district attorney. She asked if that language created the need for two additional engineers.
Mr. Ricci explained that the original language required the State Engineer to follow the complaint through the court system. The language put the State Engineer rather than the aggrieved party in the role of “the pursuer” of the complaint. The additional responsibility created the need for additional staff because the process could be lengthy and the volume and frequency of complaints was unclear.
Ms. Giunchigliani said that in the amended Section 1(a) language was added regarding the boundaries of an adjudicated stream system, and asked whether that narrowed or broadened the language.
Mr. Ricci said it narrowed the language. In some instances there was a provision where the users of the stream system paid for those particular ditches and for the administration of those particular systems. If the bill were amended it would still have had the fiscal notice associated with it.
Ms. Giunchigliani said it was important that the Committee was clear regarding what language would be retained and what would be eliminated. She continued to subsection 2, page 2, which stated that the “State Engineer shall prepare a report concerning the investigation, including, without limitation, the condition of the ditch.” She asked Mr. Ricci if the State Engineer was currently responsible to review conditions of ditches.
Mr. Ricci confirmed that was an existing responsibility.
Ms. Giunchigliani pursued her line of inquiry stating that the State Engineer then made the report available to the person or local governmental entity that requested the information. She requested Mr. Ricci explain the process.
Mr. Carpenter said the report would most likely be made available to the county commissioner.
Ms. Giunchigliani said the State Engineer would make the report available to the county commissioner, and if either the person who filed the complaint or the governmental entity wished it, they could use the report to proceed to the courts and the State Engineer would no longer have a role in the matter.
Mr. Ricci confirmed Ms. Giunchigliani’s statement that the State Engineer would be finished with the matter.
Chairman Arberry asked if there was anyone who wished to speak for or in opposition to Assembly Bill 488.
There was no further testimony and Chairman Arberry declared the hearing on Assembly Bill 488 closed.
Chairman Arberry opened the hearing on Assembly Bill 504.
Assembly Bill 504 (1st Reprint): Requires Department of Human Resources to apply to Federal Government to establish program to extend coverage for prescription drugs and pharmaceutical services to certain persons under certain circumstances. (BDR 38-1207)
Michael Willden, Director, Department of Human Resources, introduced himself for the record and said he would present information only on Assembly Bill 504 and testified that A.B. 504 expanded the Senior Rx Program for qualified seniors and disabled individuals. He said the bill would permit the Department of Human Resources (DHR) to apply for a Pharmacy Plus Medicaid waiver and would impose an 8 percent limitation for administrative costs. Mr. Willden said that the Department of Human Resources and the Governor’s Office were concerned with two areas in A.B. 504. He said currently there was no fiscal note to which to respond.
Mr. Willden stated that the first area of concern for the DHR and the Governor’s Office was an assurance that the disability waiver would not degrade the Senior Rx Program. He noted that the Senior Rx budget that had just closed expanded the Senior Rx enrollees from 7,500 to over 12,000 and any new legislation should not decrease the number of seniors served in order to add coverage for a new group.
Mr. Willden said the second area of concern had to do with the 8 percent administrative cap. He said that as the DHR was applying for a Pharmacy Plus waiver for the Senior Rx population, and as they incorporated the disabled community, they did not have the experience needed in the waiver application process to know if they could administer the program with an 8 percent administrative cap. He said, from discussions with the federal government and other states that had received approval for those types of waivers, the DHR did not anticipate being able to implement a waiver any sooner than January 2004.
Chairman Arberry asked for questions from the Committee.
Ms. Giunchigliani asked Mr. Willden to repeat the start date.
Mr. Willden said they could not implement the waiver any earlier than January 2004. In discussions with South Carolina, one of the lead states in exploring the Pharmacy Plus waiver application process, they were told to expect a two‑year process. Mr. Willden noted that there was a simplified application process available to states, and the criteria for receiving a waiver was to demonstrate to the Center for Medicaid Services that the waiver would be cost neutral over a five-year period. The states had to show that its Pharmacy Plus Program waiver would provide services to a specified population and, in so doing, would divert individuals from going on Medicaid or from accruing higher-end institutional costs such as hospitalization.
Ms. Giunchigliani said the funding would come from the Fund for Healthy Nevada.
Mr. Willden said that any of the waivers they were discussing would use Tobacco Settlement funds matched with federal dollars.
Ms. Giunchigliani asked how that would affect the Senior Rx Program budget.
Mr. Willden said that a waiver could allow the DHR to match with federal dollars a portion of the 100 percent Tobacco Settlement funded Senior Rx population. The federal waiver only allowed coverage for people whose income was up to 200 percent of poverty. He said Nevada had a higher income limit than the federal limit for the Senior Rx Program. Senior Rx individuals who qualified under the federal income test would be used in the application for a waiver and those federal funds would be used as a match in the program. The savings to the Tobacco Settlement funds could then be used to expand other programs.
Ms. Giunchigliani said she did not see January 4 mentioned in the bill. She asked if the Department needed an amendment to provide the necessary time to produce the waiver. Mr. Willden said there was no date in the bill but they noted the date through their testimony.
Mr. Willden said their primary purpose for his testimony was to cover their concerns that a waiver should not impact the Senior Rx Program. Ms. Giunchigliani said their intent was to evaluate what impact the bill would have on any of the budgets they were working on. Mr. Willden added that they could not determine what would be a reasonable administrative cost.
Assemblywoman Barbara Buckley sponsored Assembly Bill 504, and said the Committee understood that some senior populations needed but could not afford prescription drugs and that the Committee understood the purpose of the Senior Rx Program. She testified that the new federal Pharmacy Plus Section 1115 waiver program provided an excellent opportunity for the state to double its human resources money. She said the bill presented a “win-win” situation. Ms. Buckley added that they had inserted some accountability measures into the bill to require lower administrative costs. She said they added an administrative costs cap to lower the 29 percent that currently was spent to administer the Senior Rx Program. By lowering the administrative costs funds were released that would be used to serve more individuals. She said language had been added that was permissive and would extend pharmacy coverage to disabled individuals. Ms. Buckley indicated the disabled population was in need of prescription drug assistance as much as seniors. The intent of the bill was to assist Medicare beneficiaries who had no prescription drug coverage. Ms. Buckley said there had been some concern about the 8 percent administrative cap. She said she would defer to the wisdom of the Committee to achieve a proper balance and added that it would be an incentive to get the administrative costs down to provide more individuals with prescription drugs. She asked for questions.
Chairman Arberry asked if there was anyone who wished to speak for or in opposition to Assembly Bill 504.
Chairman Arberry said there was a question as to whether or not an 8 percent cap would be manageable. Mr. Willden said he could not confirm that 8 percent would or would not be manageable because they had not yet done an analysis. Chairman Arberry asked Mr. Willden when they expected to have some figures.
Mr. Willden said they needed to have the federal agency assist them with the negotiations as to what was an acceptable waiver before they could provide any figures. He said they would have significantly lower administrative costs in a state-run program as opposed to using an insured product that required a reinsurance cost, profit, and premium insurance taxes that were currently part of the Senior Rx Program. He could not affirm that they could bring the administrative costs down to 8 percent.
Chairman Arberry asked if he had any idea when they might know. Mr. Willden said he could provide some estimates but warned that until the federal agency accepted the waiver application there was no sure way to determine whether the expanded program could be implemented, or if the program could be administered within the administrative cap.
Paul Gowins, Centers for Independent Living, and the Disability Forum, introduced himself to the Committee and encouraged the Committee to move the bill forward. He testified that he had attended the hearing that introduced that bill but now had some concerns with the amendments. Mr. Gowins said he would voice those concerns but did not want the Committee to construe those concerns as strong enough to prevent action. He said he believed A.B. 504 was a good bill and should be moved forward. He was discomforted when he read the language “shall” applied to the Seniors, and “may” applied to individuals with disabilities: he said it implied that they shall apply for the waiver for the seniors and they may do it for the folks with disabilities. Mr. Gowins said when the bill was originally introduced it was for folks who were covered by Medicare and who had prescription needs. He said the intent was a great concern because the disabled community had been working for two sessions to get some prescription coverage for folks with disabilities on fixed incomes, folks who were going to be on fixed incomes for most of their lives if they were not fortunate enough to go back to work. Mr. Gowins said when he read the amended language in the bill he saw the word “may” and thought, “so maybe they get to it and maybe they won’t.” He said when the language was “shall” then the budgetary issue had been defined and had to be dealt with. He said he was asking the Committee to take a look at that and consider the consequences of the current language. He said in the worst-case scenario if they could not change the language for the disabled community, he asked them to insert some reporting mechanism for the Interim Finance Committee so that when session was out the disabled community would know that progress was being made on the issue.
Mr. Gowins said he had been through two sessions. In the first session the Governor said, “Oh, yes, it is going to be there,” but it did not get in there. The issue was revisited in the last session, but the American Association of Retired Persons (AARP) had concerns that the disabled population would hurt the seniors. He said when “you are disabled and without drugs for 20 years of your life” the disabled could identify with the seniors. He said the disabled understood the issues but they did not believe they should be bifurcated just because they had not reached the age of 65. He said those were the concerns he hoped the Subcommittee would consider as it moved through the approval process, and they hoped the Subcommittee would ensure that they were addressed or insert some mechanism to identify the issue appropriately. Mr. Gowins noted that the drug companies were very capable of providing the Subcommittee with the relevant costs for the disabled community. He encouraged them to move forward with A.B. 504 and to consider his comments.
Bonnie Parnell, representing the Nevada Health Care Reform Project and the Nevada Women’s Lobby, introduced herself and said the issue of pharmaceutical coverage for the disabled community had been discussed in prior sessions and also in the interim Committee on Health Care, of which she was a member. She said at that time they were all led to believe that something was going to be done for the disabled community. She agreed that they wanted to revisit the “shall” language for the disabled. She said that providing drugs for the disabled had been of paramount importance for the Nevada Health Care Reform Project. She added that they would all like to see the cap lifted on the low-income seniors as well. She concluded and said that both organizations she represented supported Assembly Bill 504.
Ernie Nielsen, Washoe County Senior Law Project, introduced himself, and said his group strongly supported Assembly Bill 504 and believed it would be a substantial improvement in providing pharmaceutical benefits to seniors.
Chairman Arberry asked if there was anyone else who would like to speak for or in opposition to Assembly Bill 504. There was no further testimony and Chairman Arberry declared the hearing on Assembly Bill 504 closed.
Chairman Arberry opened hearing on Assembly Bill 515.
Assembly Bill 515 (1st Reprint): Makes various changes to provisions governing property tax assistance for senior citizens. (BDR 38-499)
Carol Sala, Administrator, Aging Services Division, Department of Human Resources, introduced herself and noted that she was accompanied by Carla Watson, Administrative Services Officer, and Earleen Heinz, Program Officer for the Senior Tax Program. She said they were there to support Assembly Bill 515. The bill would simplify the existing income range schedule used for the Senior Citizens Property Tax Assistance program and provide 100 percent rebate for taxes paid, up to the $500 cap, to those eligible claimants whose income was at or below the federal poverty level for family units of one or two. There were other provisions of the bill that would expand existing eligibility limitations or impose new eligibility limitations. She noted that the Senior Citizens Property Tax Assistance program was transferred from the Department of Taxation to the Aging Services Division in October 2001. She said that after the initial transition period the Division identified some components of the program that could be simplified and others that could be enhanced.
Carla Watson, Administrative Services Officer, Aging Services Division, introduced herself for the record and noted a handout (Exhibit C) that covered the ten primary provisions recommended in the bill. She noted a summary of the provisions on page 1 and said their testimony would cover each provision in order. She said the first provision simplified the existing income range schedule to provide for more equitable distribution to eligible claimants. Simplification of the schedule prevented minor income differences from causing significant differences in rebates. She testified that the income range schedule would change from the existing five set points to a graduated or sliding scale. The graduated ranges would fall between 100 percent and 10 percent as opposed to the existing 5 set points of 90, 80, 50, 25, and 10 percent, and would result in some eligible claimants receiving a larger rebate while others would receive a smaller rebate. The graduated ranges were structured to provide 100 percent rebates of taxes paid, up to the $500 cap, to those eligible claimants whose incomes were at or below the federal poverty levels for family units of one, for single claimants, or two if spouses filed jointly (Exhibit D).
Ms. Watson said that Exhibit C contained multiple schedules pertaining to the proposed changes. The first schedule on page 2 of Exhibit C identified the existing schedule that operated within the 5 set points and the proposed graduated ranges that fell between 100 percent and 50 percent. The second schedule on page 3 of Exhibit C identified the fiscal impact of the proposed changes that, if accepted, would not be implemented until fiscal year 2005 for income year 2003. The estimated fiscal impact for fiscal year 2005 was $189,900. Ms. Watson emphasized to the Committee, due to the three new eligibility limitations included in A.B. 515, the net fiscal impact was estimated at zero. The three new eligibility limitations were listed as items 3, 4, and 5 on page 1 of Exhibit C, and would be discussed in the presentation.
Ms. Watson said that the schedule on page 4 of Exhibit C provided a comparison of case scenarios of clients who received rebates for FY2002 and FY2003, and the impact on the rebate amounts. The schedule on page 5 of Exhibit C provided the global impact of the new schedule when compared to the existing schedule for clients who received rebates in FY2002 and FY2003.
Ms. Watson said the second provision of A.B. 515 would hold harmless those eligible claimants, whose income was at or below the federal poverty level for family units of one, filing single, or two, if filing jointly. If there were insufficient funds available to provide 100 percent of calculated rebates to all eligible claimants, remaining rebates would be reduced by the percentage necessary to remain within the legislatively approved budget.
Ms. Watson said that currently if a supplemental appropriation was needed to provide rebates to all eligible claimants, and the Interim Finance Committee (IFC) did not approve a supplemental appropriation, all the rebates were reduced by the percentage necessary to remain within the legislatively approved budget. By holding harmless those eligible claimants, whose income was at or below the federal poverty level for family units of one or two, would allow those most in need of the refund to receive the entire allowable rebate. Eligible claimants whose income was greater than the poverty levels would absorb the reduction in the rebates by the percentage necessary to remain within the legislatively approved budget. If the second provision was accepted the Division requested language be included to allow refunds to be processed prior to the Interim Finance Committee (IFC) meeting date for those claimants whose income fell at or below the federal poverty level for family units of one or two. The remaining rebates would be held until 30 business days following the IFC meeting date.
Ms. Watson testified that the third provision would limit the assessed value of the applicant’s principal residence to $70,000. Currently there was no limitation on the assessed value of the applicant’s principal residence. If the assessed value were 35 percent of the cash value, a home assessed at $70,000 would have a cash value of approximately $200,000. By limiting the assessed value of the applicant’s principal residence to $70,000, certain claimants, who would otherwise be eligible, would no longer be eligible to receive a rebate. The estimated fiscal impact of provision 3 was a reduction of $33,321 in rebates in FY2005 as shown on page 6 of Exhibit C.
Ms. Watson testified that provision four of A.B. 515 would limit the value of the applicant’s liquid assets to $100,000. Currently there was no limitation on the value of the applicant’s liquid assets. Liquid assets were defined as assets that could be readily disposed of, usually within four to six months, without large penalties. Ms. Watson gave examples such as savings accounts, mutual funds, stocks, and bonds. She said there could be instances where claimants had thousands of dollars invested in the stock market and due to losses could be eligible for a rebate if their income did not exceed the maximum amount. By limiting the value of the applicant’s liquid assets to $100,000, certain claimants, who would otherwise be eligible, would no longer be eligible to receive a rebate. Although the Division did not currently require or retain an applicant’s total liquid assets in their database, they were able to estimate the fiscal impact of provision four by dividing interest and dividend income by 1.75 percent. Therefore, the estimated fiscal impact was a reduction of $469,159 in rebates in FY2005. She said that was shown on page 7 of Exhibit C. She emphasized to the Committee that the estimate was based on the interest and income dividend, using 1.75 percent.
Ms. Watson testified that provision five disallowed claims for applicants who owned real property in other states that exceeded the assessed limitations in Nevada. Currently, in Nevada, property, other than the home, may not have an assessed value of more than $30,000. However, applicants may own real property in other states that exceeded the assessed limitation in Nevada. They were unable to estimate the fiscal impact for provision five because currently they had no requirement that applicants provide such data.
Ms. Watson explained that the consumer price index (CPI) was applied to the maximum income each year to establish the new maximum income level. She said that provision number six would change the CPI adjustment month from December to November. CPI figures for December were not available before January 16 and currently there was not sufficient time to print the new applications and instructions reflecting the income maximums.
Ms. Watson said that provision number 7 would extend the filing period from April 15 to April 30. Many claimants waited until the April 15 deadline to file their federal income tax returns. The Division had received complaints indicating there was not ample time to get copies of tax returns to submit with the application to meet the April 15 deadline.
Ms. Watson said that provision number eight added clean up language to reference an exception that allowed the administrator to extend the time to file a claim in the event of a hardship.
Ms. Watson said that provision number nine added language to allow the administrator to appoint a designee to administer the claimant grievance process.
Ms. Watson said that provision number ten added language to allow the administrator to appoint a designee to certify claims against the account.
Ms. Giunchigliani noted that current state regulations held that the value of a home assessed at $70,000 was $210,000. She asked why the state should be paying someone’s property tax on a $210,000 home.
Earleen Heinz, Program Officer for the Senior Tax Program, testified that the Aging Services Division currently paid on a home valued at $210,000 if the individual met the income criteria, regardless of the value of the home.
Ms. Giunchigliani said the payment amount was the result of the current formula. She said that did not explain why the Division paid property taxes on a $210,000 home. Ms. Heinz said no cap had been placed on the value of the home of an eligible individual.
Ms. Giunchigliani noted that the proposed bill stated that a senior could have an annual income of no more than $24,016, a home worth $210,000, up to $100,000 in liquid assets, real property outside of Nevada, and would qualify for up to a $500 property tax rebate.
Ms. Heinz said that was correct, that there was a cap. Ms. Giunchigliani said the rebate could be less than $500. Ms. Heinz confirmed the rebate could be less than the $500.
Ms. Giunchigliani noted that the Division wanted to simplify the formula. The chart on page 7 of Exhibit C showed there had been a wide range of possibilities to qualify for a rebate. There were some that might receive $100, some $300, and some receiving $500. Ms. Heinz said that was correct. Ms. Giunchigliani said the chart was based on the old formula where approximate liquid assets could be $900,000. Ms. Watson said that was correct. Ms. Giunchigliani said at that time there was no limit to the liquid assets a client could have and that the last line on the chart showed $100,000 in liquid assets. Ms. Giunchigliani asked for clarification of “Clients Within Range.”
Ms. Watson explained the term. She said a figure in that column represented the number of clients within an income range over one level of liquid assets, for example, $100,000, but under the next level, $200,000. As shown on the chart, the number of clients that fell between those two levels was 465. Therefore, from the chart, if the Committee chose to use the $100,000 limitation, the cumulative number of clients that would no longer be eligible to participate would be 1,490. Using the formula of taking the dividend in interest income at 1.75 percent, they projected a savings of approximately $469,159. Ms. Watson said those clients would no longer be eligible because their liquid assets were over $100,000.
Ms. Giunchigliani asked if they would serve more individuals whose liquid assets were less than $100,000. She asked if they would assist more seniors with low income under that plan, or were they going to serve more seniors who made more money but would not qualify.
Ms. Watson said the latter statement was correct. She said the limitations were new to the program and this session was the first that the Aging Services Division had this program. They wanted to make sure that Committee members could evaluate those limitations based on the information that they could provide.
Ms. Giunchigliani said the Division might realize more low-income seniors.
Ms. Watson said that was correct. She said the remedy they proposed for the low-income clients was to hold them harmless if their income fell at or below the federal poverty level for single filers or for joint filers. At that point the Division would provide to them 100 percent of their property tax rebate up to the $500 cap whereas currently they could receive no more than 90 percent.
Ms. Giunchigliani asked how a client’s status might change if their liquid assets increased to, for example, $900,000. Ms. Watson said if a client had liquid assets of $900,000 under the new limitation, they would no longer be eligible for the program.
Ms. Giunchigliani asked again for clarification of who would be held harmless. Ms. Watson replied that the seniors whose income was at or below the federal poverty level. Ms. Giunchigliani asked what was the dollar amount for that level.
Ms. Watson said for income year 2002 the poverty level for a one-person household was $8,980 and a two-person household was $12,120. She noted a second component to the hold harmless clause. If the Division experienced a shortfall in the account and was not able to provide rebates at 100 percent for all eligible claimants, the Division would hold harmless those clients whose income fell at or below poverty level, would process their refunds, and then would approach the IFC for supplemental funds. If the IFC did not approve the supplemental fund request, the Division would reduce the other clients’ rebates by a percentage necessary to remain within their budget.
Assemblyman Hettrick asked for a definition of household income and if that was the income derived from federal income tax returns or calculated by the state of Nevada.
Ms. Heinz testified that the statute used the adjusted gross income if the individual filed a federal income tax return. Also, there were several additional items in the statute that covered income, such as non-taxable pensions.
Mr. Hettrick said there was nothing that reduced an individual’s income level below that on the filed federal tax return.
Ms. Heinz said there was not, that the additional qualifiers all increased the income from what was on the federal tax return.
Chairman Arberry asked if there was anyone else who wanted to testify for or in opposition to Assembly Bill 515. There was no further testimony and Chairman Arberry declared the hearing on Assembly Bill 515 closed.
Chairman Arberry turned the gavel over to Assemblywoman Giunchigliani.
Assembly Bill 392 (1st Reprint): Increases amount of longevity payments to state employees. (BDR 23-964)
Assemblyman Morse Arberry Jr., District No. 7, introduced Assembly Bill 392, and said it would increase longevity payments to state employees to encourage retention of employees in state service. He said that currently state employees were eligible for an annual longevity payment of $150 after serving 8 years in state government. For each additional year of service the longevity payment increased by $50. After 25 years a state employee would be entitled to receive an annual longevity payment of $1,000.
Mr. Arberry compared the longevity payment plan provided by the state with local governments within the state of Nevada.
Clark County and the City of Las Vegas employees earned a longevity payment based on a set percentage times their annual salary.
Mr. Arberry testified that A.B. 392 would increase the longevity payment for state employees from $50 to $100 for each additional year of service. Beginning in the year 2004, state employees with at least 17 years of service would realize an annual increase of $150 per year compared with the current $50 per year. For a state employee with 25 years of service, A.B. 392 would increase the longevity payment from $1,000 to $1,450.
Mr. Arberry testified that the projected cost of A.B. 392 was $351,000 in FY2003-2004 and $776,000 in FY2004-2005. Approximately one-half of the cost would come from the state General Fund. He noted that the Governor’s budget for the upcoming biennium did not recommend a cost-of-living salary increase for state employees. He said that if the budget could not provide a cost-of-living salary increase to state employees during the upcoming biennium an increase in the longevity program to assist in the retention of our most experienced state employees was something that he believed the Legislature should consider.
Assemblywoman Chowning asked Mr. Arberry to go over the figures again. She said after 25 years of service with the City of Las Vegas an employee would be eligible to receive $4,000 annually, yet a state employee after 25 years of service would receive $1,450.
Assemblyman Arberry said that was correct.
Scott MacKenzie, Executive Director, State of Nevada Employees Association, introduced himself and said they supported A.B. 392 and thanked Chairman Arberry for introducing it. He testified that with the recent pay increase that was expected from Clark County they anticipated that the turnover rate for state workers would increase. He said the State of Nevada Employees Association appreciated the attempt to give state employees a reason to stay in state service.
Chairwoman Giunchigliani said there was a fiscal note of about $1.5 million over the biennium.
Gary Wolff, representing the Nevada Highway Patrol Association and Teamsters Local 14, thanked Chairman Arberry for bringing A.B. 392 forward and also said he wanted to go on record in support of the legislation. He said that currently the Nevada Highway Patrol (NHP) was down more than 42 employees, most of whom were in Clark County, and the estimated cost to retrain those troopers was over $2 million. He said some individuals had estimated that the NHP might be down 60 positions. He said they lose employees so rapidly that it was hard to keep up. He said he believed that A.B. 392 was something very good that the Legislature could do for the employees.
Chairwoman Giunchigliani asked if there was anyone else who wished to testify for or in opposition to Assembly Bill 392. There being none, she closed the hearing on that bill.
Chairwoman Giunchigliani adjourned the meeting at 4:48 p.m.
Catherine Caldwell
Committee Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE: