MINUTES OF THE

SENATE Committee on Finance

 

Seventy-second Session

May 12, 2003

 

 

The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:13 a.m., on Monday, May 12, 2003, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

COMMITTEE MEMBERS PRESENT:

 

Senator William J. Raggio, Chairman

Senator Raymond D. Rawson, Vice Chairman

Senator Dean A. Rhoads

Senator Barbara K. Cegavske

Senator Sandra J. Tiffany

Senator Bob Coffin

Senator Bernice Mathews

 

STAFF MEMBERS PRESENT:

 

Gary L. Ghiggeri, Senate Fiscal Analyst

Bob Guernsey, Principal Deputy Fiscal Analyst

Russell J. Guindon, Deputy Fiscal Analyst

Brian M. Burke, Senior Program Analyst

Bob Atkinson, Program Analyst

Julie Brand, Program Analyst

Jeffrey A. Ferguson, Program Analyst

Pamela Carter, Committee Secretary

 

OTHERS PRESENT:

 

Charles W. Fulkerson, Executive Director, Office of Veterans’ Services

John P. Comeaux, Director, Department of Administration

Rick Bennett, Lobbyist, University of Nevada, Las Vegas

Robert E. Dickens, Lobbyist, University of Nevada, Reno

 

 

Gary L. Ghiggeri, Senate Fiscal Analyst:

As of May 12, 196 budgets have been closed in subcommittee, and 8 additional budgets will be closed this week, for a total of 204. Full committee closures are 148 budgets, and 261 additional budgets are scheduled for closure in full committee this week, resulting in 409 budgets being closed by the end of this week. One additional budget being closed not included in the Executive Budget, the Secretary of State’s Help America Vote Act (HAVA), was added last week.

 

All capital improvement projects (CIPs) have been reviewed by the subcommittee. There have been 115 bills referred to committee, and 82 bills are currently in committee. Of those, 71 are Senate bills and 11 are Assembly bills. We have heard 66 bills, and 9 additional bills are scheduled to be heard this week. Additionally, three Assembly bills will probably be heard on Thursday.

 

Assuming no new taxes are raised, based on the budgets that have been closed through last Friday, approximately $395 million will need to be raised in fiscal year (FY) 2004, and a cumulative amount of approximately $832 million would be needed by the end of FY 2005. This is based on actions taken through last week. These are all rough estimates, because not all the data has been entered into our system.

 

Chairman Raggio:

Let us look at Senate Bill (S.B.) 46. It was heard in committee on March 24, 2003.

 

SENATE BILL 46: Authorizes issuance of general obligation bonds to carry out Environmental Improvement Program in Lake Tahoe Basin. (BDR S-174)

 

Chairman Raggio:

I will accept a motion to do pass S.B. 46.

 

Senator Cegavske:

I am looking at the fiscal note; because there are two fiscal notes in the book, I want to clarify which one is accurate

 

Chairman Raggio:

One is from the Division of State Lands, dated January 22. It shows the revenue and expense. The other is the State Treasurer’s debt service cost.

 

Senator Cegavske:

The $27 million plus the $18 million is included. Is this correct?

 

Chairman Raggio:

The $27 million is the effect on the future biennia. The Division of State Lands shows for FY 2003, $8.2 million; FY 2004, $5 million; and FY 2005, $4.87 million. Those are the bond funds, the revenue from the bonds, and the fee expense.

 

SENATOR RAWSON MOVED TO DO PASS S.B. 46.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman Raggio:

Committee, please look at S.B. 177.

 

SENATE BILL 177: Makes appropriation to Department of Education for certain nonprofit public broadcasting stations that primarily serve educational, informational and cultural needs of communities in Nevada. (BDR S-1094)

 

Chairman Raggio:

I believe S.B. 177 could be indefinitely postponed based on the action we took.

Mr. Ghiggeri:

That is correct. The Joint Subcommittee on Human Resources/K-12 reinstated funding for this project in the Other State Education Programs budget last week at no additional General Fund cost for what was included in the Executive Budget, since that money had been reserved for reversion in the Executive Budget for FY 2004 and FY 2005.

 

SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 177.

 

SENATOR CEGAVSKE SECONDED THE MOTION

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman Raggio:

Please look at Assembly Bill (A.B.) 71, heard in committee on May 6, 2003.

 

ASSEMBLY BILL 71 (First Reprint): Authorizes Division of Wildlife of State Department of Conservation and Natural Resources to charge fees for advertisements on its website and in printed materials prepared by Division. (BDR 45-479)

 

SENATOR RAWSON MOVED TO DO PASS A.B. 71.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman Raggio:

Please look at S.B. 324

 

SENATE BILL 324: Makes various changes concerning Veterans’ Home Account and Gift Account for Veterans’ Home. (BDR 37-305)

 

Mr. Ghiggeri:

Mr. Guernsey will address this issue. It has to do with S.B. 324, approved by the committee last week.

 

Bob Guernsey, Principal Deputy Fiscal Analyst:

We have received a conflict notice in reference to passage of S.B. 324. The committee will recall this bill would have moved the funding from license plate revenue from the support of the Nevada Veterans’ Nursing Home, in Boulder City, to a gift account. The Senate Committee on Finance amended the bill, removing Section 3 to allow the funds to continue to support the operation of the home. Another bill, A.B. 192, was amended and inserted into it were the same provisions of S.B. 324 that allowed the funds to be moved from the operation of the veterans’ home into the gift account for the veterans’ home. The net effect is to remove funding in support of the home of $97,569, as currently constructed in the budget.

 

ASSEMBLY BILL 192 (First Reprint): Revises provisions relating to special license plates. (BDR 43-181)

 

Mr. Guernsey:

I discussed this with the Legal Division, which indicated the committee would have two choices: to amend S.B. 324 to repeal the provisions enacted in A.B. 192 and allow the $97,569 to remain as part of the funding, or to not take action on S.B. 324. If the committee chose not to amend S.B. 324 to remove the provisions of A.B. 192, you would have to come up with an extra $97,569 each year in the General Fund to balance the budget for the veterans’ home.

 

Chairman Raggio:

What did we take out of S.B. 324, which we amended and passed?

 

Mr. Guernsey:

The committee took out Section 3.

 

Chairman Raggio:

That section provided for the credit to the gift account. Since we took that out, what is the conflict?

 

Mr. Guernsey:

The conflict is with another amended bill (A.B. 192). It was amended and two provisions that do the same thing were inserted into it. It would make the funds generated from the license plate revenue not go into support of the home.

 

Chairman Raggio:

I am looking at the enrolled version of A.B. 192. It looks like they put back in what we took out. Is that what you are saying?

 

Mr. Guernsey:

That is correct. The same thing occurs on page 11 also, Mr. Chairman.

 

Chairman Raggio:

Where does the $97,569 come in?

 

Mr. Guernsey:

The $97,569 has been part of the budget of the Nevada Veterans’ Nursing Home in Boulder City. The revenue actually comes in as a revenue source for the general support of that budget. The agency requested, in S.B. 324, the funding be removed as part of the budget and be placed into a gift account so they could carry it forward from year to year and use it for other things rather than general support of the home.

 

The status is A.B. 192 has passed, and based upon A.B. 192, we would have to revise the budget when we close the veterans’ home budget and remove the $97,569 from the license plate revenue and substitute General Funds for that each year. The other option would be, according to the Legal Division, to amend S.B. 324 to repeal the provisions enacted in A.B. 192 in reference to the license plate revenue in support of the veterans’ home.

 

Senator Rawson:

That would save almost $100,000 a year in the General Fund.

 

Chairman Raggio:

How would that affect the veterans’ home when they do not have that money to continue operations?

 

Mr. Guernsey:

We would have to substitute General Funds into the home in place of license plate revenue. When we close the budget later today, there are significant savings due to a revised budget, but that funding is counted as part of the revenue in support of the Boulder City veterans’ home.

 

Senator Tiffany:

When we moved the money to the gift account, does that mean it could not be used for operations? Where does the gift account usually get used?

 

Mr. Guernsey:

Mr. Fulkerson is here, and he had options for use of the funds. It is totally at their discretion.

 

Senator Tiffany:

If we put it into operating, it has to go for operating, and that is it?

 

Mr. Guernsey:

It is up to them. They have a commission, and they could use it in whatever manner they choose in support of the veterans in the home.

 

Senator Tiffany:

Let us say we did not make up the $100,000 each year in the biennium in the General Fund. Could they then go to the commission and say they had a shortfall?

 

Mr. Guernsey:

We could not pass a budget that way because it would be out of balance. If you took the revenue out of the budget, we would have to take expenditures out of the budget.

 

Vice Chairman Rawson:

The staff recommendation would be to save the General Fund, I am assuming, and that would be to amend S.B. 324.

 

Mr. Guernsey:

That is correct, Mr. Vice Chairman. If that is what the committee chose, that is consistent with the action you took with S.B. 324.

 

SENATOR TIFFANY MOVED TO AMEND AND DO PASS S.B. 324 BASED ON STAFF RECOMMENDATION TO REPEAL PROVISIONS ENACTED IN A.B. 192.

 

SENATOR MATHEWS SECONDED THE MOTION.

 

Charles W. Fulkerson, Executive Director, Office of Veterans’ Services:

There are 13 license plates special to veterans, and $20 of each license plate fee is marked to go to the nursing home for its support. As I understand, when the original Nevada Revised Statutes (NRS) set this aside, it was to go to the nursing home to support items not provided for by the General Fund. We set up the gift account about the same time for this money to flow into, but when the original NRS was written, the money was directed to flow into the home account, which is the general operating account. That money offset money coming from the General Fund. We have been trying to get that changed. It has not been an issue because the home has not been open. We are open now, and there are things not provided by the General Fund we would like to purchase. Some of the items are a large, flat television set for residents to watch in the town hall, blanket warmers, and so forth.

 

Vice Chairman Rawson:

The motion before us would restore the money back to the veterans’ home account.

 

Mr. Fulkerson:

For general operations, yes, sir, and I am saying the money would not be put into the general operating fund, but the gift account so we can buy some of the things not provided for by the General Fund.

 

Vice Chairman Rawson:

Are you speaking against this amendment?

 

Mr. Fulkerson:

As I am following it, yes, sir.

 

Vice Chairman Rawson:

The question before us is do we have the General Fund to put into that account, which means essentially we would need to come up with $200,000. I do not know that we are prepared to do that.

 

Chairman Raggio:

What is the effect of our action on this motion?

 

Mr. Guernsey:

By amending S.B. 324 to repeal the provisions of A.B. 192, you would maintain the current status. The funds would continue to support the home rather than be transferred to the gift fund.

 

Chairman Raggio:

Mr. Comeaux, is there no money in there for the things he is talking about otherwise?

 

John P. Comeaux, Director, Department of Administration:

No, sir, there is not. If the committee does want to consider that, you might want to hold up on this action until you review their budget later this morning, because there are now recommended adjustments to that budget based on delayed opening and other things that will reduce the General Fund recommendation in the Executive Budget. I believe it is approximately $1.3 million.

 

Chairman Raggio:

We will hold up on the motion and go through the budgets.

 

Department of Taxation – Budget Page TAX-1 (Volume 1)

Budget Account 101-2361

 

Mr. Ghiggeri:

The Joint Subcommittee on General Government closed the Department of Taxation’s budget on Friday (Exhibit C). The closing of this budget resulted in additional General Fund costs of approximately $120,000 in FY 2004, and $73,000 in FY 2005. Issues considered by the subcommittee when closing this budget included the continued privatization of lockbox services, funding as required for the implementation of S.B. 314, and implementation of new and/or increased taxes as recommended by the Governor and approved by the 2003 Legislature. The subcommittee concurred with Budget Amendment No. 129 as submitted by the Budget Division, which will continue the privatization of lockbox services for the department. This amendment resulted in additional General Fund support of the department of approximately $107,000 in FY 2004 and approximately $93,000 in FY 2005. The total annual cost for lockbox services is approximately $414,000 per year.

 

The Executive Budget envisioned the department would assume lockbox service effective July 1, 2003, and included four new positions, seasonal salary costs, and related operating funds to be assumed by that function. Not included in the Executive Budget was approximately $370,000 that would have been required for the department to acquire the necessary equipment and to hire staff early to permit the assumption of that function on July 1. Six firms responded to requests for purchase (RFPs), with Bank One Corporation being selected as the vendor to provide the lockbox service. The Board of Examiners is currently scheduled to review and approve the contract, I believe, tomorrow. In approving this recommendation, the subcommittee requested the department to develop performance indicators for review by the 2005 Legislature to document the volume of dollars collected through the lockbox process. Additionally, the subcommittee requested the department to explore the use of electronic filing and collection of taxes in development of new technology for the collection of new and/or increased taxes as recommended by the Governor and approved by the 2003 Legislature.

 

The subcommittee also approved $25,000 in FY 2004 to permit contracting with the University and Community College System of Nevada (UCCSN) to collect data regarding electronic commerce conducted in Nevada and report the results of that study to the 73rd Session of the Nevada Legislature. The report is intended to provide information to the Legislature that will disclose the financial impact more stringent requirements for collection of sales and use tax on electronic commerce would have on retailers in Nevada. Not included in the department’s budget, although the subcommittee acknowledged, was $12.5 million in FY 2004 and $20 million in FY 2005, recommended by the Governor for implementation of the Governor’s recommended tax plan. The funding that is recommended will be considered as a separate issue when a tax plan has been decided, with funding to implement the plan included in the legislation for the plan. The subcommittee urged the department to work with fiscal staff on developing definitive costs for implementing the collection of whatever tax plans are ultimately approved.

 

Finally, the subcommittee concurred with staff’s technical adjustments for vacancy savings, buildings and grounds assessments, copier and lease costs, and computer hardware and software prices.

Chairman Raggio:

The real decision will be when a tax plan is developed and associated department costs for implementation of the tax plan are determined. Is that correct?

 

Mr. Ghiggeri:

That is correct.

 

Chairman Raggio:

I will accept a motion to approve closing the Department of Taxation budget account (B/A) in accordance with the report of the joint subcommittee.

 

SENATOR RAWSON MOVED TO CLOSE B/A 101-2361 AS RECOMMENDED BY THE JOINT SUBCOMMITTEE ON GENERAL GOVERNMENT.

 

SENATOR COFFIN SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman Raggio:

We will next address the State Department of Agriculture and Division of Minerals budget (Exhibit D. Original is on file in the Research Library.).

 

AGRI, Administration – Budget Page AGRI-1 (Volume 1)

Budget Account 101-4554

 

Jeffrey A. Ferguson, Program Analyst:

The Joint Subcommittee on General Government has completed its review of the budget accounts for the State Department of Agriculture and the Division of Minerals. The closing actions of the subcommittee have resulted in additional General Fund costs totaling $62,058 in FY 2004 and General Fund savings of $7,529 in FY 2005, when compared to the Governor’s recommended budget.

 

The first budget account was Administration, Budget Account 101-4554. The subcommittee approved the transfer of two existing clerical positions from other Department of Agriculture budget accounts to the Administration account. Both positions are currently funded 100 percent General Funds in their existing accounts. In the Administration account, the positions would be funded with 52 percent General Funds, and 48 percent through the department’s internal cost allocation plan, providing General Fund savings of $104,993 for the biennium. The subcommittee also approved a new accounting technician position, as recommended in the Executive Budget to assist with the increased number of financial transactions within the department. Fifty-two percent of the new positions’ funding would come from General Funds, totaling $46,037 for the biennium, while the remaining forty-eight percent would be funded through the department’s internal cost allocation plan.

 

The subcommittee also approved a pilot program to provide job-related awards to State Department of Agriculture employees based on job performance. This program is in addition to the State Merit Award Boards program, which provides awards based primarily on cost-saving ideas. The subcommittee based its decision on the fact awards from the current Merit Award Board are for cost‑saving ideas, while awards from the department’s pilot program would be for job performance. The program would be funded in each year of the biennium with $1,350 from the department’s internal cost allocation plan. The awards would not be cash awards, but rather would consist of chairs, training, software, or other items that would enhance the employee’s workplace.

 

Chairman Raggio:

I believe we ought to take these as we go though them. There were some other issues. What was the removal of the Nevada Beef Council operation?

 

Mr. Ferguson:

Mr. Chairman, for the past few years, the department has provided administrative assistance to the Nevada Beef Council. Senate Bill 486 would remove the beef council’s operations, and $7,500 of revenue that came in to the department. That is now gone and would be made up through the department’s cost allocation plan.

 

SENATE BILL 486 (First Reprint): Makes various changes regarding livestock and other animals. (BDR 50-570)

 

Chairman Raggio:

Is there a motion to approve the joint subcommittee report?

 

SENATOR RHOADS MOVED TO CLOSE B/A 101-4554 BASED ON THE JOINT SUBCOMMITTEE RECOMMENDATION GRANTING STAFF AUTHORITY TO MAKE THE NECESSARY ADJUSTMENTS TO CLOSE THIS ACCOUNT.

 

SENATOR COFFIN SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

AGRI, Plant Industry – Budget Page AGRI-10 (Volume 1)

Budget Account 101-4540

 

Mr. Ferguson:

In the Plant Industry account (Exhibit D), the Executive Budget recommended transferring all pest control operator fees from B/A 101-4540, which reverts unspent fees to the General Fund, to the Agriculture Registration Enforcement account, B/A 101-4545, which balances forward all unspent revenue. The Executive Budget also recommended transferring three of the five pest control operator positions currently in the Plant Industry account to the Agriculture Registration/Enforcement account. The subcommittee did not approve these recommendations because they are inconsistent with the Legislature’s historical stance that within budget accounts containing General Funds, fee revenue should be utilized first, and all remaining General Funds should be utilized last, with funds remaining unspent at the end of the fiscal year being reverted to the State General Fund.

 

In addition, instead of allowing the department to transfer excess pest control operator fees totaling $103,819 during the biennium to a non-General Fund account, the subcommittee voted to reduce the General Fund requirement in the Plant Industry account by this amount.

 

SENATOR RHOADS MOVED TO APPROVE AND CLOSE B/A 101-4540 BASED ON THE SUBCOMMITTEE RECOMMENDATION TO REDUCE THE GENERAL FUND REQUIREMENT.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

AGRI, Agriculture Registration/Enforcement – Budget Page AGRI-23 (Volume 1)

Budget Account 101-4545

 

Mr. Ferguson:

In the Agriculture Registration/Enforcement account (Exhibit D), as mentioned in the recommendations for the Plant Industry account, the subcommittee did not approve the transfer of the two pest control operator positions and fees from the Plant Industry account to the Agriculture Registration/Enforcement account. The subcommittee did approve $226,363, during the biennium, for replacement analytical equipment, funded with reserve reductions.

 

Chairman Raggio:

Why did the subcommittee not approve the transfer of the two pest control operator positions to B/A 101‑4545?

 

Mr. Ferguson:

The transfer of those positions went hand in hand with transfer of the fees in Plant Industry, and those are pest control operator fees. They wanted to keep those positions in the Plant Industry account where all excess fees would be used to fund those positions, and revert anything left over to the General Fund.

 

SENATOR TIFFANY MOVED TO APPROVE AND CLOSE B/A 101-4545 BASED ON THE SUBCOMMITTEE RECOMMENDATION.

 

SENATOR RHOADS SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

AGRI, Veterinary Medical Services – Budget Page AGRI-33 (Volume 1)

Budget Account 101-4550

 

Mr. Ferguson:

In the Veterinary Medical Services account (Exhibit D), the subcommittee approved a General Fund appropriation of $70,782 in each year of the biennium to continue funding the Virginia Range wild horse program. During the 2 previous fiscal years, the department received funding in the amount of $90,136 and $72,919, respectively, from the emergency fund as administered by the State Board of Examiners. The subcommittee also approved the utilization of $33,244 in each year of the biennium to create a new, full-time position to manage the Virginia Range wild horse program. Funding for the new position would come from a reduction to General Funds for seasonal positions. The subcommittee based its decision on the fact a full-time position would be able to more efficiently operate the program versus seasonal employees.

 

The subcommittee also recommended restoring the veterinary diagnostician position to full-time for both years of the biennium, and provide additional funding for the positions incumbent to complete work on the dog bite prevention program, including the production and distribution of a video. The subcommittee recommended funding these actions through a reduction to vacancy savings totaling $81,936 for the biennium and a General Fund appropriation totaling $39,697 in FY 2004 only. This would result in General Fund costs totaling $121,633 over the biennium.

 

SENATOR TIFFANY MOVED TO APPROVE AND CLOSE B/A 101-4550 BASED ON THE SUBCOMMITTEE RECOMMENDATION.

 

SENATOR RHOADS SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

Chairman Raggio:

I note in our packet we had the budget on Noxious Weed and Insect Control. Did we already close that, otherwise?

 

Mr. Ferguson:

That is on page 5 of the packet. It was closed with minor technical adjustments.

 

AGRI, Livestock Inspection – Budget Page AGRI-40 (Volume 1)

Budget Account 101-4546

 

Mr. Ferguson:

The Livestock Inspection budget can be found on page 4 of your closing document (Exhibit D). The subcommittee voted to fund 50 percent of the livestock inspection administrator position with $74,030 from the General Fund over the biennium, as recommended in the Executive Budget. However, instead of introducing General Funds into a non-General Fund account, as recommended by the Governor, the subcommittee recommended transferring the position to the General Fund-supported Plant Industry account, where it would be funded with 50 percent General Funds and 50 percent from a transfer of funds from the Livestock Inspection account. The subcommittee reasoned this position spends 50 percent on matters relating to the Agricultural Enforcement Unit, which is funded primarily with General Funds in the Plant Industry account.

 

SENATOR RHOADS MOVED TO APPROVE AND CLOSE B/A 101-4546 BASED ON THE SUBCOMMITTEE RECOMMENDATION.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

AGRI, Predatory Animal & Rodent Control Budget Page AGRI-57 (Volume 1)

Budget Account 101-4600

 

Mr. Ferguson:

In the Predatory Animal and Rodent Control budget, found on page 4 of the closing document, I will give you a bit of background. In FY 2001, a State position was eliminated by the agency and converted to a federal position, because the agency believed advertising and hiring the position through the federal program would provide a greater field of applicants with the needed qualifications. Costs for the federal position are currently funded through a contract with the U.S. Department of Agriculture and the federal Wildlife Services program. During the current biennium, this position did not receive a cost‑of‑living allowance (COLA), although most other state employees received COLAs on July 1, 2001 and 2002.

 

The Executive Budget recommends General Funds totaling $4,233 in each year of the biennium to provide a cost-of-living increase for this position. The Assembly members of the subcommittee did not approve the Governor’s recommendation to provide additional General Funds to fund the COLA, whereas the Senate members of the subcommittee did approve the Governor’s recommendation.

 

Lastly, in this account, the subcommittee approved General Funds totaling $14,157 during the biennium for the addition of a new 0.25, full-time equivalency (FTE) position to provide clerical support for the 12 Predatory Animal and Rodent Control field staff located in Reno. Previously, a federally funded position provided clerical support to the state staff. However, this federal position is no longer able to provide support to state employees, necessitating the need for the 0.25 FTE clerical position.

 

SENATOR RHOADS MOVED TO APPROVE AND CLOSE B/A 101-4600 IN ACCORDANCE WITH THE SENATE MEMBERS’ ACTION ON THE JOINT SUBCOMMITTEE.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman Raggio:

Mr. Ferguson, you have four budgets. Is that correct?

 

Mr. Ferguson:

That is correct, Mr. Chairman. The subcommittee voted to close the following budget accounts, found on page 5 of the closing document, with only minor and technical adjustments: Noxious Weed and Insect Control, B/A 101-4552; Weights and Measures, B/A 101-4551; Gas Pollution Standards, B/A 101-4537; and the Department of Minerals, B/A 101‑4219.

 

Chairman Raggio:

I need a motion on the four budgets just referenced.

 

SENATOR TIFFANY MOVED TO APPROVE AND CLOSE B/A 101-4552, B/A 101-4551, B/A 101-4537, AND B/A 101-4219 BASED ON THE TECHNICAL ADJUSTMENTS RECOMMENDED BY STAFF.

 

SENATOR RHOADS SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Brian M. Burke, Senior Program Analyst:

The Executive Budget contained a number of errors and omissions corrected by the subcommittee at a General Fund cost of $7.28 million over the biennium. The subcommittee was able to make these corrections in the total General Fund amounts recommended by the Governor by realizing General Fund savings made available because of other subcommittee actions. Under the maintenance 200 (M-200) formula funding and enrollment growth, based on the enrollment projections used to prepare the Executive Budget, the amounts recommended by the Governor would have increased formula funding allocations from 80.29 percent to 86 percent of the calculated formula amounts in each year of the biennium. However, because of updated enrollment projections, there were significant increases in the enrollment calculations.

 

System-wide, the new projections would result in enrollments 1661 FTE higher in the first year of the biennium and 2294 FTE higher in the second year of the biennium. If we applied the Governor’s 86 percent formula recommendations to the revised enrollments, costs would have increased by $9.1 million in the first year of the biennium, and $11.8 million in the second year, for $20.9 million. Those were beyond the amounts reflected in the Governor’s recommended budget. The increased General Fund share would have been $14.2 million for the biennium.

 

The subcommittee, instead, chose to retain the total funding levels recommended by the Governor, and the higher enrollment projections caused the percentages of the formulas to drop to 84.45 percent in the first year, and 84.09 percent in the second year. However, it is important to note there is no net change in the total formula amount recommended to be allocated to the UCCSN, and the subcommittee’s actions removed Truckee Meadows Community College (TMCC) from a hold harmless eligible position. One other note, the Governor’s budget did not employ the 3-year weighted average enrollment and formula methodologies for the Nevada State College (NSC) at Henderson.

 

For enrollment-driven, resident-student fee revenue re-projections, the higher enrollment projections drove increases in the anticipated student fee revenues. The revised fee revenue projections were $6.7 million higher than the amounts recommended by the Governor, resulting in a corresponding General Fund reduction.

 

Under estate taxes, the Executive Budget proposed to continue the use of State tax revenues with allotments in the base and maintenance modules totaling $47 million in FY 2004 and $45.6 million in FY 2005. The subcommittee engaged in lengthy discussions about the phase out of the Estate Tax as a revenue source for the State of Nevada. You will recall the Economic Growth and Tax Relief Reconciliation Act of 2001 annually reduces and then repeals the Estate Tax. By 2005, the state Estate Tax credit is repealed entirely. The UCCSN projected funding in the Estate Tax account would be insufficient to support the recommendations in the Governor’s budget. The shortfall was projected at $9.6 million by the end of the biennium.

 

During the hearings, the UCCSN proposed a change to the Governor’s budget whereby federal estate tax (Estate Tax) funds would be transferred on a monthly basis to the state General Fund up to the level of expenditures approved in the final budget. All such expenditures would be appropriated from the state General Fund. The UCCSN indicated, at the time, if state taxes were to fall short, vital programs at UCCSN would be saved from elimination. The system did acknowledge this proposal would move the risk of a shortfall to the State. However, the system also noted the General Fund already takes on even greater risks in sales, gaming, and many other tax sources. The subcommittee concurred with the UCCSN proposal and replaced the adjusted $89.2 million in estate tax allocations with General Fund appropriations.

 

It is also important to note S.B. 415 would eliminate the current $2.5-million interest-generation requirement currently associated with the Estate Tax account. The subcommittee suggested language be added to S.B. 415 to recognize the transfer of Estate Tax revenues to the General Fund.

 

SENATE BILL 415 (First Reprint): Removes certain restrictions on use of money in Estate Tax Account in Endowment Fund of University and Community College System of Nevada. (BDR 32-1264)

 

Mr. Burke:

Within the adjusted base budget, the subcommittee made corrections and adjustments to UCCSN base costs that added General Fund appropriations of $564,000 in the first year, and $549,000 in the second year. The most significant additions included utility adjustments at University of Nevada, Reno (UNR), and instructional and vacancy adjustments at TMCC. The subcommittee also adjusted the vacancy-saving calculations for the non-formula budgets and changed that from a 1 percent to a 2 percent calculation for professional positions.

 

The subcommittee made adjustments to several of the recommended inflationary items within the inflation modules, resulting in savings of $75,000 for the biennium, compared to the Governor’s recommendation. Continuing on to new space, M-201 module, the subcommittee concurs with the Governor’s proposal to introduce state support to assist in operating the UNR Fire Science Academy in Carlin. The subcommittee approved UNR’s revised request that would fund operation and maintenance (O&M) costs of $786,000 per year or $1.57 million for the biennium. There is also one-time equipment funding of $40,000 in FY 2004.

 

The subcommittee also endorsed the Governor’s new recommendation of $1.2 million in FY 2004 and $1.4 million in FY 2005 to support O&M of the University of Nevada, Las Vegas (UNLV) dental school. The subcommittee recommends a Letter of Intent requesting UNLV to establish a reserve for reversion for state-supported O&M funding associated with space that may be leased at the complex. This is consistent with UNLV’s comments at an earlier Interim Finance Committee (IFC) meeting. The subcommittee approved a number of modifications to the new space module that resulted in net decreases of General Fund appropriations of $360,000 in the first year and $427,000 in the second year of the biennium, as compared to the Governor’s recommended budget.

 

For the recharge module, the subcommittee corrected errors in the portion of the Executive Budget that prorates O&M costs to UNR area budgets. It was also noted during subcommittee discussions UNLV does not employ recharge mechanisms similar to UNR, and as a result, full costs of operations of the law school and dental school are not reported in the respective accounts. Rather, some portions are reflected in the UNLV main account. The subcommittee approved a Letter of Intent requesting UNLV to study the possibility of employing a recharge mechanism similar to the method used at UNR. They will be providing semiannual progress reports to the IFC.

 

Within the M-203 module, there were actually three maintenance items addressed. The first is system capacity expansion. The subcommittee approved $5.57 million for the biennium to expand hardware and software and to fund ongoing system maintenance costs. For the committee’s information, the university had initially requested $10.7 million. This is a reconfigured request; as compared to the Governor’s budget, it is $476,000 lower.

 

Under the Experimental Program to Stimulate Competitive Research (EPSCoR), the subcommittee approved the Governor’s recommendation of $400,000 per year to support new grant programs associated with EPSCoR.

 

The third item was UNLV dental school enrollment growth. The subcommittee concurs with the Governor’s recommendation to provide funding for UNLV dental school growth in anticipation of dental school enrollments increasing from 75 students in FY 2003 to 150 students in FY 2004, growing to 225 students in FY 2005, and the optimum enrollment goal of 300 total students. Twenty‑four new positions would be added in FY 2004, with 29 additional positions added in FY 2005.

 

Under fringe benefit adjustments, the Executive Budget includes $9.5 million the first year and $15 million the second year to fund fringe benefit cost increases. These are for retirement, group health insurance, retired employees group insurance, and personnel assessment. There were several calculation errors in the Governor’s budget. To correct the retirement error, the subcommittee added General Fund appropriations of $1.12 million in the first year and $1.15 million in the second year. Under retired employee group insurance assessments, the subcommittee added $1.66 million per year, or $3.32 million for the biennium.

 

For occupational studies, as recommended by the Governor, the subcommittee approved a total of $52,722 in each year of the biennium to reclassify classified positions in the Library and Archives Occupational Group, pursuant to a study by the Department of Personnel.

 

In M-307, adjustments to merit pay calculations, the subcommittee concurred with the Governor’s recommendations to reduce merit pay funding by $62,000 in the first year and $121,000 in the second year for professional positions at or beyond the maximum pay levels established in the UCCSN salary scales. This recommendation would place partial limits on State funding provided for professional salaries beyond the maximum level. The subcommittee also voted to defer budgeted merit pay for the first 6 months of 2004, which resulted in a General Fund savings of $3.23 million.

 

In the M-501 module, Federal Animal Welfare Act, the subcommittee approved the Governor’s recommendation for a General Fund appropriation of $110,000 to the School of Medicine to restore the director of laboratory animal medicine position to full-time and to fund the associate director’s position.

 

In M-580, the State Drinking Water Act, the subcommittee concurred with the Governor’s recommendation to fund $117,000 the first year and $5,400 in the second year of the biennium, primarily to purchase equipment needed to comply with new Environmental Protection Agency (EPA) public water system regulations.

 

In enhancement 225 (E-225), National Direct Student Loan, the subcommittee approved General Fund appropriations of $3,800 per year to the National Direct Student Loan program to restore funding to the FY 2003 work program levels. Within student fees, the subcommittee concurred with tuition and fee increases approved by the Board of Regents and also endorsed the regents plan that directed significant portions of the annual increases to the UCCSN capital and general improvement fee funds and the student access fund. The subcommittee approved adjustments and corrections to nonresident student revenue estimates, which resulted in General Fund savings of $1.25 million in the first year and $997,000 in the second year of the biennium.

 

Mr. Burke:

The subcommittee approved modifications to the Authorizations Act back language to allow augmentations of registration fee revenues without prior IFC approval, if the revenues are used solely for instructional costs related to providing additional cost sections. However, prior IFC approval would still be required to augment nonresident tuition revenues for any purpose. In addition, IFC approval would be required to augment resident fee revenues not approved for additional class sections.

 

There were a number of unfunded enhancement decision items requested by the UCCSN, but not included in the Governor’s recommended budget, and the subcommittee took action on several of these items. The first is the taxonomy. As directed by a Letter of Intent from the 2001 Legislature, UCCSN developed a revised course cost classification system, called “the taxonomy.” The IFC and the subcommittee advised the UCCSN the taxonomy should be cost-neutral. However, the proposal submitted by the UCCSN would have cost $4.47 million for the biennium. Recognizing the fiscal difficulties faced by the State, the system withdrew its funding request. The committee should note, left unchanged, the classification of course cost will continue to include inconsistencies. Therefore, the subcommittee approved a new Letter of Intent advising UCCSN to develop cost-neutral, consistent course taxonomy to be used in budget preparations for the next biennium.

 

Under item No. 2, dental school equipment, again, these are unfunded items. The UCCSN sought $4.7 million in dental equipment funding in FY 2004. Some of the larger ticket items are dental operatory chairs, sterilizers, X-ray equipment, and classroom computer terminals and laptops. Because of the committee’s previous savings actions, $3.23 million in General Fund savings was available, with which the subcommittee wishes to purchase dental school equipment.

 

Under item No. 8, athletic fee waivers and gender equity, UCCSN had requested $1.73 million in each year of the biennium to adopt fee waivers for student athletes, permitting athletic departments to further address compliance with student athlete participation rates and improve gender-equity compliance in critical areas. The subcommittee took no action on this issue. However, during the closing hearing, the UCCSN indicated a willingness to cover fee waivers at the universities and Community College of Southern Nevada, Las Vegas, during the 2003-2005 biennium under the 84.45 percent and 84.09 percent formula scenarios, with no additional funding. This would be with the understanding, in future biennia the Legislature would support the fee waiver for gender equity. However, the subcommittee indicated it could not guarantee the action of future Legislatures.

 

Under item No. 15, nursing enrollment expansion, there was a lot of discussion. The UCCSN’s initial plan to double nursing capacity was submitted, pursuant to A.B. No. 378 of the 71st Legislative Session. The initial cost was $12.1 million for the biennium. A reduced cost plan was developed to address Nevada’s nursing shortage and to increase nursing school enrollment. The revised plan resulted from meetings initiated by Assembly leadership that included representatives of Nevada’s hospitals and nurses in the UCCSN. Under the revised plan, nursing program enrollment would increase from 686 students in FY 2003 to 1026 by the end of the biennium. The UCCSN introduced refinements to the revised plan ultimately approved by the subcommittee, and under the approved plan, the 84.45 percent and 84.09 percent formula funding levels recommended by the committee would allow the larger campuses to absorb higher nursing enrollments. The Nevada Hospital Association agreed to fund $559,000 in equipment costs for the biennium. 

 

Based on the UCCSN risk manager’s reserve assessment, there were workers’ compensation rate adjustments to provide a one-time General Fund savings of $1.37 million over the biennium to be directed to the nursing plan. General Fund appropriations of $454,612 were added through savings realized from other adjustments. The plan also envisioned receipt of $300,000 in trust fund for public health interest revenue distributions to support the nursing loan revolving fund. The subcommittee approved the revised nursing enrollment expansion plan with the understanding summer session enrollment will be incorporated into formula calculations for the next biennium.

 

There were other closing actions taken by the subcommittee that added to the Governor’s recommended budget. The first is the Pediatric Diabetes and Endocrinology Center. Again, these were from savings on other subcommittee actions, but the subcommittee added General Fund appropriations of $566,000 in each year of the biennium to support the center. The subcommittee added General Fund appropriations of $36,000 in each year of the biennium to restore the State Climatologist position. That funding was eliminated in the State Department of Conservation and Natural Resources budget. The subcommittee added $125,000 per year to support operations of the Nevada Small Business Development Center. The subcommittee also added funding to add a cooperative extension educator in Mineral County.

 

To summarize the actions of the subcommittee, independent of the Estate Tax funding shift, the subcommittee’s actions resulted in General Fund savings of $133,000 for the biennium. However, it is important to note the subcommittee made major revisions to the Governor’s budget within the confines of the total General Fund amounts recommended by the Governor. The subcommittee funded a nursing plan that will nearly double nursing enrollments by the end of the biennium. Funding was provided for $3.23 million in dental school equipment needs. Nearly $7.3 million in General Fund errors were corrected. Pediatric diabetes and endocrinology received $1.3 million in General Fund appropriations. Funding was added to retain the State Climatologist and an extension educator in Mineral County and enhance support for the Nevada Small Business Development Center.

 

Finally, while enrollment formula percentages dipped because of higher enrollment projections, the subcommittee sustained the total formula amounts recommended by the Governor. These General Fund savings estimates assume full receipt of the Estate Tax revenue reflected in the Governor’s budget. If the UCCSN’s Estate Tax projections were correct, there would be a General Fund shortfall.

 

Senator Tiffany:

Mr. Ghiggeri, could you tell me, in the last biennium, what the General Fund number was? Then, if we close like this, what General Fund amount would be required in the upcoming biennium? I would like to see the percentage of growth.

 

Mr. Ghiggeri:

For the university system by itself, I do not have the number with me. I can get it and provide it to you.

 

Mr. Burke:

I believe I can answer. On page 15 of your closing packet, the Governor recommended $1.26 billion for the 2003-2005 biennium, and that would be an increase, overall, of 23.2 percent over the $1.03 billion approved by the Legislature. The Executive Budget included $890.74 million in State General Fund appropriations, which is $173.3 million or 24.2 percent more than the $717.44 million approved. Again, this is independent of the Estate Tax shift, of $89.2 million.

 

Senator Tiffany:

What is the difference between the 23.2 percent and the 24.2 percent?

 

Mr. Burke:

The 24.2 percent is the General Fund increase, as compared to the budget approved for the previous biennium. The 23.2 percent is the total amount, including fees and all other sources of revenue.

 

Senator Coffin:

Am I right in thinking it is about $400 million more? All right, it is $238 million. Is that the total increase recommended in this report?

 

Mr. Burke:

As far as the General Fund, the total amount would be reduced overall by the subcommittee’s actions by $133,000. Again, that is independent of the Estate Tax shift. The Estate Tax shift moves $89.2 million to the General Fund, which is why I have been trying to keep those two separate. If the estate taxes come in as projected by the Governor, they would be put into the General Fund, creating a net zero at the Governor’s recommended amounts. The university is projecting a shortfall.

 

Senator Coffin:

I believe the Senator was trying to find out how many millions more were being appropriated, but there are many one-shot millions in there with the estate tax to fill in the operating gaps. Is that correct?

 

Mr. Burke:

I am trying to think of the one-shots.

 

Senator Coffin:

What I meant by one-shot, for example, was the Estate Tax absorption.

 

Mr. Burke:

I see where you are going, Senator. That would be a one-time transfer of an estate tax unless more estate taxes trickle in after the next biennium. As I opened, the Estate Tax is being phased out as a revenue source by 2005, however, there may be some estates that have not been settled by the end of the biennium, which could bring in additional revenue.

 

Senator Coffin:

Were there any discussions of programs, in general, the “larger picture” kinds of discussions in the subcommittee about whether or not to continue certain programs? I am thinking specifically of the Nevada State College (NSC) at Henderson. What are we spending on that campus in this biennium?

 

Mr. Burke:

In the Executive Budget for the NSC at Henderson, in the first year of the biennium there is $3.2 million, $2.8 million of which are General Fund appropriations. In the second year of the biennium, the Governor recommends $4.6 million, $3.97 million of which are General Fund appropriations.

 

Chairman Raggio:

I believe that is based on enrollment projections of 300 students in the first year of the biennium and 500 students in the second year.

 

Mr. Burke:

To clarify, the NSC at Henderson used a target of 300 and 500 FTE enrollments. They did not run those through the formula, but used them for the revenue projection part of the funding.

 

Senator Coffin:

The question I have, and it is not necessarily for you, Mr. Burke, is did you vet the college in the sense of its purpose and the projections of enrollment? That is the most controversial item that continually occurs. It is troubling because I was never quite convinced we needed it. On the other hand, I know significant reductions were made in money allocated to NSC at Henderson. I am curious of what the picture is for that campus.

Chairman Raggio:

I believe the actual FTE for FY 2003 was 146, and the testimony indicated it was an important facility. The Board of Regents endorsed and approved NSC at Henderson. The positions have been contracted for, commitments are in place for operation of the college, and the Board of Regents felt it would be impractical to discontinue operations. The Board of Regents believes it is important to continue the nursing and teaching programs at the college.

 

Senator Rawson:

I believe it is part of the university system’s promise to more than double the number of NSC nursing graduates. Of the 2000 teachers needed each year, we are graduating approximately 600. It is part of that program. Whether we are an advocate for it or not, I believe the system has built a good part of its strategy around increasing nurses and teachers.

 

Senator Mathews:

What is the number of nursing students the college hopes to add this year? The reason I ask is, even though I believe it is part of the university’s plan to increase teachers and nurses, I do not believe it is significant enough for the expense of operating NSC at Henderson.

 

Mr. Burke:

It looks like NSC at Henderson would add 80 nursing enrollment students.

 

Senator Mathews:

Eighty people could be readily absorbed into the other colleges. I do not believe the amount of money we are spending at NSC at Henderson is justified.

 

Chairman Raggio:

In addition to nursing, there is also teaching.

 

Senator Mathews:

Yes, but how many teachers are being produced?

 

Chairman Raggio:

They are projecting 300 and 500 overall students.

 

Senator Rawson:

This is not in my district, either, but we have gone down a path, and it seems to me the Chancellor talked about the reasons, back when the decision was made, for needing a 4-year, degree-granting institution. Nevada State College at Henderson fills several niches in the university system. It offers mid-level tuition for those students who cannot afford tuition at UNLV. This is a less expensive way of growing those student numbers than to put them all into UNR or UNLV. There is some rationale for doing this. I am not sure it makes sense to go in and cut those programs now.

 

Chairman Raggio:

Most of the expense is for positions with contracts in place.

 

Mr. Burke:

That is correct. There are contracts in place, and that would have to be looked at.

 

Senator Coffin:

I should have disclosed that my wife is an assistant professor at the Hank Greenspun School of Communications at UNLV. I will go ahead and vote on the budget. I just brought this up because I wanted to have a feel for the fact you all are really satisfied, other than Senator Mathews, NSC at Henderson will fulfill its mission and there will be enough students. We approved this last time, and they did not get adequate enrollment numbers.

 

Chairman Raggio:

The subcommittee did approve the college, it was discussed at length, and that was the decision made by the joint subcommittee.

 

Senator Mathews:

I believe we should have done what Great Basin College did. If we wanted people to complete a 4-year nursing program in some fashion, they could have done the same thing at the Community College of Southern Nevada in Henderson with a 4-year nursing program and that particular 100-plus students could still be absorbed at those institutions, as well as the staff.

 

Rick Bennett, Lobbyist, University of Nevada, Las Vegas:

First, I would like to give a little background information. As you will recall, during the 71st Legislative Session, there was a bill that would have provided $1 million in start-up costs for the State college, and in the closing hours, was not approved. I believe not getting start-up money put the college behind in getting organized, planning, creating curriculum, schedules, and so forth, and that uncertainty left them unable to generate the information necessary for students to make decisions for enrolling in the State college, initially. You also know the projections originally proposed were probably, again, overly optimistic.

 

I believe this budget includes a more realistic enrollment FTE. The new president of the State college, Dr. Romesburg, is making tremendous progress in the community in getting the word out, and he believes those FTE numbers are realistic and easily achievable by the State college. We at UNLV support his efforts and are working in a number of ways to support the State college in collaborative efforts. We believe, in the long run, the State college will be of benefit, not only to UNLV, but also to the State's entire university system.

 

Senator Coffin:

What would be the cost per student per capita at NSC at Henderson versus other campuses?

 

Mr. Bennett:

Initially, the total cost per student is high, and it will continue to be high until they reach a certain FTE number of at least 1000. That should occur in less than 5 years.

 

Robert E. Dickens, Lobbyist, University of Nevada, Reno:

The University of Nevada, Reno, supports NSC at Henderson. We are the academic-accrediting, sponsoring institution for Henderson. We have been involved in the planning of NSC’s curriculum, and in the development of its library resources. I would point out if one started to worry about the cost‑effectiveness of a start-up college or university in Nevada, we would have none. The State of Nevada had the University of Nevada before it had a high school. I do not believe anyone asked when UNLV got started as Nevada Southern University whether or not it was cost-effective, and I am not sure that was the case with the community colleges.

 

I would encourage you to adopt a corporate perspective on this issue because this is a new business. It will have diseconomies of scale because it is a start‑up. It is extremely important to continue on the course we set out upon as a State to develop mid-tier institutions, State colleges offering opportunities and options that are more cost effective than research universities. I would also point out NSC at Henderson has acquired Bureau of Land Management land. There was an appropriation in the 71st Legislative Session for its first building. Once those things begin to come into place, I believe you will find the cost of the institution coming in line with other mid-tier institutions in the Nation.

 

Chairman Raggio:

We are going to meet this head-on. I will accept a motion, first, to include the recommendations of the Nevada State College in the UCCSN budget.

 

Senator Rawson:

I need to disclose I am on leave of absence from the university system.

 

SENATOR RAWSON MOVED TO INCLUDE THE RECOMMENDATIONS OF THE NEVADA STATE COLLEGE AT HENDERSON IN THE UCCSN BUDGET.

 

SENATOR COFFIN SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATORS CEGAVSKE AND MATHEWS VOTED NO.)

 

*****

 

Chairman Raggio:

I will now accept a motion to approve the joint subcommittee’s recommendation to include NSC in the UCCSN.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE THE UCCSN BUDGET BASED ON THE JOINT SUBCOMMITTEE’S RECOMMENDATION TO INCLUDE NSC IN UCCSN.

 

SENATOR COFFIN SECONDED THE MOTION.

 

Senator Tiffany:

I would like to make a few comments because I am going to vote no on this budget. The reason I am voting no is due to the funding formula. I was willing to go up to 82 percent, but we have clearly gone over that. In addition, I do not agree with taking the Estate Tax and having the General Fund assume the responsibility. I do not agree with the UNR Fire Science Academy being brought into the General Fund. I do not agree with the Shadow Lane Complex as accepting the operations and maintenance, and I do not accept the add-ons to the Governor’s budget. I believe the growth of 24.2 percent is more than I was willing to go.

THE MOTION CARRIED. (SENATOR TIFFANY VOTED NO.)

 

*****

 

Chairman Raggio:

We will now go to the Health Administration budget.

 

HR, Office of Health Administration – Budget Page HEALTH-1 (Volume 2)

Budget Account 101-3223

 

Bob Atkinson, Program Analyst:

The joint subcommittee reviewed 18 budgets of the State Health Division. The subcommittee recommendations result in General Fund savings of $1,283,093 in FY 2004 and $1,384,110 in FY 2005. Those savings are detailed on page 6 of the packet (Exhibit E. Original is on file in the Research Library.). The following highlights the significant closing recommendations of the subcommittee. We will talk about nine of the budgets. The other nine are listed on page 5 and were recommended by the Governor, with technical adjustments.

 

In the Office of Health Administration (OHA), the subcommittee recommends approval of the OHA budget, as submitted by the Governor, with two exceptions. The Executive Budget recommended a Health Insurance Portability and Accountability Act (HIPAA) compliance officer for the Health Division to be funded entirely with General Fund support. The subcommittee recommends the position be funded through a combination of General Fund support and agency indirect cost revenues proportionate to the funding for the Health Division activities subject to the regulation of HIPAA. This recommendation results in General Fund savings in the amount of $42,941 in the first year of the biennium and $54,814 in the second year.

 

In addition, during the budget hearing on the health administration account, the Health Division requested the subcommittee consider approval of five new positions to be funded with agency indirect cost funds. The division indicated these positions were not requested in the Executive Budget because the indirect cost rates were not known until recently. The subcommittee recommended approval of these five new positions to include an administrative services officer II, an accounting technician I, a management analyst II, an administrative assistant II, and a computer network technician I. These positions would be in the division office and funded with indirect costs.

 

Chairman Raggio:

I will accept a motion to approve and close B/A 101-3223 based on subcommittee recommendations.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 101-3223 BASED ON THE SUBCOMMITTEE RECOMMENDATIONS.

 

SENATOR MATHEWS SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATORS COFFIN AND TIFFANY WERE ABSENT FOR THE VOTE.)

 

*****

HR, Vital Statistics – Budget Page HEALTH-7 (Volume 2)

Budget Account 101-3190

 

Mr. Atkinson:

The Vital Statistics budget account is on page 10 of your packet. The subcommittee recommends the Vital Statistics budget account be closed as recommended by the Governor. During the subcommittee consideration of this account, the subcommittee became aware fees charged for birth and death certificates in Nevada were lower than the average of the western states. The subcommittee recommends these fees be raised $2. These fees are deposited directly into the State General Fund and are not deposited into this budget account. The subcommittee noted A.B. 381 proposed an increase of $1 in the fee for death certificates, and if that bill passed, the portion of the increase recommended by the subcommittee would be $1 for death certificates. Assembly Bill 381 passed the Assembly on April 28, 2003, and is currently in the Senate Committee on Human Resources and Facilities.

 

ASSEMBLY BILL 381: Revises provisions governing purpose, membership and procedure of multidisciplinary team to review death of child. (BDR 38‑208)

 

Chairman Raggio:

I will accept a motion to approve and close B/A 101-3190 as recommended by the subcommittee.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 101-3190 AS RECOMMENDED BY THE SUBCOMMITTEE.

 

SENATOR RHOADS SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)

 

*****

 

HR, Health Aid to Counties – Budget Page HEALTH-16 (Volume 2)

Budget Account 101-3209

 

Mr. Atkinson:

This budget is detailed on page 11 of your packet. The Governor recommended and the subcommittee concurred the General Fund pass-through funding to the health districts of Clark and Washoe Counties should be eliminated. In addition, the subcommittee concurred with the Governor’s recommendation to eliminate this account in its entirety and the Pollution Control funding that had been distributed through this account be distributed directly from the Pollution Control account in the future.

 

Senator Rawson:

There has been discussion, since we closed this and removed the placeholder, that there be a minimal figure be left in so it could, at least, be addressed in the future. Eleven cents per capita turns out to be approximately $200,000. If we held that with $100 or some amount, I believe the counties would have less angst about it.

 

Chairman Raggio:

A problem is, the two counties involved are more financially healthy than the State.

 

Senator Rawson:

That is true. However, after we are finished with all of our packages this session, they may want to be able to come back and argue the point. It is difficult if we strip that out. Whether it is real or not, I believe they perceive this as a significant loss. Last session a promise was made to restore it to its full value, and I believe we made a decision this session not to.

 

Chairman Raggio:

In looking at the sheet, if they wanted to restore the General Fund portion, it is 75 percent of the $1.10 rate, which would be $1.6 million for FY 2004 and $1.7 million for FY 2005.

 

Senator Rawson:

I believe all they are asking for is a placeholder, a $100 appropriation or a $10 appropriation, so the issue can be discussed next time.

 

Chairman Raggio:

Mr. Comeaux, do you have any suggestions?

 

Mr. Comeaux:

Mr. Chairman, I am not sure what this would accomplish. The matter can always be discussed and I am not sure it would make it any easier if we had $100 or $1,000. It is going to be difficult to go from zero, but it will be, in my opinion, just as difficult to go from something slightly more than zero.

 

Chairman Raggio:

What was the Governor’s reason for eliminating this account?

 

Mr. Comeaux:

Pretty much what you stated, Mr. Chairman. The Governor felt transferring this kind of funding to counties in better financial condition than the State would be ridiculous.

 

Chairman Raggio:

What is the effect of the Pollution Control funding being distributed directly in the future?

 

Mr. Ghiggeri:

We have a problem with that, also, which you will hear about this afternoon. Senate Bill 419 was not approved by the Senate. It would have provided for a $2 increase, of which $1 was going to be distributed to the counties. There will be a recommendation from staff, I believe, to increase the Pollution Control fee from $5 to $6, with one-sixth of the funding going to the counties.

 

SENATE BILL 419: Makes various changes to provisions governing Pollution Control Account administered by Department of Motor Vehicles. (BDR 40-1266)

Chairman Raggio:

I will accept a motion to add $100 each year to B/A 101‑3209 under aid to counties and close B/A 101-3209 as recommended by the subcommittee.

 

SENATOR RAWSON MOVED TO ADD $100 EACH YEAR TO B/A 101‑3209 UNDER AID TO COUNTIES AND CLOSE THE BUDGET AS RECOMMENDED BY THE SUBCOMMITTEE.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

*****

 

HR, Health Facilities Hospital Licensing – Budget Page HEALTH-34 (Volume 2)

Budget Account 101-3216

 

Mr. Atkinson:

This budget is detailed on page 14 of the packet. The budget, as recommended by the Governor, includes elimination of 17 positions from B/A 101-3216. The subcommittee expressed some concern with that, but based on assurances from the Health Division that all statutorily required activities would continue to be performed with the reduced staffing level, the subcommittee recommended B/A 101-3216 be closed with technical adjustments.

 

SENATOR RAWSON MOVED TO CLOSE B/A 101-3216 WITH TECHNICAL ADJUSTMENTS AS RECOMMENDED BY THE JOINT SUBCOMMITTEE.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

*****

 

HR, Community Health Services – Budget Page HEALTH-40 (Volume 2)

Budget Account 101-3224

 

HR, Community Health Services – Budget Page HEALTH-50 (Volume 2)

Budget Account 101-3219

 

Mr. Atkinson:

These budget accounts are detailed on pages 16 and 20 of the packet. During the budget hearings for these accounts, the Health Division proposed consolidating B/A 101-3224 and B/A 101-3219 to address concerns of a federal audit regarding the allocation of time and expense between the two accounts. In addition, the division indicated the consolidation would result in increased efficiency for both programs. The subcommittee concurred with the request of the Health Division in combining these budget accounts, and in doing so, recommended a reduction in the amount of reserve, but not the complete elimination of the reserve. The subcommittee recommended a reduction in the reserve that had typically been carried in the Family Planning budget account. The subcommittee recommended a Letter of Intent that the reserve left in the account be used for cash flow purposes only and for no other purpose without the consent of the IFC.

 

Chairman Raggio:

What number is given to the new account?

 

Mr. Atkinson:

We have blended the 101-3219 account into 101-3224.

 

SENATOR RAWSON MOVED TO APPROVE THE REQUEST OF THE HEALTH DIVISION TO CONSOLIDATE B/A 101-3224 AND B/A 101-3219 UNDER B/A 101-3224 AND CLOSE THE ACCOUNT.

 

SENATOR MATHEWS SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

HR, Immunization Program – Budget Page HEALTH-59 (Volume 2)

Budget Account 101-3213

 

Mr. Atkinson:

The funding recommended in this account continues the existing program in a series of vaccines, with increases for projected population growth. The General Fund savings noted in this account in the amount of $425,513 each year is a correction of the growth decision unit to include the funding transferred from the Nevada Check Up program in support of the Nevada Immunization Program. The subcommittee recommends a Letter of Intent from the Health Division to approach IFC if vaccine usage increases or if the annual federal direct assistance grant is not sufficient to provide the existing childhood series of immunizations. The letter would also report all proposed modifications to the current immunization program prior to implementation.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 101-3213 AS RECOMMENDED BY THE JOINT SUBCOMMITTEE.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

*****

 

HR, Special Children’s Clinic – Budget Page HEALTH-70 (Volume 2)

Budget Account 101-3208

 

Mr. Atkinson:

This budget is located on page 27 of the packet. The Executive Budget included recommendations for additional General Fund support to address the waiting lists in special children’s clinics and to combine several programs from the Division of Child and Family Services into the special children’s clinics, namely the First Step Program, the Happy program, and the Infant Enhancement Program. The General Fund savings reflected in this account are the result of efforts to maximize collections of medical services charges and increases in the Individuals with Disabilities Education Act to grant funding. With this funding, it is anticipated the waiting for the initial diagnostic appointments and for treatment services should be reduced considerably or perhaps even eliminated. The subcommittee recommends a Letter of Intent be issued to the special children’s clinics directing them to report to IFC quarterly on the status of all waiting lists.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 101-3208 BASED ON THE RECOMMENDATION BY THE JOINT SUBCOMMITTEE TO ISSUE A LETTER OF INTENT TO THE SPECIAL CHILDREN’S CLINICS DIRECTING THEM TO REPORT TO IFC QUARTERLY ON THE STATUS OF ALL WAITING LISTS.

 

SENATOR RHOADS SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

*****

 

HR, Health Alcohol & Drug Rehabilitation – Budget Page HEALTH-86 (Volume 2)

Budget Account 101-3170

 

Mr. Atkinson:

This budget is located on page 34 of the packet. The subcommittee recommended B/A 101-3170 be closed with technical adjustments. The committee should note the Governor did not recommend continuation of MAXIMUS funding to support adolescent treatment programs. Rather, the Governor recommended this activity be funded through an anticipated increase in the Substance Abuse Prevention and Treatment Block Grant because of uncertainty of how the MAXIMUS funding may be treated in regard to the maintenance of effort requirements in the block grant. The subcommittee recommends a Letter of Intent be issued to the Health Division to approach the IFC for approval to utilize MAXIMUS funding, if available, or request an allocation from the contingency fund if maintenance of effort complications arise due to the prior use of MAXIMUS funding in this account.

 

Chairman Raggio:

As I understand it, in order to meet the maintenance of effort mandate, the uncertainty of MAXIMUS funding would not be acceptable. Is that the decision reached?

 

Mr. Atkinson:

The current problem is the MAXIMUS funding, put into the program in 1999, was treated by the federal government as a one-time funding source that did not need to be continued through the maintenance-of-effort requirements. The application to consider it as one-time funding for FY 2002 and FY 2003 is currently being considered by the federal government. If they allow it as a waiver so it does not have to be included in the maintenance of effort, there would not be a problem in the account. If they say the effort must be maintained, they will need either more MAXIMUS money or an allocation.

 

SENATOR RAWSON MOVED TO CLOSE B/A 101-3170 BASED ON THE TECHNICAL ADJUSTMENTS RECOMMENDED BY THE JOINT SUBCOMMITTEE.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

*****

 

Mr. Atkinson:

The subcommittee reviewed the following budgets: Consumer Health Protection, B/A 101-3194; Communicable Disease Control, B/A 101-3220; Sexually Transmitted Disease Control, B/A 101-3215; Maternal Child Health Services, B/A 101-3222; Women, Infants, and Children Food Supplement, B/A 101-3214; Emergency Medical Services, B/A 101-3235; Public Health Tobacco Fund, B/A 263-3212; and Health Alert Network, B/A 101-3218. These budgets can be found in the closing document. The subcommittee recommended these accounts be closed as recommended by the Governor, with technical modifications.

 

In addition, the subcommittee recommended approval of the Environmental Public Health Tracking System, B/A 101-3203, located on page 40. This is a new budget account not included in the Executive Budget. It was approved in the IFC in November 2002.

 

Chairman Raggio:

If there are no objections, I will take a motion to approve all those budgets as recommended with the technical adjustments.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 101-3194, B/A 101-3220, B/A 101-3215, B/A 101-3222, B/A 101-3214, B/A 101‑3235, B/A 263‑3212, AND B/A 101-3218 WITH TECHNICAL MODIFICATIONS AND APPROVE B/A 101‑3203 BASED ON THE RECOMMENDATION BY THE JOINT SUBCOMMITTEE.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman Raggio:

We will now go to Aging Services Grants.

 

HR, Aging Services Grants – Budget Page AGING-1 (Volume 2)

Budget Account 262-3140

 

Julie Brand, Program Analyst:

The Subcommittee on K-12 and Human Services developed the following recommendations for the Aging Services Division budgets, reducing the General Fund appropriation by $1.7 million in FY 2004 and $1.1 million in FY 2005. These savings are detailed on page 7 of the closing packet (Exhibit F. Original is on file in the Research Library.).

 

The subcommittee recommends closing the Aging Services Grants budget with an increase of $1 million in tobacco settlement funds in FY 2004 over the amount in the FY 2003 work program, and a reduction of approximately $858,000 in FY 2005 over the amount in FY 2004, due to an anticipated reduction in tobacco settlement receipts for this fiscal period. The tobacco settlement funds distributed to this budget are used to assist seniors in avoiding institutional placement and to provide additional services to seniors addressed in other budget accounts. The Governor’s budget recommends funding caseload growth and ongoing programs, direct services staff, and personal assistance services in accordance with S.B. No. 174 of the 71st Legislative Session with tobacco settlement monies.

 

The subcommittee expressed concern over the continued funding of program expansion from tobacco settlement monies. However, the subcommittee concurs with the Governor’s recommendation to continue funding of direct service programs and recommends a Letter of Intent to expand ongoing services with revenue sources other than tobacco settlement funds in the future. A similar Letter of Intent was issued by the 2001 Legislature.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 262-3140 AS RECOMMENDED BY THE JOINT SUBCOMMITTEE.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

HR, Aging Older Americans Act – Budget Page AGING-5 (Volume 2)

Budget Account 101-3151

 

Ms. Brand:

This budget account is detailed on page 11 of your closing packet. The subcommittee recommends closing B/A 101-3151 by eliminating the Governor’s recommendation to fund a HIPAA privacy officer for the Aging Services Division.

 

Chairman Raggio:

While we are on the subject, there were a number of HIPAA privacy officer positions recommended in the Governor’s budget; eight, originally, and I believe they have been cut down in the overall action to what number? Can somebody tell us?

 

Mr. Ghiggeri:

I believe it was four, one or two in Medicaid, one in the Division of Child and Family Services, and I believe one in the Director’s Office. I guess there is one in Medicaid. The one in the Health Division would be cost allocated to pick up some indirect costs to fund a portion of it. It was originally eight, and I believe it has been cut to four.

 

Ms. Brand:

This recommendation to fund a HIPAA officer for the division was eliminated as approval was obtained from the subcommittee to fund the similar position in the Health Care Financing and Policy budget account. The subcommittee recommends reducing federal authority for Title III’s B, C, and D entitlements in the amount of approximately $86,000 in FY 2004 and $89,000 in FY 2005, and reducing the General Fund match in the amount of $5,000 in FY 2004 and $5,200 in FY 2005, in accordance with the March 2003 federal grant award reduction of 2 percent.

 

The subcommittee concurs with the Governor’s recommended expansion of the long-term care ombudsman program by five positions, funded by maximizing the federal Medicaid Title XIX availability and leveraging existing State General Funds. This provides for a reduction of General Funds by approximately $43,400 in FY 2004 and $14,000 in FY 2005. This is detailed in your closing document.

 

The subcommittee concurs with the Governor’s recommendation to restore funding for the Senior Ride Program contingent upon passage of S.B. 288.

 

SENATE BILL 288: Increases fees for compensable trips of taxicabs and driver’s permit to operate taxicab. (BDR 58-1251)

 

This bill was passed in the Assembly Committee on Transportation on May 9, 2003. If S.B. 288 were approved, funding for the Senior Ride Program would increase from $410,000 in FY 2003 to $577,000 in FY 2004, and a like amount in FY 2005.  

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 101-3151 AS RECOMMENDED BY THE JOINT SUBCOMMITTEE.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

*****

 

HR, Senior Services Program – Budget Page AGING-14 (Volume 2)

Budget Account 101-3146

 

Ms. Brand:

This budget account is detailed on page 15 of your closing packet. The subcommittee recommends closing the Senior Services Program budget with an increase of $3 million for the upcoming biennium from Medicaid and tobacco settlement funds provided by the Aging Grants account to fund caseload growth for the Nevada Community Home-Based Initiatives Program (CHIP). Funding would provide the resources to serve an additional 108 clients. Another $430,000 in Medicaid funding for the 2003 through 2005 biennium is recommended by the subcommittee to expand the CHIP program to serve 80 additional clients. In total, the $3.4 million increase in funding over the upcoming biennium would serve an additional 188 clients and provide for four social workers, two administrative assistants, and an accounting assistant.

 

The subcommittee recommends an expansion of the Adult Group Care Waiver Program for an additional 100 seniors funded by Medicaid. The recommendation is based on information provided by the Model Assisted Living Advisory Committee, approximately 45 slots, and the strategic plan for seniors in A.B. No. 513 of the 71st Legislative Session for approximately 58 slots.

 

The subcommittee recommends General Fund support for S.B. No. 174 of the 71st Legislative Session to provide for the personal assisted services mandate for 33 state-only CHIP clients. The recommendation provided by the subcommittee is in accordance with the proposal by the Department of Human Resources to phase in the requested number of clients for both aging and the Office of Community-Based Services (OCBS) over the first year of the biennium. Funding would be provided by the state General Fund as a reallocation from aging to the OCBS for $1.2 million.

 

Additionally, the Senior Services Program budget account would receive a transfer from the tobacco settlement budget account of $596,000 over the biennium to supplement the General Fund transfer to OCBS. Aging would serve 33 clients and OCBS would serve 30 clients by the end of the biennium.

 

The subcommittee concurs with the Governor’s recommendation to fund from Medicaid Title XIX for the addition of one medically fragile case manager to provide services in northern Nevada. Additionally, the subcommittee concurs with the Governor’s recommendation to transfer personal care assistance services under the Medicaid CHIP waiver program to the Division of Health Care Financing and Policy due to a program duplication of waiver services also provided by Medicaid. The personal care assistance services under this program will still be provided and case-managed by the Aging Services Division. However, expenditures for these services will be accounted for in the Medicaid budget account.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 101-3146 AS RECOMMENDED BY THE JOINT SUBCOMMITTEE.

 

SENATOR COFFIN SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

 

*****

 

HR, EPS/Homemaker Programs – Budget Page AGING-25 (Volume 2)

Budget Account 101-3252

 

Ms. Brand:

This budget account is detailed on page 23 of your closing packet. The subcommittee recommends continued support of the homemaker program with $496,000 in tobacco settlement monies over the next biennium. The subcommittee also recommends expansion of the Elder Protective Services program with $299,000 in Title XX funding and $78,000 in state General Funds over the next biennium. This recommendation reduces the Governor’s recommendation by 1.5 FTE. The additional funding would provide for two social workers and two administrative assistants, reducing the current caseload from 37 cases per month to 30 cases per month and increasing the number of face-to-face investigations from 50 to 90 percent.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 101-3252 AS RECOMMENDED BY THE JOINT SUBCOMMITTEE.

 

SENATOR MATHEWS SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Senior Citizens’ Property Tax Assistance – Budget Page AGING-29 (Volume 2)

Budget Account 101-2363

 

Ms. Brand:

This budget account is detailed on page 25 of your closing packet. The subcommittee recommends closing the Senior Citizens’ Property Tax Assistance budget as recommended by the Governor with technical adjustments to the General Fund by amounts projected to be carried forward from prior years and adjustments aligning the demographic growth and eligible applicants to the growth in senior population. These adjustments reduce the General Fund need by $595,000 in FY 2004 and $359,000 in FY 2005. 

 

The subcommittee also recommends reducing the General Fund by an additional $18,000 in FY 2004 and $19,000 in FY 2005 to eliminate the migration of the existing database to a Department of Information Technology SQL (structured query language) server. The subcommittee concurs with the Governor’s recommendation to fund the addition of one half-time administrative assistant III position to accommodate projected program growth. The subcommittee also recommends closing the Division for Aging Services budget accounts with technical adjustments for equipment pricing as revised by State Purchasing Division inflationary adjustments, increases in fringe benefits and increases in internal assessment.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 101-2363 AS RECOMMENDED BY THE JOINT SUBCOMMITTEE.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.) 

 

*****

 

Chairman Raggio:

Let us go to closing list No. 10.

 

Attorney General Admin Fund – Budget Page ELECTED-24 (Volume 1)

Budget Account 101-1030

 

Mr. Ferguson:

The only budget I have here today is the last remaining budget from the Office of the Attorney General, the Attorney General Admin Fund, B/A 101-1030 (Exhibit G. Original is on file in the Research Library.). The Attorney General Administration Fund receives slightly more than half of its funding from the General Fund. The remaining funding is received primarily through assessments paid by state agencies that receive legal services from the office, and the Executive Budget does not recommend any new staff for the Office of the Attorney General. In terms of the major issues, as the committee may recall, there were a number of errors and omissions in the office’s budget accounts. These related to the accurate reflection of the base year revenues expenditures.

 

As requested by the committee, staff has worked with the attorney general’s office and the budget office to determine the appropriate corrections to be made to the budget account to accurately reflect the base revenues and expenditures. The closing sheet before you reflects a number of changes having to do with items such as interest expense, B&G (building and grounds) assessments, contract services, copy machine leases, and things of this nature.

 

Chairman Raggio:

If we are not adding any positions to the budget, why is there such an increase in General Fund? It looks like 15.46 percent.

 

Mr. Ferguson:

Mr. Chairman, I believe most of that is the result of existing positions and the increase in some of the personnel assessments related to those positions. There is 221.4 FTE in the Executive Budget. I believe those positions eat up the bulk of the General Fund.

 

Chairman Raggio:

I see the adjustments result in some decrease in the recommended amount, $241,000 and $42,000, but the General Fund increase is about $1.5 million in FY 2004. What does that reflect?

 

Mr. Ferguson:

In the inflation and per-unit adjustments in Maintenance 100 (M-100), there is a significant amount. In the fringe benefit changes in M-300, there is $350,000 in FY 2004 and $383,000 in FY 2005. There are a few smaller decision units; E‑275 is the additional office space in Las Vegas, which has some of the funding. There is also some replacement computer equipment in both years of the biennium, amounting to $129,000in FY 2004 and $119,000 in FY 2005. These issues, along with increased longevity pay, increases in insurance assessments, and things along those lines, have added up to that General Fund increase.

 

SENATOR TIFFANY MOVED TO APPROVE AND CLOSE B/A 101-1030 AS RECOMMENDED BY THE GOVERNOR.

 

SENATOR RAWSON SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)

 

*****

 

Chairman Raggio:

We will go to the Indigent Accident Account, B/A 628-3245.

 

Indigent Accident Account – Budget Page ADMIN-24 (Volume 1)

Budget Account 628-3245

Ms. Brand:

This account is being reopened for an adjustment. This is the supplemental fund for Medical Assistance to Indigent Persons, which provides reimbursement to hospitals for care of indigent persons who are injured in motor vehicle accidents in Nevada. The committee should note this account is being reopened based on recent correspondence between the Nevada Association of Counties (NACO), the Department of Administration, and the Legislative Counsel Bureau (LCB) dated April 28, 2003, a copy of which is attached to the closing packet. This letter indicates the Board of Trustees of the Fund for Hospital Care to Indigent Persons voted not to levy ad valorem tax for FY 2003 and FY 2004, and to levy a $.015 tax for FY 2005.

 

As such, staff recommends adjustments to this account based on the following. The reduction of the ad valorem tax for FY 2004 pursuant to NRS 428.185, which indicates the county shall levy an ad valorem tax at a rate calculated by multiplying the tax rate at 1.5 cents on each $100 of assessed valuation and subtracting the amount of unencumbered money in the fund on May 1 of the current fiscal year. The rate is then set so the revenue from the tax does not exceed the amount calculated.

 

Adjustments, as recommended by staff and included in the closing document, are as follows: to reduce the ad valorem tax for FY 2003-2004 to zero, as noted per NACO; adjust the balance forward for FY 2004 by $14.3 million, which represents the estimated unspent balance remaining in FY 2003; and adjust the balance forward for FY 2005 by $2.2 million, which represents 0.25 of unspent collections remaining in FY 2004. Additionally, restart the tax levy for the remaining 0.75, adjusted to the Department of Taxation’s estimate of property assessed valuations as of FY 2005.

 

Upon further review by staff and the Department of Administration, it was mutually agreed a reduction in the tax levy for FY 2003-2004 appears reasonable, and a listing, for your reference, of claim payments for the indigent supplement account and the accident account for FY 2001 and FY 2002 are attached.

 

SENATOR RAWSON MOVED TO REOPEN B/A 628-3245.

 

SENATOR RHOADS SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)

 

*****

 

Chairman Raggio:

We will reopen this budget, and I will now take a motion to approve and close B/A 628-3245 with the adjustments to reduce the ad valorem tax to zero for FY 2004 and adjust the balance forward, as recommended by staff.

 

            SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 628-3245 BASED ON STAFF ADJUSTMENTS TO REDUCE THE AD VALOREM TAX TO ZERO FOR FY 2004 AND ADJUST THE BALANCE FORWARD.

 

SENATOR TIFFANY SECONDED THE MOTION.

THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)

 

*****

Chairman Raggio:

Let us move on to tourism and economic development.

 

Commission on Tourism – Budget Page TOUR&ECON-19 (Volume 2)

Budget Account 225-1522

 

Russell J. Guindon, Deputy Fiscal Analyst:

The budget on Commission on Tourism can be found on page 8 of your closing packet. The Executive Budget includes $500,000 in each year of the 2003‑2005 biennium in the Joint Research Office category. This money is for the matching funding previously approved for the V&T railroad construction project. Senate Bill No. 583 of the 71st Legislative Session requires the $1 million granted by the Commission on Tourism, but not dispersed, to remain in the account until dispersed for the railroad construction project. Staff made an adjustment to budget the full $1 million in FY 2004.

 

If the money is not expensed at the end of FY 2004, it will be balanced forward and become part of the balance forward in FY 2005, and there will be a work program to make it part of the obligated reserve in FY 2005. To better account for this item, the description has been changed to Obligated Reserve for V&T Railroad Project, relative to the Joint Research Office. This is, again, just so the budget office and fiscal staff will have a better ability to track this item. The committee should note the effect of this adjustment is to reduce the reserve by $500,000 in FY 2004.

 

The next item is in decision unit E-175; the Governor recommends a new development specialist II position in the Executive Budget. The salary, office equipment, and computer costs associated with the position are recommended to be funded by a reduction in the contract services expenses in their promotion and advertising category. The commission states the new position will primarily allow the commission to conduct a statewide visitor profile study. The commission believes the study will benefit the rural communities, allowing them to better understand their visitor demographics and better target marketing to those potential clients. The commission also stated this position will allow them to bring several projects currently contracted to an outside advertising agency in-house, in conjunction with the current development specialist.

 

I should point out they are eliminating several current contracts. The cost of these contracts would be used to fund the position as well as any contracted to be initiated to carry out the visitor profile study.

 

Chairman Raggio:

Would this be a one-time profile study?

 

Mr. Guindon:

No, my understanding is it will be a continuous event.

 

The next item is an adjustment to the room tax collections. As you know, the Commission on Tourism is funded by revenues from three-eights of 1 percent of the state room tax. The Executive Budget includes estimates of room tax collections for FY 2004 and FY 2005 developed by the commission at the end of 2002, when the Governor was putting together the recommended budget. The current work program amount in FY 2003 is approximately $11.7 million. The Commission on Tourism has provided fiscal staff information that the collections will be approximately $12 million in FY 2003. Based on the commission’s revised forecast, it is approximately $268,000 higher than the current work program amount in FY 2003, which implies the balance forward from FY 2003 to FY 2004 will increase by that amount, thus increasing the Governor’s recommended balance forward from approximately $589,000 to $857,000.

 

Staff then used this revised estimate for FY 2003 and applied the Governor’s recommended growth rate for FY 2004 of 3.5 percent and took that number and applied the Governor’s recommended growth rate for FY 2005 of 4 percent. This means room tax collections are estimated to be approximately $12.4 million in FY 2004 and $12.9 million in FY 2005. These estimates, respectively, are approximately $104,000 higher in FY 2004 and $108,000 higher in FY 2005 than those currently included in the Governor’s recommended amounts for each of those years. The net effect of adjusting for the revised room tax collections, in terms of FY 2003, FY 2004, and FY 2005, and the calculation of the effect of the balance forward, increases the reserve amount by approximately $371,000 in FY 2004, such that the FY 2004 reserve becomes $1,078,319. The impact is to increase the reserve by approximately $479,000 in FY 2005, such that the ending reserve would be approximately $1,692,498.

 

The commission has provided information the preferred reserve level would be approximately $1.3 million. This is based on the desire to maintain a reserve of approximately 1 month’s level of expenditures. Their estimate was based on the average of the first 3 months of actual expenditures in FY 2003. If the budget was approved on staff’s recommendations, total expenditures, net the reserve amount, would be approximately $12.3 million in FY 2004 and $12.4 million in FY 2005. This implies a reserve of approximately $1,030,000 would be potentially sufficient to cover 1 month’s level of expenditures. Thus, adjusting this budget for the updated room tax collection estimates would produce a reserve in FY 2004 of approximately $48,000 higher than the desired reserve of $1,030,000. In FY 2005, it would be approximately $662,000 higher than the minimum 1 month operating expenditure level.

 

The next item is the Governor’s recommendation of the transfer of room tax revenues of approximately $123,000 in FY 2004 and approximately $717,000 in FY 2005. This is a transfer from the Commission on Tourism to the Department of Cultural Affairs to provide funding for operation of the state’s three railroad museums. The Governor also recommends the transfer of approximately $716,000 in FY 2005 to the State Department of Conservation and Natural Resources to provide funding for the operation of the state parks. The committee should note these transfers from the Commission on Tourism reduce the General Fund amount required to fund the operation of the state’s railroad museums and parks.

 

The next item does not affect the closing of this budget, but I thought I would mention the federal government has approved approximately $50 million in federal grant money to be provided for the promotion of state tourism. The federal grant money, which will require a state match of either actual money or in kind, is intended to allow the State to advertise and promote in foreign markets to encourage international visitors to Nevada. The commission has indicated an application for funds has been submitted, but at this point, the details of this program are still in development. However, the director of the commission has indicated to staff it appears the intent is these funds will be allocated by the end of this calendar year. The committee should note in order to receive these funds and/or to obligate the State to a matching fund requirement, they would have to come before the IFC to seek approval.

 

Chairman Raggio:

Where would the matching money come from? Would it come from contingency funding?

 

Mr. Guindon:

One could potentially use the room tax revenues to provide matching funds. There has been some indication it could be in kind. In other words, perhaps the amount we are currently spending on the program could be used as the match for the federal money.

 

There were three technical adjustments to B/A 225-1522. The first was the amount included in the publications and periodicals expenses for purchasing overruns of the Nevada Travel Planner in each year was reduced by approximately $78,000, which results in an increase in the reserve in this budget in both years. Second is the standard adjustment to decision unit E‑710, where adjustments for revised computer prices result in a slight increase in the reserve of each year. Third is adding a slight amount to decision unit E-720 to include the Windows Office software omitted from the laptop computer recommended in the Governor’s budget.

 

Chairman Raggio:

With that explanation, we have some option as to what we do with the funding in FY 2005. Is that correct?

 

Mr. Ghiggeri:

The revenue re-projections have effectively produced additional revenue in FY 2005. Fiscal staff looked at this yesterday and has attempted to identify some one-time costs to which this funding could be applied. The committee will recall there was a combination of room tax money and General Fund dollars dedicated to the railroad car restoration project at Boulder City. The General Fund portion that remains unfunded is approximately $159,000. Additionally, State Parks has some one-time expenditures in FY 2005 to which this funding could be applied. We have attached supporting documents showing how those funds would be utilized. That would free up General Fund money that had been applied in those instances. The railroad museum and State Parks budgets have been closed in full committee. If the committee desires staff to make the adjustments, you need to so indicate.

 

Chairman Raggio:

Those are two good areas in which to reduce the General Fund. I will first take a motion to close B/A 225-1522 based on staff adjustments.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 225-1522 BASED ON STAFF ADJUSTMENTS.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)

 

*****

 

Chairman Raggio:

I will now accept a motion to reopen the Railroad Museum budget, B/A 530‑1530.

 

SENATOR RAWSON MOVED TO REOPEN THE RAILROAD MUSEUM BUDGET, B/A 530-1530.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)

 

*****

 

Chairman Raggio:

I will now accept a motion to add to the budget $158,712 in tourism funding and reduce the General Fund by the same amount.

 

SENATOR RAWSON MOVED TO ADD $158,712 IN TOURISM FUNDING TO THE RAILROAD MUSEUM BUDGET, B/A 530-1530, AND REDUCE THE GENERAL FUND BY THE SAME AMOUNT.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)

 

*****

 

Chairman Raggio:

I will accept a motion to reopen the State parks budget.

 

SENATOR RAWSON MOVED TO REOPEN THE STATE PARKS BUDGET.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)

 

*****

 

Chairman Raggio:

I will accept a motion to add a $206,425 one-time expenditure to the state parks budget and reduce the General Fund accordingly.

 

SENATOR RAWSON MOVED TO ADD A $206,425 ONE-TIME EXPENDITURE TO THE STATE PARKS BUDGET AND REDUCE THE GENERAL FUND ACCORDINGLY.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.) 

 

*****

 

Chairman Raggio:

We will now go to Nevada Magazine, B/A 530-1530.

 

Nevada Magazine – Budget Page TOUR&ECON-25 (Volume 2)

Budget Account 530-1530

 

Mr. Guindon:

You will find B/A 530-1530, Nevada Magazine, on page 11 of your closing sheet. Staff recommends closing this budget as the Governor recommends with technical adjustments. There are two issues not affecting the closing that I will bring to the committee’s attention. Decision unit M-200 recommended additional funding from advertising and subscription sales are relatively strong increases. The agency historically projects additional revenue to set goals and provide flexibility in this budget to prevent the necessity to seek approval from the IFC to adjust this budget throughout the biennium. The agency projected significant increases in these revenue categories during the 71st Legislative Session, but it was not obtained in FY 2002, and it does not appear increases will be obtained in FY 2003. I should note, as an enterprise fund agency, the actual expenditures are governed by the level of demand and revenue generated from the sale of the agency’s publications and services. They are not allowed, in a sense, to spend any more than they can obtain in revenue.

 

The other issue is the Governor recommends the transfer of room tax revenues of $125,000 in each year of the biennium from the Commission on Tourism to Nevada Magazine, and this funding is to allow Nevada Magazine to produce, in‑house, various publications and materials needed by the commission rather than contracting those to an outside vendor. The committee may note $125,000 is higher than the current $90,000 work program for FY 2003. The agency has provided staff information that this increase was due to underestimating the actual cost to produce those items.

 

SENATOR RAWSON MOVED TO APPROVE AND CLOSE B/A 530-1530 AS RECOMMENDED BY THE GOVERNOR.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Commissioner for Veterans’ Affairs – Budget Page VETERAN-1 (Volume 3)

Budget Account 101-2560

 

Mr. Guernsey:

I will cover the next two budgets. These budgets were referred to your Joint Subcommittee on Public Safety, chaired by Senator Rhoads. The subcommittee took action on the first budget, B/A 101-2560, but it was unable to take final closing action on the Veterans’ Home budget. In reference to the first budget, the Commissioner for Veterans’ Affairs, the subcommittee closed the budget recommending the addition of one new administrative assistant to help with the increasing workload in the Reno office, which currently has a staff of three, including the director. The office is charged not only with overseeing the function of the two veterans’ cemeteries in the state, but also handling client trust funds and providing considerable assistance to a number of veterans and their spouses and some active duty personnel in the state.

 

Staff, in conjunction with the agency, reviewed cemetery interment fees. With the increase in the number of veterans in the state, the agency has experienced an increase in collections; plus, the federal government increased the amount it pays for a burial from $150 to $300. Staff is recommending cemetery interment fees be increased by $10,000 a year, and the final recommendation is the technical adjustment of computer prices.

 

SENATOR RHOADS MOVED TO APPROVE AND CLOSE B/A 101-2560 AS RECOMMENDED BY THE SUBCOMMITTEE.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Veterans’ Home Account – Budget Page VETERAN-6 (Volume 3)

Budget Account 101-2561

 

Mr. Guernsey:

In reviewing the Veterans’ Home Account budget, it may be helpful to turn to page 18 of your closing packet. The spreadsheet indicates significant suggested changes in this budget. As the committee is probably aware, the agency has experienced a turnover in their administrator ranks; the administrative services officer also turned over, as well as the director of nurses. The Budget Division was in a position in which they did not have anyone to put the budget together for the 2003-2005 biennium. The budget analyst had to submit the budget that was submitted and approved by the 2001 Legislature. The subcommittee and staff have worked closely with the agency and Paul Russell in the budget office, and fortunately, they have been able to hire an experienced director out of the state of Idaho.

 

They have an administrative services officer on board, a director of nurses, and a good management team in place. In working with them, an evaluation was performed of what was needed to operate the home, looking at the revenues and staffing of the home. Significant changes are recommended. There are a number of adjustments in the revenue area. Medicaid revenue was projected too high initially, based on the assumption 80 percent of the residents would qualify for Medicaid. That has been reduced to 60 percent. Staffing, in particular, has been adjusted. The home is currently operating with only 48 of 180 beds occupied. They do not have sufficient funds to open up all three wings of the home until they receive certification from the Veterans Administration. That is a significant revenue source in support of the budget. Once that is received, they will start phasing in veterans at a rate anticipated at ten per month.

 

The revised budget was constructed anticipating an average daily census of 120 residents in FY 2004. They are anticipating, when operational, they will only be able to operate at 88 percent of maximum capacity, or 158 beds. The result of those changes has significant cost adjustments on operating and on salary costs, as we phase in the veterans through the entire first year. The director, with his experience operating homes in the state of Idaho, reviewed the facility’s staffing and believed a number of adjustments could be made in converting functions such as laundry, housekeeping, and grounds maintenance from state employees to a contract arrangement. Activity therapy will be utilized jointly with state employees and some contract.

 

The net result is the deletion of 47 positions. In order to provide adequate staffing on an around-the-clock basis, there will be an addition of eight nurses, six of whom will be registered nurses, and two Licensed practical nurses. That will provide the same staffing level we use in the mental health facilities and in staffing posts at the Department of Corrections. The agency originally submitted a budget that provided an inadequate relief factor and included considerably more overtime. Working with the agency, we used a formula in which five positions would cover a post 7 days a week, 24 hours a day. We have made adjustments in that fashion.

 

In closing the budget this morning, the Assembly Committee on Ways and Means (Ways and Means) added the General Fund back in reference to their passage of A.B. 192, which is the bill we talked about in reference to a conflict notice on S.B. 324. Ways and Means closed with the budget presented to you, but made one significant change by adding $97,569 per year in General Funds and allowing license plate revenue to flow from support of the budget into the gift account.

 

SENATOR RHOADS MOVED TO APPROVE AND CLOSE B/A 101-2561 BASED ON THE STAFF RECOMMENDATION OF NOT ADDING BACK $97,569 IN GENERAL FUNDS IN EACH YEAR OF THE NEXT BIENNIUM FOR LICENSE PLATE FEE REVENUE.

 

SENATOR CEGAVSKE SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman Raggio:

Staff, please formulate an amendment to S.B. 324 stating $97,569 in General Funds for license plate fee revenue will not be added back to B/A 101-2561 in each year of the next biennium.

Since there is no other business to come before the committee, the meeting is adjourned at 11 a.m.

 

RESPECTFULLY SUBMITTED:

 

 

                                                           

Jo Greenslate,

Committee Secretary

 

 

APPROVED BY:

 

 

 

                                                                                         

Senator William J. Raggio, Chairman

 

 

DATE: