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Nevada state administrators get budget details in all-day planning session

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By Sean Whaley, Nevada News Bureau: Nevada’s top state administrators gathered together in meeting rooms and via the internet today to hear first-hand about Gov. Brian Sandoval’s initial plans for his 2013-15 budget.

The all-day meeting called “Budget Kickoff” was intended to provide instructions to state administrators on how to begin preparing their spending plans for the new two-year budget that will take effect on July 1, 2013.

State administrators were briefed today on the 2013-15 budget plan. / Photo: Nevada News Bureau.

Agencies are expected to see flat budgets compared to the current spending plan after Sandoval surprised many around the state on Tuesday by announcing he would extend an expiring package of tax increases into the next budget cycle to avoid any further cuts to education and critical social services.

In announcing his intentions, Sandoval said: “I’m not going to pit kindergartners against senior citizens. I’m not going to pit higher ed students against people that need essential services.”

Agencies are also being directed to prepare their spending proposals using the new Priorities and Performance Based Budgeting process required as a result of legislation approved in the 2011 legislative session.

While the next budget won’t take effect for more than 15 months, the planning process begins early. Sandoval must submit his proposed budget to the Legislature by January 2013 in advance of the February 2013 legislative session.

“You know how difficult the last couple of sessions have been, and you understand the depth and the breadth of the cuts to state spending,” said Heidi Gansert, Sandoval’s chief of staff, in introductory remarks to the assembled administrators. “You’ve also heard about the positive economic news in recent months. Sales tax collections are up. Gaming revenues are improving. Unemployment is slowly declining. All signs that Nevada’s economy is turning the corner.”

But Medicaid caseloads have tripled over the past decade and new costs are looming due to mandates from the federal health care law, she said. The ballot proposals being circulated to raise taxes are not an option as far as Sandoval is concerned, Gansert said.

By continuing the sunsetting taxes, no Nevadans will pay any more in taxes in the next budget than they are now, she said.

“The governor has said we will grow our way out of this recession and we will, it’s just going to take more time,” Gansert said.

She had some good news for state employees, noting that the unpaid furloughs, 2.5 percent salary reductions, frozen merit pay increases and the elimination of longevity pay are all under review for the next budget for restoration if possible.

Janet Rogers, an economist with the Budget Division, said the national economy is improving, but slowly, and Nevada is lagging behind.

State Budget Office economist Janet Rogers talks about the economy as Budget Director Jeff Mohlenkamp looks on. / Photo: Nevada News Bureau.

“In the train that represents the national economy, Nevada is the caboose,” she said. “During the recession, for those of you who have been here, know, we had the largest employment drop of any state, the highest unemployment rate, the highest foreclosure rate and we were the last state to enter the recovery.”

State Budget Director Jeff Mohlenkamp talked about the potential impacts of the health care reform law, saying it will have a significant effect on the state’s Medicaid population.

The federal government is expected to pick up the costs of Medicaid recipients eligible under the law, but an influx of enrollees among residents who are already eligible for the health insurance program for low income, disabled and senior citizens is also expected, and these costs will have to be covered in part by the state, he said.

Nevada’s Medicaid caseload has increased from an average of 117,627 recipients in fiscal year 2001 to 285,732 in fiscal year 2011.

“Now the overall impacts of the health care reform aren’t clear,” Mohlenkamp said. “We don’t know what the number is going to be but we do know it’s significant, and we’ve done some broad estimations in our budget preparation.”

Audio clips:

Sandoval Chief of Staff Heidi Gansert says the Nevada economy is improving:

031512Gansert1 :23 turning the corner.”

But Gansert says it will take more time to grow out of the recession:

031512Gansert2 :06 take more time.”

Budget Office economist Janet Rogers calls Nevada the caboose on the national economic recovery train:

031512Rogers :22 enter the recovery.”

State Budget Director Jeff Mohlenkamp says the new health care law will have big impacts on Nevada’s Medicaid program:

031512Mohlenkamp :11 our budget preparation.”

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