Governor: State worker furloughs will end

Gov. Steve Sisolak’s staff Monday laid out a General Fund budget $187 million smaller than the 2019 executive budget.

But the $8.69 billion General Fund spending plan is significantly more than Sisolak and his executive staff originally thought they would have to spend for the 2022-23 biennium.

The good news was December revenues were higher than projected and there was an increase in federal cash. The result, a reduction in spending of just 2 percent in General Fund cash.

Chief of Staff Michelle White said, however, the budget is effectively a snapshot in time based on current information. She described it as “a budget that reflects the moment in time.” She made it clear that could change.

But because of increases in federal stimulus funding, White said the total budget including federal, fee and other funding, will be $27.1 billion for the coming biennium, an increase of $1.3 billion.

The budget also empties out the state’s rainy day fund

White said one note for the 25,000 state workers is that the unpaid furloughs ordered when the economic crunch hit last spring will end in Sisolak’s proposed executive budget.

In addition, she said retirement contribution premiums won’t be increased in the coming budget, also good news for state workers.

The budget includes $342 million in supplemental appropriations, nearly all of it — $331 million — to cover the salaries of teachers that is mandated by state law.

•••

The proposed budget does include restoration of the 6 percent rate cut for Medicaid and restoration of the payment rate for neonatal intensive care units.

Medicaid enrollment rose 18.7 percent during the pandemic, far higher than projected, and is expected to increase another 2.2 percent in the coming biennium. By the end of the coming two-year cycle, experts said one in four Nevadans will be on Medicaid, a total of some 778,000 people. Sisolak’s budget calls for $15.2 billion in state and federal funds for the Department of Health and Human Services. That is a $2.6 billion increase from the current budget.

•••

The budget proposes $7 billion in education spending from 2021 to 2023, using a combination of local, state and federal funds. The total is $130 million less than the 2019-2021 budget. The state plans to decrease the amount it allocates from its general fund to higher education by $80 million and will rely on more than $450 million in federal aid that the federal government earmarked for education in December 2020. The budget also proposes delaying changes to the K-12 education funding formula until the 2023-2025 budget cycle to reduce expenditures. The budget assumes K-12 enrollment will remain flat.

•••

White said the spending plan includes funding to restore construction of the UNLV engineering college building at a cost of $36.8 million and another $25 million to complete construction of the UNLV medical school.

Those expenditures are part of the $415.9 million in capital improvement projects, the majority of which will be paid from state general obligation bonds.

White said part of the problem is that they don’t yet have guidance from the federal government on how they will be able to use the money in the stimulus package signed into law in December.

"The governor's approach was, 'We don't have a cushion. We can't get this wrong.' So we're going to use the amounts we have in front of us and hopefully augment and supplement as we go," White said.

White said the proposed executive budget does not include any increased taxes or other levies. But she did not say no such increases would be proposed to the coming legislative session.

The Associated Press contributed to this report.