Sandoval unveils budget Tuesday
January 16, 2017
Gov. Brian Sandoval will unveil his proposed budget for the upcoming biennium in his State of the State speech Tuesday evening.
In addition to the budget, Sandoval will reveal any new initiatives and programs he wants lawmakers to consider. But those will also be evaluated in terms of their cost.
He has a total of $7.89 billion in General Fund cash to work with over the biennium. But that's just one piece of the state budget that includes huge amounts of federal money, highway fund and "other" resources. This cycle, the biennial budget totaled $23.77 billion, an amount expected to increase by more than $1 billion for 2018-19.
There have been the usual spate of rumors about what the spending plan contains but, like his predecessors, Sandoval and his top staff have been silent about the details.
He has promised to include a funding stream for the so-called Educational Savings Accounts — school vouchers program. Whether or not that program will survive a Democrat-controlled Legislature, however, is in serious doubt.
He did give out one other tidbit in an informal Q-and-A following last week's Board of Examiners meeting: The proposed budget doesn't contain reductions to state workers that were imposed when the recession hit eight years ago.
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Sandoval's budget instructions mandating agencies prepare for 5 percent reductions in spending last summer set off alarm bells in the minds of many state workers since the bulk of state spending goes to pay salaries of workers that provide the public with services.
Since Sandoval's gloomy call for up to 5 percent spending cuts, continuing economic recovery has brightened the budget picture quite a bit, leading the Economic Forum that sets the amount of available General Fund revenues to give the governor and lawmakers $541.3 million more than they had in the current biennium.
In addition to the increase approved by the forum, the state expects to finish this cycle with an ending fund balance of about $400 million —at least part of which is a potentially tempting target for one-time expenditures.
A good share of the additional cash, however, will be consumed by caseload growth in K-12 schools and Medicaid.
Sandoval's Chief of Staff Mike Willden said Medicaid alone will require $60 million more in state funding in 2018 and $88 million more in 2019. The growing K-12 population will require the state to add about $48 million more in 2018 and $91 million in 2019.
Since passage of the Affordable Care Act, Medicaid has become the state's largest single budget, totaling $6.4 billion this biennium (albeit nearly two-thirds federal money). That raises the question Sandoval's recommended budget can't answer: what will happen if Congress and the new president repeal Obamacare, specifically whether the actions they take dump more costs on the states. Most at risk are the hospitals charged with providing indigent care — primarily University Medical Center in Las Vegas and Renown in Reno.
Like the public schools, Nevada's higher education system is growing. Covering the cost of rising student numbers will require about $30 million more each year of the coming biennium. If the state doesn't cover those costs, more of the burden will shift to the students, a pattern that has dramatically increased the per-credit costs and myriad fees students must pay over the past eight years.
Beyond that, there have been recurrent rumors Sandoval wants to put money into the university system in much the same way he did for K-12 education in the 2015 session. Observers say they expect the budget to pump more cash into the UNLV Medical School project that was created at the end of the 2015 session. Southern Nevada lawmakers met last summer and declared funding for that school their top priority.
Nevada's community colleges are also seeking a cash infusion arguing they can't meet the challenges of training workers for the high-tech jobs offered by such firms as Tesla without more funding. Through the recession, they suffered deeper cuts than the university campuses. Whether the budget plan includes a boost to Western Nevada College in Carson City, Truckee Meadows Community College in Reno and Great Basin College in Elko remains to be seen.