Nevada state budget

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Nevada faced in 2009, by one estimate, the highest budget gap among the states as a percentage of its general fund ($2 billion shortfall, 30% of GF). The Nevada 2009 Legislative Session (which meets every 2 years for a 120-day maximum regular session) was marked by contention between Gov. Jim Gibbons and the Nevada State Legislature on how to close the deficit in building the FY 2010 (July 1, 2009 to June 30, 2010) and FY 2011 (July 1, 2010 to June 30, 2011) biennium budget. Gov. Gibbons recommended 6% pay cuts for state workers and teachers, a $500 million cut from higher education (36%), and accepted $220 million tax increase from the hotel room tax, approved by voters in Clark and Washoe counties.^[1] In December 2009, Gov. Gibbons requested budget cut projects of 6, 8 and 10 percent.^[2]

The Nevada Legislative leaders rejected Gov. Gibbons' plan, but did not publicly offer an alternative until late in the session after numerous "closed door" meetings up to its final unveiling in late May of 2009. The $6.86 billion, 2-year Legislative budget plan that was passed, vetoed by Gov. Gibbons, and overode by the Legislature included:^[3]

• Passing on a 4% cut of teacher salaries to school districts (which must negotiate salaries individually with the teacher unions)
• 12 furlough days for state workers (4.6% salary cut)
• 12.5% cut from higher education

Total of salary cuts and program cuts of $1 billion

• $350 million of federal stimulus money
• $781 million "temporary tax increases" scheduled to sunset in 2 years (including a state raid on property tax revenues from Clark and Washoe counties)
  • Business Payroll Tax up $346 million
  • Sales Tax increase $280 million
  • Vehicle Registration up $94 million
  • Doubling of Business License Fee $61 million
• Gov. Gibbons vetoed a total of 41 bills (budget and non-budget) during the 2009 Session of which the Legislature overode 25.

Nevada relies heavily on gaming income for state revenue; 53% of the state's gambling income comes from the Las Vegas Strip. November 2009's state gaming report for September 2009 showed 21 consecutive months of declines. Nevada News Bureau reports, "State Budget Director Andrew Clinger had no real comment on the gaming report, saying other tax reports due by the end of the month, including taxable sales, will be examined before a decision is made on whether a special session of the Legislature is needed to keep the current budget in balance. 'We'll just have to see when the revenues come in at the end of November where we're at,' he said. Not only are many of the state's tax revenues coming in lower than projected, but the spending side of the budget is also an issue, Clinger said. Medicaid spending is much higher than budgeted, which he said is a greater concern than the revenue side of the equation."^[4]

[edit] Budget Background

The approved Nevada GF FY 2008 and FY 2009 biennium budget was $6.8 billion, but actual spending was $6.3 billion due to cuts made as revenue declined.^[5] Nevada does not have a state income tax. 33% of GF revenue for the FY 2008 and FY 2009 biennium came from sales tax and 27.5% from gaming taxes. Actual collections in August 2009 were down in total $25.8 million (6.9%); sales taxes were down 8.1% and gaming collections a negative 4.7%.^[6]

Nevada’s Constitution requires that the state have a balanced budget and not deficit spend. Individual state agencies submit their budget requests along with past expenditures and revenue to the Governor who proceeds to issue a budget recommendation for the upcoming fiscal year to the Legislature. Both the State Assembly and the Senate are required to make any necessary changes or adjustments to the budget until the bill is passed in both houses.^[7]

• The General Fund is a significant source of revenue for the state, accounting for 37 percent of total projected revenue. Federal funds account for almost one quarter, 21 percent, of the state’s projected revenues. Other revenue encompasses a variety of items from private gifts and donations to various fees, assessments, and taxes. ^[7]

Regular sessions of the Legislature begin the first Monday in February of odd-numbered years. Nevada is one of only six states that have true biennial sessions. From 1961 through 1997, the length of legislative sessions in Nevada depended upon the time required to process proposed legislation, review the spending proposals of state agencies, and adopt a biennial state budget. Some sessions lasted as long as 169 days. At the 1998 General Election, Nevada voters approved a constitutional amendment limiting future regular biennial sessions to 120 days. The amendment also requires the governor to submit the executive budget to the Legislature two weeks before the start of session.^[8] Bills that have a tax or fee increase require a 2/3 majority vote (14 in the Senate and 28 in Assembly) to pass.^[9]

[edit] Budget figures

The following table provides a history of Nevada's expenditures and gross domestic product (GDP).

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
• See Nevada state budget (2008-2009) for more details.

[edit] Accounting Principles

The Legislative Auditor for the Nevada Legislative Counsel Bureau, Audit Division audits Nevada's state agencies and publishes audit reports online. Paul Townsend is Legislative Auditor. The Legislative Auditor is a statutory officer appointed by the Director of the Legislative Counsel Bureau with the approval of the Legislative Commission for an indefinite term whose qualifications and duties are defined by law. The Legislative Auditor serves as staff to the Nevada Legislature and its various committees, and is the chief of the Audit Division.^[11]

The Institute for Truth in Accounting (IFTA) rates Nevada “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Nevada's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[12] Nevada's CAFRs are prepared and published online by the Nevada State Controller's Office.

Kim Wallin was elected Nevada's State Controller in November of 2006.^[13] The Nevada State Controller is one of the six constitutional officers of the state and is elected to a term of four years. The Controller is the chief fiscal officer charged with administering the state accounting system and the state's debt collection program under the Nevada Constitution Article 5, Section 19.^[14]

[edit] Accounting transparency checklist

Comprehensive Balanced budget Timeliness Usability

[edit] The good

• The website has Comprehensive Annual Financial Reports (CAFR) dating back to 1998.^[16]
• An independent auditor’s report is published on page 10 of the document.^[17]
• It provides supplements to the budget workup, starting on page 84.
• The budget is posted using organized and consistent methods of financial reporting.
• Nevada law requires a balanced budget and a deficit is forbidden.^[18]
• It includes all costs incurred by the government, including long-term liabilities, starting on page 14 of the document.^[17]
• The CAFR compares estimated and actual budgetary numbers, such as on page 108 of the document.^[17]
• The Nevada office was timely in submitting the budget.

[edit] The bad

• The CAFR is posted in a PDF format, so it’s not searchable online.

[edit] Economic Stimulus Package

Nevada is expected to receive $1.5 billion from the $787 billion dollar economic stimulus. ^[19] All told, the federal stimulus plan would create or save 34,000 jobs in Nevada, based on White House estimates. ^[20] However, like some Governors, Gov. Gibbons said that he would not accept $77 million in unemployment funds because it would require an expansion of coverage to some people not previously eligible. Additionally the Governor added that he felt taking the money would be a threat to the state’s sovereignty. But, in March 25,2009 Gibbons decided to accept the funds.^[21] Gibbons was quoted in The New York Times saying:

"We have the responsibility to do everything we can to help our unemployed workers get through these difficult times, even if that means passing legislation that we would not necessarily approve during prosperous times."^[21]

For more information on how the federal stimulus funds are being used in the state of Nevada, visit the state recovery website.

According to preliminary reports Nevada is expected to receive:

• $84 million towards Medicaid ^[22]
• $77 million for unemployment ^[21]
• $201 million for road construction ^[23]
• $32 million to fund energy efficiency improvement projects ^[24]

[edit] Budget transparency

Nevada Open Government is the website which hosts the state's searchable online database of financial data. The site was created by Governor Jim Gibbons's executive order, and became functional on January 15th, 2009.

[edit] Website evaluation

Budget Usability Elected Officials Administrative Officials Ethics Audits Contracts Lobbying Public records Taxes

Nv.gov is the website for the state of Nevada.

• Main article: Evaluation of state websites

[edit] The good

• Site has a search function and is fairly easy to navigate.
• Budget is published.^[25]
• Elected officials are listed with contact information.^[26]
• Administrative officials are listed with contact information in a searchable database.^[27]
• State tax information is available.^[28]
• Annual financial audits are published.^[29]
• Includes information on state ethics commission.^[30]
• Current state contracts are available.^[31]

[edit] The bad

• Does not provide information on lobbying.
• No information on how to make public records requests under the Nevada Open Records Act.

[edit] Legislation

• Nevada Executive Order Requiring Transparency and Accountability in Government Finances, Contracts and Grants (2008)

[edit] Government tools

Nevada Open Government is a Website where records of Nevada state spending are made available. Currently, the site is limited in the scope of information it contains. As more funds become available, it is anticipated that more government spending data will be placed online.

The following table is helpful in evaluating the level of transparency provided by a state spending database:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
Nevada Open Government

[edit] Limitations and Suggestions

As the table above notes, the site lacks information on grants, contracts, and state employee salaries.

[edit] Economic Stimulus Transparency

• The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[32]

• Nevada will receive an estimated $1,052,020,435 ^[33]

• The economic recovery website to show how legislators and government officials in Nevada are spending Federal funds is available here.

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[34][35]

Nevada has only 3 congressional districts, however, the non-existent 32nd District collected more than $6.3 million and produced only 12 jobs, according to ARRP's website. A total of $14,038,524 went to non-existent Congressional Districts to "create/save" 18 jobs.^[36]

[edit] Independent transparency sites

The Nevada Policy Research Institute developed its own transparency website, TransparentNevada.com.^[37] This site will focus primarily on local transparency, complementing the state's site, which focuses primarily on state spending transparency.

[edit] Public employee salary information

TransparentNevada.com, a project of the Nevada Policy Research Institute,^[38] has made Nevada salary data available here.

[edit] See Also

Nevada taxpayer-funded lobbying

[edit] External links

[edit] Additional reading

• State of Nevada,"Major General Fund Revenues," April 7,2009

[edit] References

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	v • d • e State of Nevada Carson City (capital)
Transparency	Open Records Act | Transparency Checklist | Government corruption reports | Transparency Legislation | Open Records procedures | Transparency Advocates | Transparency blogs | State budget | Taxpayer-funded lobbying associations |
Divisions	State | List of Counties | List of Cities | List of School Districts | Evaluation of county websites | Evaluation of city websites | Evaluation of school district websites |
Government	Nevada State Constitution | Executive | House of Representatives | Senate |
Judiciary	Nevada Supreme Court | Supreme Court elections | Commission on Judicial Discipline | Judicial Nominating Commission | Judicial news | Judicial activist organizations |
Ballot Measures	2008 ballot measures | List of ballot measures | School bond issues | Procedures for qualifying an initiative | Amending the constitution | History of direct democracy | Campaign finance requirements |