Nevada state budget

Nevada operates on a biennial budget cycle, with each fiscal year beginning on July 1.^[1]

The $17.9 billion budget state budget for FY2012-13, the current biennium, is comprised of five different bills. In the budget, $6.2 billion in funds come from state general tax dollars and federal funds.^[2] The enacted budget can be found here.

Nevada has a total state debt of approximately $40,711,818,000 when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the FY2013 state budget gap.^[3] The FY2013 state debt total is down from the FY2012 state debt total of $41,883,947,000.^[4]

Nevada's total state debt per capita is $14,949.32.^[5]

See also: The Nevada State Budget on State Budget Solutions

Economic Freedom

A new Fraser Institute report on economic freedom ranks Nevada 3rd in economic Freedom. Delaware ranks 1st and New Mexico ranks 50th. The study examines the impact of economic freedom on both the level of economic activity and the growth of economic activity. According to the study, the freest economies operate with minimal government interference, relying upon personal choice and markets to answer basic economic questions. More governmental restrictions on those choices curbs economic freedom. The study looks at three major categories per state – size of government, taxes and regulations. ^[6]

Federal Aid to State Budget

The chart below represents how much of the state’s budget comes from the federal government. The number is the corresponding ranking in relation to the rest of the nation (if #1, the state receives the highest percentage of federal funding in the nation):

Figures are calculated by dividing each state’s intergovernmental revenue into its general revenue. Data is available at in U.S. Census.

FY2012-13 State Budget

• See past state budgets

The Legislature passed five budget bills that fund state government and education for FY2012-13 on June 5, 2011, the next to the last day of the regular session.^[7] Governor Brian Sandoval signed the budget on June 14, 2011.^[2] A summary of the budget as prepared by the state can be found here. Assembly Bill 579 provides funding for schools; Assembly Bill 580 contains appropriations for the general fund; Senate Bill 503 authorizes expenditures; Senate Bill 504 funds capital improvements; and Senate Bill 505 provides state funds to pay bills.

Unemployment Insurance

Nevada borrowed about $773 million from the federal government to pay jobless benefits. The interest payments on the loans will come from the state's general fund.^[8]

Interim Funding

At the end of August 2011, the Interim Finance Committee, which functions within the Legislative Counsel Bureau between sessions and administers a contingency fund, met and approved more than 100 requests for funds from nearly every state agency. Interim Finance Committee members expressed concern that issues before the committee in August should have been previously resolved during the budgeting process.^[9]

Revenue

In FY2012, the state transferred $97.4 million from the Unclaimed Property Division to the general fund, the largest such transfer from the Unclaimed Property Division in state history. Property that is unclaimed for three years is transferred to the general fund.^[10]

The state faces loss of revenue for a myriad of reasons, including:^[11]

• Tax revenues coming in far below the levels seen in prior boom years;
• loss of one-time federal stimulus funds;
• The expiration on June 30, 2011, of approximately $1 billion in temporary tax increases approved by the 2009 Legislature;
• End of employee furloughs and restoration of employee benefits that were cut in 2009 to balance the current budget, which together would cost about $500 million

State Budget Director Andrew Clinger said that the state would be $1 billion short, but that figure does not include the $1.1 billion in lost stimulus funds or $200 million in additional Medicaid costs. The total requests from agencies — yes, they can be pared — put the shortfall before any cuts or furloughs at $3 billion.^[12]

Gov. Sandoval said that his fiscal priorities are human services and education.^[13] He said he will take a salary cut as part of the "shared sacrifice" necessitated by the state's fiscal condition.^[13] In addition to cutting his own pay, he said that he wants state workers to give up 5% of their pay.^[14] The governor suffered a blow when a Nevada State Supreme Court ruling raised legal issues on some funding tactics totaling about $656 million, which threw the budget process into chaos. The ruling opposed lifting the sunsets on the taxes, which the governor had relied on to avoid new taxes. The court found that it was unconstitutional for the state to sweep $62 million from a southern Nevada clean water fund in 2010 to help pad revenues and close an $805 million deficit. While the decision focused on that money grab, it called into question Sandoval's plan to take school bond reserve accounts and some property taxes from Clark and Washoe counties to help balance his budget.^[15]

Education

The governor proposes cutting education spending by $200 million, approximately 9%. All of the Assembly's Republicans backed the governor's proposed $2.2 billion public school spending plan, while all Democrats oppose the plan.^[16]

On May 16, 2011, the governor vetoed Assembly Bill 568, the bill funding K-12 education for 2011-13, because of the funding Democrats added back into those budgets.^[17] The funding added by Democrats increases state spending by nearly $660 million above the amount proposed in the Executive Budget and the governor said that the state would not have the funds to pay for the bill and all other government sevices if he had signed it. Democrats do not have the votes needed to override the governor's veto, sending the budget battle back to square one with three weeks left in the 2011 session that ends June 6.^[18]

Agency budget requests

State agencies submitted their budget requests for the coming biennium in October 2010 and they totalled $8.3 billion, almost $2 billion more than the general fund budget approved by the 2009 Legislature.^[19]

Public schools requested a 32% increase, upping their share of the total general fund from $2.5 billion this budget cycle to $3.3 billion, as the university system seeks a 25% increase from $954 million to $1.19 billion. Health and Human Services requested that their budget increase from $1.8 billion to $2.4 billion, an increase of 32.75%.^[19]

Revenues

Any tax increase or continuation would require a two-thirds vote in each house of the Legislature.^[11]

General Fund revenue collections are $37.99 million ahead of the forecasts used to build the state budget, according to reports presented to the Economic Forum on Dec. 13, 2011.^[20]

Board of Regents

The Nevada Board of Regents adopted its 2011-13 operating budget without the 10% budget cuts requested by the governor. The Board did, however, promise to make the necessary cuts once lawmakers determine set amount to be cut.^[21]

Collective Bargaining

Gov. Sandoval said that he does not support a bill to eliminate collective bargaining in local government as proposed by his predecessor Gov. Jim Gibbons.^[22]

Budget transparency

• See sample transparency legislation at the Sunshine Standard

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.

Government tools

Nevada Open Government is a Website where records of Nevada state spending are made available. The site provides line item expenditures navigable by fiscal year and agency. Budget documents are also available.

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	Y	N	N	Y	Y	N

See also: Evaluation of Nevada state website

Limitations and Suggestions

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

Independent transparency sites

The Nevada Policy Research Institute developed its own transparency website, TransparentNevada.com.^[23] This site will focus primarily on local transparency, complementing the state's site, which focuses primarily on state spending transparency.

Public employee salary information

See also: Nebraska state government salary

TransparentNevada.com, a project of the Nevada Policy Research Institute,^[24] has made Nevada salary data available here.

Multi-Measure Budget Transparency Profile

The Institute of Government and Public Affairs at the University of Illinois has created a multi-measure transparency profile for Nevada, which measures state transparency as of September 2011 using indicators from a range of organizations, including Sunshine Review. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.

Budget Background

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.^[25]

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.^[26] Bills that have a tax or fee increase require a 2/3 majority vote (14 in the Senate and 28 in Assembly) to pass.^[27]

• 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. ^[25]

2009-11 Budget Expenditures

Statewide Revenue Summary by Funding Source 2009-11^[28]

Statewide Expenditure Summary by Function 2009-11^[29]

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.^[30]

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.^[31] 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.^[32] 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.^[33]

Moody's downgraded the state from Aa1 to Aa2 in 2011, citing two-thirds supermajority required to raise taxes as a negative in Nevada.^[35]

Stimulus

Nevada has received $1.2 billion in federal funding from the American Recovery and Reinvestment Act of 2009.^[36]

The state also received approximately $160 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[37]

Public Employees

According to 2008 Census data, the state of Nevada and local governments in the state employed a total of 135,957 people.^[38] Of those employees, 99,394 were full-time employees receiving a net pay of $486,419,550 per month and 36,563 were part-time employees paid $43,648,875 per month.^[38] More than 52% of those employees, or 71,451 employees, were in education or higher education.^[38]

See Also

• Nevada government sector lobbying
• Nevada public pensions

External links

Additional reading

• Gov. Jim Gibbons,"Governor Presents Plan to Reduce Spending," February 16, 2001
• State of Nevada,"Major General Fund Revenues," April 7,2009

References

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