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What's in Gov. Sandoval's Budget?

Nevada Gov. Brian Sandoval delivers his first State of the State address.
Brandon Rittiman/KUNR
Nevada Gov. Brian Sandoval delivers his first State of the State address.

Governor Sandoval's first State of the State address is important, but more important than his words are the budget proposals behind them. The Governor uses some creative measures to offset cuts he otherwise would have made to education and Health & Human Services. Still, the bottom line is that Gov. Sandoval's proposal reduces state spending to roughly the same level it was in 2007. He's proposed a general fund budget that's more than six percent smaller than the current 2-year budget. Below, we highlight many of the major proposals in the Governor's proposed budget. The entire thing is available online for you to thumb through. (click here - may not be available until after the Governor's speech.) STATE PAY CUTS / LAYOFFS Not including education workers, the Governor intends to significantly shrink state government by eliminating 824 state jobs. Of those, 361 jobs are currently filled. But if their jobs are cut, the state would attempt to place as many of those workers as possible in vacant jobs elsewhere within the state system. The Governor's recommended budget includes a proposed salary freeze and 5% pay cut to all 24,000 state workers. The Legislature and Governor do not have the authority to enact that pay cut for educators. Teachers negotiate contracts directly with the school districts. And the Board of Regents controls pay for college faculty. The state can, however, cut education funding and suggest educators take pay cuts. That's what the Governor is doing. Pay cuts would replace the 4.6% reduction state employees currently take as a furlough (unpaid time off.) This is meant to improve productivity in state offices, but it also allows the cut in pay to be applied to the workers' retirement plans. HITTING LOCAL GOVERNMENT The budget proposal continues a recent trend of hitting local governments for cash. In all, this budget shuffles $267 million of the problem down to the county level. Currently, the state is making a temporary diversion of property tax from Washoe and Clark Counties into the general fund. It's 9 cents per every $100 of appraised value- and it's set to expire in July. But Gov. Sandoval proposes making that tax diversion permanent. Also, instead of going into the general fund, it would go to higher education, with the mandate that the money go to colleges and universities in the county the tax money comes from. The state would also bill counties for a host of health and human services functions, as well as cut support for others. Counties could then decide whether to keep them. In addition, the state would drain the counties' indigent accident funds. That hits hospitals by not reimbursing them for caring for people who can't pay. MERGING AGENCIES 19 state agencies would be affected by mergers or reorganization, saving $5.7 million. Sandoval proposes eliminating the Department of Cultural Affairs. Its four divisions will be kept and moved. State Museums and the Arts Council would be moved to the Nevada Commission on Tourism under the Lieutenant Governor. The Governor's staff says this will allow all existing museums to remain open, though they may have further reduced hours. Libraries and Archives would become part of the Administration's IT department. Historic Preservation and the Comstock Historic District would move to the Department of Conservation and Natural resources. Other highlights include merging personnel services for a slough of agencies into one office. EDUCATION: SHIFTING THE BUCK The Governor's budget makes some massive changes to how we pay for education. The 9-cent property tax allows for $121 million less to be spent on higher education from the general fund. Another proposal does even more. The governor wants to spend less from the general fund on K-12 schools by giving school districts money that they already have. 12 school districts are paying back bond measures for buildings and other purposes. State law requires them to have a year's worth of repayment sitting in the bank to keep them solvent. The governor proposes scaling that back to just 6 months, which is what the state does for its own bonds. That would allow districts to transfer $425 million from their savings accounts to their regular operating budgets. But is can only be done once, and next legislative session, we'd need nearly half a billion dollars more from somewhere to make the school districts whole. The proposal also sets aside room tax money that's meant to for education enhancements, allowing it to pay for regular school operations. HEALTH AND HUMAN SERVICES: MORE CREATIVE FINANCE The Governor's budget spares several HHS programs from the chopping block, including autism services, personal care assistants, and help for victims of traumatic brain injury. It does this by taking out a loan against against future tax income the state would otherwise get. Sandoval wants to monetize the Insurance Premium Tax, with repayments of $50 million per year. In order to save some HHS programs for the next two years, the state will give up $100 each biennium through 2017. But Sandoval's budget still makes serious HHS cuts. It aims to eliminate a slew of mental health services, and other programs like property tax assistance for seniors, which currently helps 17,000 people. HHS Director Mike Willden says he will lobby lawmakers to undo some of the proposed cuts, especially in mental health and in compensation rates to caregivers. THE ROAD AHEAD The Governor's staff promises you'll see him at the negotiating table. The 120-day legislative session begins February 7. Much of the negotiating will happen out of the public eye, behind closed doors. We don't know how much ground the Republican Governor will give to the Democrat-controlled legislature. But we do know if the Democrats want to go around the Governor, they'll need to get more GOP lawmakers on board than last time to come up with the two-thirds majority needed for a veto override.