Released Monday, the executive budget seeks to return the state to within 1 percent of 2007 spending levels over the next biennium.
In addition to $1.6 billion in cuts, officials are using about $1 billion in what they call “revenue
reallocations” to balance the budget. Moreover, a 5 percent reduction in employee salaries and several million dollars in agency consolidation savings help cover the revenue shortfall.
In keeping with Sandoval’s promise, no new taxes are included in the budget.
But the process of approving a budget for the 2012 and 2013 fiscal years is only beginning. The state Legislature will start the debate on it Feb. 7.
The governor’s proposed budget is working with an estimated $5.33 billion in revenue, as projected by Nevada’s Economic Forum. To meet this figure, the state is pushing down services to the county and municipal government level, something Sandoval acknowledged in a statement will draw vigorous debate.
Cuts to education and health care services come at a time when demand and caseloads have increased, making it necessary for officials to get creative in limiting funding reductions, particularly when faced with significant losses in property and sales tax revenues.
Removing statutory requirements for how local governments operate various education programs makes funding for early childhood education, gifted and talented units and other programs optional. In addition, continuing a 9 percent property tax allocation from Clark and Washoe Counties to support funding of the state’s university system has been proposed.
Still, a 5.2 percent reduction in per pupil funding for K-12 education is likely coming down the line.
Dramatic increases in Medicaid and unemployment recipients have driven up the cost of funding the state’s Department of Health and Human Services (DHHS), resulting in major cuts in mental health, welfare and child and family services.
But $119 million in proposed general fund cuts to the DHHS have not been made. Autism, hospice, physical therapy and other services have been restored as a result.
“The budget is very good given the conditions,” said DHHS director Mike Willden during a media briefing Monday.
Calls for economic development funding have been met with an allocation of $15 million for the recruitment of new businesses to Nevada and $10 million for Silver State Works, a new program aimed at getting many of Nevada’s unemployed back to work. The governor’s overall general fund budget eliminates 824 positions with a high-end potential of 364 layoffs, including 96 within the DHHS.
Officials said the funding proposals reflect an arduous undertaking to overhaul the entire budget process, with a new emphasis placed on priority and performance of state services.
“We’ve spent more time putting this budget together than any other I’ve worked on,” budget director Andrew Clinger said.
The governor’s recommended budget can be found online at www.nevadaspending.com.