Sunday, Jan. 11, 2009 | 2 a.m.
SLASHING A THIRD
Gov. Jim Gibbons and the Legislature will craft a budget in the next 120-day session that will affect the state for the next two years. Without new taxes, the state must cut 34 percent out of a bare-bones budget.
WHAT WE’LL LOSE
In the past year, $311 million was cut from services that affect the neediest Nevadans especially. That includes Medicaid reimbursements, forcing some specialists to reduce care for needy children.
MORE OF THE SAME
With budget cuts to schools, universities and in economic development, Nevada’s economy will remain one dimensional, tied to the boom and bust of gaming and tourism.
- Schools could cut teachers, athletic programs (1-9-2009)
- Teacher salaries in Gibbons’ cross hairs (1-9-2009)
- State should pay for defense of the poor, panel finds (1-8-2009)
- Home News Editorial: Nevada must demand health care reform (1-8-2009)
- State’s shortfall prompts Henderson budget concerns (1-6-2009)
- Gibbons shuns sessions on budget (1-4-2009)
Not since legalizing gambling or cleaning the Mob out of town has Nevada faced such a profound choice about its future — indeed, about its own identity.
The question, simply stated: What kind of state does Nevada want to be? ¶ At the moment, Nevada has delivered unprecedented prosperity to both a wealthy elite and average workers on the Strip and beyond, but the broader community is in sorry condition. Nevada has some of the lowest taxes in the country, and the state’s rankings and public institutions reflect that lack of funding.
Gov. Jim Gibbons will tell us what he wants Nevada to be in his State of the State address Thursday, and the Legislature will provide its answer when it gathers next month for its 120-day session to determine a budget for the next two years.
On its current path — the path of the first-term Republican governor — Nevada will be an adult playground, a tax haven and an experiment in modern social Darwinism.
Gibbons has asked agency and department heads to prepare a budget without a tax increase.
That means cutting the budget 34 percent, which would severely hinder the state’s ability to provide essential services, such as education, health care and assistance for those who cannot provide for themselves.
All the while, educated, middle-class people — a demographic widely believed to be necessary for Nevada’s future success — will examine the brutal landscape and question whether Nevada is where they want to raise their families.
That’s the outlook of more than two dozen Nevadans interviewed by the Sun: elected officials and agency heads, economists, educators and students, health care professionals and their patients, probation officers and the convicts they supervise.
Their assessment was universal: The state is failing, and cutting budgets by an additional one-third would be catastrophic.
Why is this happening?
Nevada faces a fiscal crisis, having for years relied on steroidal growth to fill its coffers in what amounted to a public Ponzi scheme, as one Nevada economist jokingly called it: Tax revenue from new housing developments and casino resorts was spent paying for the demands of growth that had occurred. But it was never enough. Schools were overcrowded, the justice system overworked, and so on.
Now that the growth — and revenue from it — has all but stopped, the crisis has worsened. The growing ranks of the jobless have turned to the state for unemployment benefits and health care — further burdening the state’s depleted resources.
State government, lean by any standard, reduced services and programs during the past year by cutting $311 million from the budget.
Dan Burns, the governor’s spokesman, won’t discuss details of the new budget proposal before Thursday.
But he said: “For 20 years, a long time, the state has done a damn good job providing the state with things they want, and things they need. We can’t afford things we want anymore. And the things we need? We’re going to have to take a close look at those things we need too, to make sure we need them.”
Burns’ claim of a state having met its needs is at odds with almost all empirical measures of the state’s well being.
The situation now
Nevada’s libertarian, tax-phobia roots have produced a weak safety net for those who can’t do for themselves, as well as substandard schools, a mediocre higher education system and a fragile health care infrastructure, according to nearly every state ranking of these services.
The cuts made in health and human services and education, which make up 93 percent of the state budget, as well as public safety, have especially affected the neediest Nevadans.
The state has cut by 5 percent the hospital reimbursement rates for those on Medicaid, a joint state-federal health care program for the needy but also middle class Nevadans whose private insurers have denied coverage for needed therapy. Another 5 percent cut is coming, forcing hospitals to cut services.
Dr. David Stewart, one of just five pediatric orthopedists in Southern Nevada, said the stormy health care climate has made it impossible to recruit a new partner to his practice — the pool of candidates is out of state, and potential partners look askance at Nevada.
Elissa Mandel, a Henderson speech therapist, has had to stop taking Medicaid patients because of cuts to pediatric providers, so she’s referring them to Julie Cole, who is considering cutting sessions in half so she can see more patients and make enough to cover overhead.
A plan to expand “empowerment schools,” which give money and autonomy to principals to create innovative schools, and which was a centerpiece of Gibbons’ education agenda, has been scuttled.
The universities don’t have the money to hire needed instructors, which means students can’t get classes they need.
Probation officers have excessively large caseloads, which threatens public safety.
Will Vegas become another Detroit?
And that’s the situation now, before a new round of cuts that will further darken Nevada’s chance at a stable and sustainable prosperity.
Here’s why: Economists and policymakers agree that Nevada needs to diversify beyond the tourism industry. Other cities that were once company towns like Las Vegas, such as Pittsburgh with its steel industry and Seattle with its airplanes, have become centers of health care and education, and information technology and biotechnology, respectively.
A city that never diversified: Detroit.
But without investment in better schools, as well as a solid health care infrastructure and university system, Nevada’s ambitious and much-touted plans to create health research and renewable energy knowledge clusters will lie dormant for years, perhaps a decade or more.
In other respects, short-term budget cuts may backfire over the long term.
Take Robin Laurent’s son Pierce, who is autistic. Laurent notes that the window of opportunity for intensive therapy to help him learn the rudiments of speech is closing for her son, who is 5. She fears budget cuts will jeopardize that therapy — and Pierce’s ability to be an independent and productive member of society.
“It’s critical they put funding into these kids when they’re little, otherwise it’s going to be 10 or 100 times (more costly) later on,” she said.
Pay now, or pay much more later.
Another example: Budget cuts in public safety will create even greater caseloads for probation and parole officers, twice what is recommended by criminologists. Higher caseloads could lead to higher recidivism rates, so budget cuts here could lead to more crime and drive up the cost of prisons.
(The state’s director of prisons, Howard Skolnik, has threatened to quit if the 34 percent cuts are carried out.)
Another example: 4,000 Nevadans sit on a waiting list for Nevada Check-Up, a health insurance program for the working poor, with a focus on children. Without health insurance, those families will turn to hospital emergency rooms.
That means longer emergency room wait times, more uncompensated care for hospitals facing rough financial seas, and higher insurance premiums for everyone else.
Federal money, federal mandates
Bill Welch, the president of the Nevada Hospital Association, said last month there’s serious talk in hospital boardrooms about avoiding nonpaying patients by closing their emergency rooms and turning their hospitals into rehabilitation, psychiatric or specialized nursing facilities.
If that happens, expect crisis at the troubled University Medical Center, the valley’s only public hospital and often the hospital of last resort for the poor and uninsured. (UMC has eliminated the high-risk obstetrical unit and outpatient oncology program.)
Edwin Suarez, a pediatric physical therapist, says he is losing money monthly because of Medicaid reimbursement cuts, and sometimes wonders if he should leave Nevada. Here since 1977, he has a family, investment properties and a plan — looking increasingly precarious — to expand his practice because he is one of just a few therapists who treat children.
Service levels in some programs are so inadequate that state government will likely confront a wave of lawsuits from residents who have a right to care and from the federal government, which attaches strings to the money it sends for Medicaid and other programs.
One such program is Nevada Early Intervention Services, which helps infants and toddlers with severe learning disabilities, autism and cerebral palsy. The program is so understaffed and has fallen so far behind federal standards, officials are considering rejecting millions of dollars in federal money and getting out of the business, just to avoid lawsuits.
Private insurance generally caps coverage for the intensive therapy these children need. So where will they go? The school district is required to offer services, but the most important developmental work happens between infancy and age 3, before the schools are required to intervene.
The governor’s staff is also considering rejecting the federal money it receives for Nevada Check-Up and shutting it down, which would make Nevada the only state to drop out of the joint federal-state S-Chip program, which Congress created in the 1997 to cover children of the working poor.
Deep cuts in education also come with long-term costs.
The Clark County School District, one of the largest and most troubled in the nation, has consistently struggled to attract good teachers, and a 6 percent pay cut for instructors, which the governor is considering, would most likely impede recruitment further. Already, teachers make 7 percent less than the national average, according to a Las Vegas Chamber of Commerce study. Perhaps that’s why half of all teachers leave the district within five years.
The great aspirations of the state’s system of higher education are largely dead. Nevadans once proudly anticipated a robust University Health Sciences Center to help produce homegrown doctors and nurses, as well as universities that could contribute to the burgeoning green economy.
Although programs like these are the very remedy required for the sickness that ails Nevada — a one-dimensional economy — these aspirations now seem like the Christmas wishes of an impoverished child.
A community that cares?
As the Legislature begins its deliberations next month, Nevadans must also ask themselves a question that goes to the heart of our identity and poses a challenge as old as all the sacred texts of the great religions: Do we care for those who cannot care for themselves?
Mental health clinics in three rural communities have been shuttered. Personal care hours for the homebound infirm have been cut.
And so, here is the choice: Is Nevada a community that values knowledge, culture and progress, nurtures the young, cares for the sick and disabled and looks forward to a future of shared security and prosperity?
If the governor cuts as he has promised, and legislators don’t intervene, Nevada will be something else entirely.
Sun reporters Marshall Allen, Charlotte Hsu, Michael J. Mishak, Emily Richmond and David McGrath Schwartz contributed to this story.