Legislative gamble may backfire, force cuts in services to poor

By David McGrath Schwartz

Monday, June 7, 2010 | 2 a.m.

As if Senate Majority Leader Harry Reid didn’t have enough on his plate, now Nevada lawmakers are looking to him to prevent another budget crisis.

Nevada faces an $88.5 million budget hole, as federal legislation that lawmakers and Gov. Jim Gibbons banked on to balance the budget is in jeopardy.

During February’s special session — called to close a then-$800 million budget gap — legislators assumed Congress would contribute more to Nevada’s Medicaid program, as the federal government has since the stimulus passed in January 2009.

A bill that passed the U.S. Senate did just that. But at the last minute, conservative “Blue Dog” Democrats in the House got cold feet about the overall cost of the legislation. In its effort to lower the bill’s cost, that bloc forced out the extra money for states’ Medicaid programs.

This has about 30 states, including Nevada, facing a collective deficit of $25 billion, according to the Center on Budget and Policy Priorities, a liberal Washington budget group.

In Nevada, losing that $88.5 million would lead to more cuts in health care and services to the poor, mentally disabled and elderly, said Lynn Hettrick, the governor’s deputy chief of staff.

Hettrick said the state needs to know what Congress is going to do by June 15. “Any later than that, we’ll end up most likely having to make severe cuts and truck on.”

It’s unclear what those cuts would be. Hettrick and legislators pointed to cuts proposed during the February special session but tabled by the governor and lawmakers after they agreed to fee increases and raids of local government funds. Among those cuts were limiting housing for the mentally disabled and mentally ill, increasing premiums for poor children’s health insurance, cutting the child welfare and foster care systems by 10 percent and eliminating dentures, hearing aids and eyeglasses for the poor and elderly.

Hettrick said another special session to address any of this is “unlikely.”

Jon Summers, spokesman for Reid, said the Senate majority leader had supported extending the extra Medicaid money for Nevada.

“Reid is working to get this through the Senate as soon as we can,” Summers said. “Getting it done will require help from the Republicans, so Sen. Reid hopes they will work with us so that states like Nevada don’t have to cut jobs and other critical services.”

With Reid’s support, the Senate will attempt to add the money back in. “It’s doable, but a significant challenge,” said Ellen Nissenbaum, legislative director with the Center on Budget and Policy Priorities.

Nissenbaum said Reid will have to get 60 votes, but with an electorate worried about Washington deficits, that could be tough.

Rep. Shelley Berkley, D-Nev., supports adding back the Medicaid money, according to her spokesman, David Cherry.

Rep. Dina Titus, D-Nev., supports a six-month extension of the enhanced Medicaid money, according to her spokesman Andrew Stoddard. Although Titus had concerns with the overall cost of the bill, she would have preferred other cuts, he said.

Rep. Dean Heller, R-Nev., did not respond to requests for comment.

What happens if the federal government doesn’t put the money back in?

Hettrick said the cuts would likely come from the Health and Human Services Department, because the governor can’t move money between department budgets without approval from the Legislature.

Counting on the $88.5 million in the February special session plan to balance the budget “was a gamble,” Assemblywoman Sheila Leslie, D-Reno, acknowledged.

“We were desperate to balance the budget, and the indications from Washington were very positive that it would probably pass in a reasonable time frame,” she said. “We’re still very hopeful it will pass. Cutting that much will be very, very hard.”