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April 21, 2015

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Are Sandoval’s magic money gifts good news?

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Gov. Brian Sandoval might not be Santa Claus, but he does know how to give mysterious gifts.

This month, he found $25 million for education programs and even released a handy slogan: “Increasing funds for education without raising taxes: Check.”

The next day, he said he found yet another $25 million for health programs for the state’s most vulnerable populations. Then, he announced $12 million more for eliminating furloughs for state workers by mid-2015.

How, exactly, did those presents end up under Nevada’s Christmas tree?

The majority of the money comes from regular state accounting adjustments, and it’s not necessarily good news. Nevada gets a portion of this new money because the federal government now projects the average American’s income will grow faster than the average Nevadan’s income.

While Democrats have called for more education spending this year, Sandoval said during his address to the Legislature that his budget will grow with the economy.

“We cannot cut our way out, we cannot tax our way out, we can only grow our way out,” he said.

But in this case, economic growth isn’t fueling increases to the budget.

Besides getting more federal money because it’s getting poorer than other states, Nevada also is benefiting from revisions to the number of state residents enrolled in government health programs and a nationwide trend in lower-than-projected health care costs.

“Those are both pretty standard adjustments we’d make,” said Jeff Mohlenkamp, the state’s budget director. “They just happen to be working in our favor right now.”

The governor did bargain one large concession from the federal government. His office negotiated with federal officials to get an extra $17.6 million as part of the state’s expansion of Medicaid, a part of President Barack Obama’s health care overhaul law.

“It’s a large win for the state,” Mohlenkamp said.

Besides these accounting adjustments, Mohlenkamp said there are at least three other major adjustments the state will make before it finalizes its budget in June.

Some of these will reflect the state of the economy.

“I feel good,” Mohlenkamp said. “I’d be surprised if it went down significantly.”

Democrats welcomed the new money for the budget, saying the Republican governor is putting money toward good programs.

But Sandoval’s budget still isn’t big enough to mollify calls from Democrats to spend more for education and health programs that were reduced in the past few recession-era budgets.

“We should be spending more on all-day kindergarten, and we should be spending more on (English-language learners),” said Assemblywoman Maggie Carlton, D-Las Vegas, the chairwoman of the Assembly’s Ways and Means committee, which manages spending bills at the Legislature. “This is basically a scratch in restoration of all the cuts that have happened. This is a nice little baby step forward.”

Overall, the governor has added $77.7 million to the $6.5 billion general fund budget he has proposed, including $25 million for expanding English-language learner and full-day kindergarten programs.

The budget office is banking $11.4 million, hedging against further adjustments to the budget.

“It’s prudent not to spend every dime until we know what we’re up against,” Mohlenkamp said.

The final total dollar amount available won’t be known until May 1, when a bipartisan panel of economists charged with making the state’s official revenue forecasts, the Economic Forum, meets.

Some conservative-minded Republicans privately grumbled that all $77.7 million should be used to help replace budget gimmicks and tax increase extensions that Sandoval is using in his proposed budget.

Sen. Debbie Smith, D-Reno, has called for more education spending from her perch at the head of the powerful Senate Finance Committee. She was pleased with Sandoval’s amendment.

“He is funding our priorities,” she said. “That said, we will have to wait until after the Economic Forum plays out.”

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  1. Here is the analogy: it is simple redistribution of Federal Government welfare hand outs for indigent states. The poorer Nevada is, the more it qualifies for and comes in...without, get this, increasing state taxes.

    So the Governor throws the dog a bone, as they say. But this is NOT a sustainable practice. Somewhere down the line, there must be meat, a consistent, health diet. Will Nevada ever get there?

    Blessings and Peace,

  2. Hey Stara, what do you expect to do, live in this country....without paying your fair share????

  3. If the money comes from Federal funds, then it is deficit spending, money tacked onto the National Debt. The Federal deficit is what the Republicans claim should be cut back, until they become the beneficiaries of that budget.

    Where the money really comes from no one knew, most likely from a place so dark that everything seemed blue...

    "Hey when this is all over
    You'll be in clover
    We'll go out and spend
    All of your blue money
    Blue money"

    - Van Morrison, Prescience

  4. You missed my point Commenter AZstripper1. We all should be paying our fair share in taxes as good Citizens, and we in turn, expect full accountability of that tax money. What seems to be happening, is allowing the State of Nevada to fall into such desparate disrepair, that it will qualify for Federal help/assistance. Is that the path WE, as taxpayers, want to go?

    Grant you, a million is a million, it pays the bills or overhead. Underfunding the state infrastructure over a period of time, is about ineffective governmental leadership. As our economy improves, we should improve.

    Gold and silver are at an all time high, and it is mined in Nevada, for example, so we should see a hefty return from these mining companies, and haven't. For decades, Lawmakers had kicked that political can down the road...mining supported their campaigns, you know the rest....I hope.

    Blessings and Peace,