Record $14.03 billion budget proposal increases education, prison spending

CARSON CITY - Gov. Kenny Guinn has proposed a $14.03 billion two-year budget that boosts education and prison spending, but shrinks the percentage of funding for welfare programs and other social services and freezes pay for state workers.

The record budget Guinn sent Monday to lawmakers is about 10 percent higher than the current two-year budget that covers the state through June 30. It includes $3.17 billion in state general fund spending, generated mainly by state sales tax and casino-related taxes, with the balance coming mainly from federal sources.

More than half of the state funding, $1.76 billion, is earmarked for Nevada's schools, from elementary to the university and community college level. That's 55.4 percent of the funding compared to 53 percent in the current budget.

The second largest amount of funding, $755.5 million, goes to human services, including welfare, services for the elderly, family services and mental health programs. While that's an increase in funding, it represents a smaller amount of the total budget - only 23.8 percent compared to 27 percent currently.

Public safety, which includes Nevada's burgeoning prison system, gets the third largest amount with $378.4 million, or 11.9 percent of the budget compared to 11 percent currently.

Guinn's chief of staff, Pete Ernaut, who joined Budget Director Perry Comeaux in a media briefing, said the proposal is balanced in part by some big spending reductions and cuts of nearly 500 employees.

Actually, the total number of state government employees, including those paid by the state and those paid from federal sources, actually increases by 589 employees over the two-year budget cycle. There are currently 15,815 employees and Guinn expects 16,404 full-time workers.

Guinn's proposal also assumes no pay hikes for state employees. But Ernaut said the pay raises are on a list of top-priority items should Nevada's revenues rebound this spring.

Also, the proposed budget doesn't include any expansion of tax rebates for low-income seniors, no new juvenile boot camp programs, and no increased funding for Y2K compliance. But all would get funding if the economy improves.

Guinn also said he's continuing a state hiring freeze ordered several months ago by his predecessor, former Democratic Gov. Bob Miller.

Other items include lowering the reserves for Medicaid and the projected caseload of a Nevada Check-Up program offering low-cost health care to working poor and privatizing medical services for the entire prison system to save money.

The Legislature could revise the spending proposal based on advice from the state's Economic Forum, which will meet again in April, and Ernaut said, "Once this budget leaves our hands, all kinds of things can happen over there."

As it stands now, Ernaut said the state faces the prospect of nearly $300 million less in new revenue than in the current budget cycle, and that meant some programs had to be reduced or cut.

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