Sen. Coffin calls for use of state's 'rainy day fund'

CARSON CITY -- There's $128.8 million sitting in a "rainy day fund" for state government and one senator from Las Vegas wants to dip into it to ease the expected suffering from budget cuts.

Sen. Bob Coffin, D-Las Vegas, told state Budget Director Perry Comeaux Tuesday, "Maybe this is the time to use it."

He was referring to the fund established in 1993 to pull Nevada through a financial crisis. But Comeaux replied Gov. Kenny Guinn does not recommend this approach to the present budget crunch.

The exchange came during discussion between Comeaux and the budget committees of the Senate and Assembly, which are meeting in advance of the Legislature to review Guinn's $3.2 billion budget, which includes layoffs of state workers, no pay raises and scaling down some social programs.

Coffin said there are going to be some "pretty sad stories over the next two years if we don't plug in some money." He said it would take only a change in the law to allow the Legislature to use this fund. But Comeaux said this was not what was contemplated when the fund was created.

The law permits use of the money only if tax revenue for the biennium falls short of the anticipated amount by 5 percent or more, or if the Legislature and the governor declare that a fiscal emergency exists.

Comeaux said the shortfall in tax revenue did not hit the 5 percent mark. But Coffin said it would only take a "statutory change" to allow the Legislature to start using the money.

Sen. Joe Neal, D-North Las Vegas, suggested it may be time to raise the taxes on casinos. Neal, who unsuccessfully ran for the Democratic nomination for governor, proposed during the campaign a hike in the gaming tax, which has not been raised in nearly a decade. At 6 1/4 percent on the large casinos, it is among the lowest in the nation in states that permit gambling.

The governor has not proposed any new taxes.

Comeaux detailed for the committees how Guinn built his budget, shifting money and pulling back funds from a number of sources in order to balance the budget without increasing taxes.

In one case, the budget director said more than $185 million of non-state funds was transferred within the Medicaid budget. And this means, he said, "We will have a big hole to fill in the next biennium" in the 2001-2003 budget. The state will have to find the general tax revenue to plug that gap in 2001.

Neal asked: "How are you going to make this up?" Comeaux replied, "I don't know. It's part of the governor's plan for a complete budget review over the next two years."

Assemblyman Morse Arberry, D-Las Vegas, chairman of the Ways and Means Committee, accused Comeaux of using "smoke and mirrors" to achieve a balanced budget. Comeaux replied "It was certainly not smoke and mirrors." The transfer of funds and other moves, he said, helped avoid making drastic cuts in spending programs for the coming two years.

"I can't make it pretty," he said.

To add the gloomy future financial picture, Comeaux said the tax revenue for the next two years is expected to rise only 7 percent.

Population growth, meanwhile, is predicted at 8 percent; enrollment in kindergarten through the 12th-grade will be 9-10 percent; students at the University and Community College System will increase by about 10 percent, and the prison numbers are expected to jump by 12 percent.

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