MINUTES OF THE
ASSEMBLY COMMITTEE ON WAYS AND MEANS
Sixty-seventh Session
June 7, 1993
The Assembly Committee on Ways and Means was called to order by Chairman Morse Arberry, Jr., at 9:45 a.m., on Monday, June 7, 1993, in room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda.
COMMITTEE MEMBERS PRESENT:
Mr. Larry L. Spitler, Vice Chairman
Mrs. Vonne Chowning
Mr. Dean A. Heller
Mr. David E. Humke
Mr. John W. Marvel
Mr. Richard Perkins
Mr. Robert E. Price
Ms. Sandra Tiffany
Mrs. Myrna T. Williams
COMMITTEE MEMBERS ABSENT:
Mr. Morse Arberry, Jr., Chairman - Excused
Mr. Joseph E. Dini, Jr. - Excused
Ms. Christina R. Giunchigliani - Excused
Mrs. Jan Evans - Excused
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Gary Ghiggeri, Deputy Fiscal Analyst
ASSEMBLY BILL 19 Makes various changes regarding public employees.
Mr. Spitler commented AB 19 was being heard again because fiscal impact estimates for the bill varied so widely. Mr. Spitler asked staff for a brief overview. Mr. Stevens referred to Exhibit B which evaluated the fiscal implications of AB 19. He explained staff attempted to determine whether there was sufficient funding for the retired group insurance account to pay for the increased costs associated with AB 19. The bill proposed to pay health insurance benefits to retired state employees based on years of service. If projections were based on existing law, insufficient funds were available in the retired state employees retirement account as recommended in the 1993-95 biennium. Mr. Stevens estimated the account would be short approximately $271,000 in FY 94 and $323,000 in FY 95. He noted the balance forward would reduce some of the shortfall in FY 94; however, it did appear the assessment rate would have to be increased to these benefits based on existing law. Mr. Stevens stated AB 19 would increase the budget shortfall in the account above the current projected shortfall because of the growth assumption for new retirees was based on an increase of 6.25 percent in each year of the biennium.
Mr. Stevens noted the fiscal impact of AB 19 could be calculated in several ways. The State Employees Retirement System projections, based on the number of employee retiring in 1992, indicated fiscal impacts of AB 19 would be $500 per month. The Risk Management Division indicated an additional monthly cost of approximately $2,900 per month. Legislative staff based estimates on information from the Retirement System and an average of the number of retirees over a five year period. Projections indicated the fiscal impact of AB 19 would be an additional $2,000 monthly. Mr. Stevens explained estimates depended on the number of retirees, time of retirement and the number of years of service the retirees had accumulated. Also, the Risk Management Division indicated it would be necessary to modify the current data processing system if AB 19 was implemented. The estimated cost for modifications was $48,500. Additionally, the bill had an effective date of July 1, 1993, however, the Risk Management Division would be unable to implement the program that quickly. Mr. Stevens stated the Risk Management Division preferred a January 1, 1994 effective date.
Mr. Spitler asked if the base amount paid to the state employees retirement account was determined during each legislative session. Mr. Stevens replied the base amount was approved each legislative session. The Governor recommended paying $119.35 per month in FY 94 and $127.61 per month in FY 95.
Bob Gagnier, Executive Director, State of Nevada Employees Association (SNEA), supported AB 19. He asserted the budget shortfall described earlier, $271,000 in FY 94 and $323,000 in FY 95, would result regardless of this legislation. Mr. Gagnier stated the SNEA had no objection to delaying implementation of AB 19 until January 1, 1994.
Mr. Spitler asked David Thomas, State Risk Manager, Risk Management Division if the projections presented by the Fiscal Division were accurate. Mr. Thomas said a complete summary had been provided by Mr. Stevens. He confirmed the fiscal impact of AB 19 would likely be $2,000 per month over the next biennium. Mr. Thomas explained estimates would depend on the number of retirees and years of service. He remarked several estimates had been made over the last few weeks. Mr. Thomas could not predict with absolute accuracy the fiscal impact of the bill because variables were inconstant. He asserted projections had been influenced by a higher than normal rate of retirement in 1992 because of budget constraints and layoffs. He contended a five year average was reasonable.
Jim Richardson, Nevada Faculty Alliance, supported AB 19 because it represented good state policy. It was the intent of the legislation to reward long-term state employees by contributing more to their health care insurance during retirement. Currently 5- and 40-year employees received equal contribution to health care insurance after retirement. He hoped the committee would consider AB 19 a policy rather than a fiscal issue.
Mike Johaneson, Service Employees International Union (SEIU), supported AB 19. He stated the SEIU submitted a letter at an earlier date. He asserted this was part of the health care crisis in the state. He urged the committee to look at the bill as a long-term approach to helping retirees of the state.
Vice Chairman Spitler asked for committee introduction for BDR no. 27-2104 which mandated adoption of regulation requiring certain state officers and state employees to reimburse the state for use of state vehicles to commute from residence to place of employment.
MR. HUMKE MOVED FOR COMMITTEE INTRODUCTION OF BDR NO. 27-2104.
MR. PERKINS SECONDED THE MOTION.
Mr. Marvel stated the bill draft was a result of an audit of the State Motor Pool.
MOTION CARRIED UNANIMOUSLY BY VOICE VOTE. CHAIRMAN ARBERRY, SPEAKER DINI, MRS. EVANS AND MS. GIUNCHIGLIANI WERE ABSENT.
The meeting was adjourned at 9:55 a.m.
RESPECTFULLY SUBMITTED:
_________________________
Courtnay Berg
Committee Secretary
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Assembly Committee on Ways and Means
June 7, 1993
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