SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
January 19, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 9:00 a.m., on Tuesday, January 19, 1993, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobsen
Senator Bob Coffin
Senator Diana Glomb
Senator William R. O'Donnell
STAFF MEMBERS PRESENT:
Dan Miles, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Marion Entrekin, Committee Secretary
OTHERS PRESENT:
Mr. Matthew Q. Callister
Dee Crawford, Senate Attach‚
Judy Jacobs, Senate attach‚
Joan McConnell, Senate Attach‚
Steve Abba, Program Analyst
Birgit Baker, Program Analyst
Jeanne L. Botts, Program Analyst
Larry L. Peri, Program Analyst
Senator Raggio opened the hearing by introducing the committee secretaries and program analysts assigned to the Senate Committee on Finance. He also gratefully acknowledged the return of Mr. Dan Miles, Fiscal Analyst, and Mr. Bob Guernsey, Principal Deputy Fiscal Analyst. He warmly expressed his pleasure in having all of them assigned to this committee.
Senator Raggio stressed that the committee would have a very tight agenda during this legislative session, and in order to meet the deadlines anticipated by both houses and accommodate those appearing before the committee, he expects the committee to meet at the hour designated in order to start the hearings on time.
The committee reviewed Exhibit C, "Senate Committee on Finance
Standing Rules-l993 Session". Senator Raggio asked for a motion for adoption of these rules.
SENATOR JACOBSEN MOVED TO ADOPT THE RULES OF THE 1993
SESSION AS OUTLINED.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Senator Raggio invited Mr. Callister to come forward and be seated with the rest of the committee as an unofficial member. He asked for his participation in any discussion that might ensue.
Senator Jacobsen asked that the Fiscal Analysis Division prepare a list of agency assignments for each of the analysts assigned to the Senate Committee on Finance.
Senator Raggio appointed an audit subcommittee to review the audits conducted by the Audit Division. During discussion of the Governor's Executive Budget, he will ask this committee to indicate the concerns of the Audit Division. The following committee members were appointed: Senator Jacobsen, Senator O'Donnell, and Senator Glomb.
Dan Miles explained the use of the microphones and provided an overview of reference materials that will be available for the committee.
Senator Raggio stated the Governor's Executive Budget will not be received until Tuesday, January 26, creating a 5-day delay in starting the budget hearings. However, he asked Mr. Miles to provide a briefing of the new budget format. He stressed it is the chair's intent to conform as fully as possible to this new format, both in presentation by the agencies and questioning by the committee. He stated the committee will depart from the old system of micro-managing the budget, since this was a time-consuming effort, and concentrate instead on the mission and performance of the agency as well as the new programs. He asked for the cooperation of the committee in directing inquiries along those lines. He will also seek the cooperation of the chairman of the Assembly Committee on Ways and Means to expedite the task of reviewing the budget.
Senator Raggio expressed the hope there will be a better opportunity to act more on a legislative basis than in the past and not be bound to the line-item pages of the Governor's Executive Budget.
Senator Glomb said it was her understanding the new budget will be presented in the format of the reorganization. She inquired if the committee will have budget pages to review based on pre-reorganization. Senator Raggio answered in the affirmative and advised on Thursday, January 21, there will be a briefing on the reorganization. He asked the fiscal staff to keep in mind the committee will want to make comparisons with the former budgets that were presented and look at the reorganization plan. He said the reorganization itself is going to be reviewed not only by the Senate Committee on Finance, but also by the government affairs committees in each house. He cautioned this may be an issue that will take additional time during the session and may require a decision at some point on the overall aspects of reorganization. Senator Raggio added he was advised the purpose of reorganization was to streamline the flow of information and control from the agencies, including boards and commissions. However, it was not designed to cut costs.
Mr. Miles distributed Exhibit D, the tentative calendar listing activities of the Senate Committee on Finance during the recess in February. Senator Raggio pointed out this committee will meet in full-day sessions with the Assembly Committee on Ways and Means to deal with most of the major budgets and indicated there are no plans at this time to meet in Las Vegas during the recess period.
Senator Raggio complimented the fiscal staff on their presession fiscal report stating it was a job well done and will serve as a good basis for dealing with the new budget format.
Mr. Miles polled the committee to determine which members would want to have their own full set of the minutes for the Senate Committee on Finance. He pointed out a full set is maintained in the committee room and there would be two other sets prepared for the fiscal staff that would be available for their use.
Senator Raggio wished to state for the record that Senator Coffin asked to have his own personal set of minutes maintained during the session.
Mr. Miles reviewed Exhibit E, "Budget Definitions", with the committee prior to a slide presentation of Exhibit F, the new budget format. He pointed out that Exhibit F is based on a fictitious agency.
Senator Raggio wished to point out it will be important the committee recognize the term "Base Budget". He said dealing with
the new format will require a complete understanding of the Base Budget that no longer includes the budget approved for that agency but, rather, of the actual expenditures for the particular agency.
He also said the Base Budget the committee will be looking at will include those reductions that were made in the general operating items of a particular agency's budget during the preceding fiscal year.
Senator Rawson commented:
We keep hearing we are going to have a budget presented to us that has the new organization in it which will be, supposedly, a contraction. I am wondering if that really fits the definition that was thrown out in this last session. In other words, that isn't a base budget that is coming to us. Somehow we have to have a base budget then put the changes into it.
Mr. Miles responded:
In some cases it will be clean. You will have the same budget under the old organization as well as under the new organization. In some instances, as you point out, there will be a mix or match of budgets and you will not have a clean transition. We are not certain yet how this is going to turn out since we do not have the new budget either.
Senator Rawson asserted:
As I understand, we left the last session with law that described the way the budget has to be presented, and as I remember that law it states very clearly that we must have presented to us a base budget and then any recommendations beyond that budget....It seems to me inappropriate to have any budget presented to us that doesn't start with that base budget.
Mr. Miles said the budget presented will be in the format required under the law, and each budget will have a base in it. It will have to be determined whether that base is a legitimate base for that particular budget or whether it is changed because of reorganization.
Senator Rawson wished to state for the record:
This is an unnecessary compounding of a transition that we, by law, were prescribing to be done.
Senator Raggio pointed out that the fiscal staff has been asked to review the areas where the budget reorganization is most involved, and to ferret out what is a true base budget based upon previous actions.
Senator O'Donnell, directing his question to Mr. Miles, asked:
In dealing with the clean budget, you said we were going to try to get a clean base and you are going to strip away the one-shot appropriations. If you take an item such as an airplane or a crane where we one-shot approve certain funds for that, are you taking into account a depreciated cost in terms of adding the depreciation? Somewhere down the line we will have to replenish that item, and is that reflected as a part of the cost in the base?
Mr. Miles replied this would not be reflected in the budget since it is actually a cash budget. He said if there were an appropriation for an airplane in fiscal year l992, the entire cost would be removed from the base. That particular agency may have another mechanism whereby some depreciation expense could be accumulated to replace or repair later on.
Mr. Miles continued his explanation of Exhibit E, "Budget Definitions". He stated that the new law requires the addition of mission statements and performance indicators for each budget account. Mr. Miles commented this will be the first official use of performance indicators in the budget and suggested that each of the committee members pay particular attention to them since they have been developed to better indicate true performance levels.
Senator Raggio added:
This is one area that I would ask the staff to pay particular attention to, because we will be looking at the Executive Department's evaluation on performance. I would ask them to be particularly diligent in reviewing those performance indicators.
Mr. Miles pointed out the audit division has indicated in their post-financial audit process they will also be taking a close look at the performance indicators to offer suggestions to the state agencies for improvements in that area.
Mr. Callister commented he shares Senator Raggio's concerns about the utilization of the terminology contained in the new budget format. He further stated:
What is key for all of us is we use the new terminology as tools to make artful distinctions between the Base Budget, Current Services Budget, and Enhancements...that was the point of the whole reform...to not micro-manage without accurate information...but be able to say this is how much we have been spending, what it will cost based on demographics, caseload increases, court decrees, or things over which we have no control, and here is the true enhancements. Basically, the focus was to give us a more usable tool to analyze the budget....It is key for us to get those terms down, accurately. I am troubled because I see the same problem manifesting itself...that is, whether we call it Maintenance or Current Services Budget.
Senator Raggio said it has been made clear they will be using the term Maintenance Budget as what is necessary in addition to the Base Budget to carry on current services. He said primarily they will be looking at inflation and caseload factors. He cautioned the committee should all stay with the same terminology to avoid confusion.
Mr. Callister then inquired as to whether or not the recently named audit committee could provide the most current audit information available to assist the committee while reviewing performance indicators. He asked if this information could be made available the day before hearing a particular budget.
Senator Raggio replied he would ask the chairman of that committee, Senator Jacobsen, to bare that in mind.
Mr. Miles continued with his explanation of Exhibit E, "Budget Definitions", Pages 3 - 5.
Mr. Miles did a slide presentation for the benefit of the committee of the new budget format, Exhibit F. He stated the whole idea of the new format was to replace the detailed line-item budget with one that points to the programs and the accomplishments of a particular agency or budget and to focus attention to the policy and issues rather than the details of a particular budget.
Senator Rawson said in the past they had reviewed a separate sheet to look at the salary savings and what positions were vacant and were not filled. He asked if a position now goes unfilled, would it be rolled into the Base Budget.
Mr. Miles replied because of the budget reductions that have taken place, in most cases a position that has gone unfilled will probably no longer be available. However, the detailed records available would indicate whether the agency actually planned for vacancy savings in a particular budget.
Senator Raggio clarified:
I believe Senator Rawson's question is, if during a whole year an authorized position was not filled, there would have been no expenditure for that position. Would the Base Budget then be reduced by that salary and, what would be reflected in the position column? Would it be the actual position or would that number still be in there even though the position was not filled?
Mr. Miles responded that the number would still be shown even though the position was not filled if the agency intends to continue that position. He added in this particular biennium most of the unfilled positions have been deleted and would not be reflected due to budget reductions, not because of the new budget format.
Mr. Miles continued with the slide presentation of the new budget format, Exhibit F, during which time various questions were posed by the committee regarding how to properly follow the new budget format.
Senator Glomb asked if a decision had been made about the formulation of subcommittees and if so, what they will be and who will be serving on them.
Senator Raggio responded it may not be necessary to have the number of subcommittees that had been used in the past due to the new budget format. He believes subcommittees are not always necessary, but at such time a particular budget or area requires specific attention, he will consider this option. However, at this point the chair is inclined to limit the number of subcommittees.
Senator Raggio did mention since the issue of personnel and salary items had been raised, it might be helpful to ask one member of the committee to monitor the information dealing with personnel expense, salary, vacancies, etc. He then asked Mr. Callister to undertake this assignment, and Mr. Callister agreed to do so.
Senator Raggio commented the committee has a number of agency and county bills requiring introduction by the Senate Committee on Finance. In the past the committee had been liberal in accepting committee introductions and this procedure will continue for the agency and county bills that have been preassigned to either house. However, he now wishes the committee be somewhat discriminating about bills that are floating around and to use their best judgement before asking for committee introduction of bills.
Senator Rawson stated the fact that the committee is willing to introduce the bill is not to be construed as its support of the bill.
Senator Raggio requested committee introduction of the following bill draft requests (BDRs):
BILL DRAFT REQUEST 38-348: Expands eligibility for coverage for long-term care under state plan for assistance to medically indigent.
SENATOR RAWSON MOVED TO INTRODUCE BDR 38-348.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY
* * * * *
BILL DRAFT REQUEST S-1029: Makes supplemental appropriation for district judges' salaries and judicial pensions.
SENATOR COFFIN MOVED TO INTRODUCE BDR S-1029.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
BILL DRAFT REQUEST S-780: Makes appropriation to Department of Transportation for construction of road in Railroad Valley area of Nye County.
SENATOR O'DONNELL MOVED TO INTRODUCE BDR S-780.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
BILL DRAFT REQUEST S-452: Makes appropriation to support Acupuncture treatment for drug abuse.
Senator Raggio stated the committee will hold BDR S-452 pending the receipt of additional information and asked Senator Rawson to obtain additional information on the BDR to report to the committee.
* * * * *
BILL DRAFT REQUEST S-528: Revises authority of Colorado River Commission to issue bonds.
SENATOR RAWSON MOVED TO INTRODUCE BDR S-528.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
BILL DRAFT REQUEST S-1028: Makes appropriation to supreme court of Nevada for costs of temporary relocation of Las Vegas office.
SENATOR RAWSON MOVED TO INTRODUCE BDR S-1028.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Before adjourning the hearing, Senator Raggio wished to express his pleasure in working with experienced, knowledgeable legislators in the Senate Committee on Finance. He reminded them once again that in order for the chair to start all hearings in a timely, professional manner, they must attend all meetings on time.
Senator Raggio also wished to point out that people appearing before the committee are witnesses invited at the committee's request and invitation. They are to be treated courteously and are never to be harassed or harangued in any way. Further, if a point is to be made, it should be done in a polite manner. He suggested if it is the opinion of any committee member that a witness should be taken to task, this should be mentioned to the chair in private. However, the committee room is not the place to embarrass a witness in any manner.
Senator Raggio adjourned the meeting at 10:40 a.m.
RESPECTFULLY SUBMITTED:
Marion Entrekin
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
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Senate Committee on Finance
January 19, 1993
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