MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
March 18, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Thursday, March 18, 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
Senator Matthew Q. Callister
STAFF MEMBERS PRESENT:
Dan Miles, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Birgit K. Baker, Program Analyst
Marion Entrekin, Committee Secretary
OTHERS PRESENT:
Judy Matteucci, Director, Department of Administration
Sue Wagner, Lieutenant Governor, Chairman, Commission on Economic Development, and Chairman, Commission on Tourism
Tim Carlson, Director, Division of Economic Development, Commission on Economic Development
Robert Hirsch, Director, Division of Motion Pictures, Commission on
Economic Development
Sally Lear, Representative, Filmmaker's Association of Northern Nevada
Moya Lear, Representative, Filmmaker's Association of Northern
Nevada
Timothy Wilson, Location Manager/Scout, Filmmaker's Association of Northern Nevada
R. Leo Penne, Director, State of Nevada, Washington, D.C., Office
Garth F. Dull, Director, Department of Transportation
Glenn Van Roekel, Director of Community Development, City of Caliente, Nevada
Donald Schmanski, Chairman, Carsonite International, Carson City,
Nevada
Jeff Griffin, President, Griffin Transport Services, Inc., Sparks,
Nevada
Thomas Tait, Executive Director, Division of Tourism, Commission on Tourism
Rich Moreno, Editor/Publisher, Division of Publications (Nevada Magazine), Commission on Tourism
Senator Raggio requested introduction of the following bill draft request (BDR).
BILL DRAFT REQUEST S-1815: Makes appropriation to state public works board for certain capital
improvement projects.
Senator Rawson asked if this BDR refers to issues that had been addressed by the committee in the past.
Judy Matteucci, Director, Department of Administration, replied in the affirmative. She said during an overview of capital improvements for the Department of Human Resources a project to replace the cooling tower and repair the roof at the Southern Nevada Adult Mental Health Services was discussed.
Ms. Matteucci stated the condition of the roof at the southern Nevada facility has deteriorated requiring the introduction of this BDR at this time. She added introduction of this bill will also give the authority to begin renovation of the Fremont School and old state library building to house state agencies in Carson City, Nevada.
Senator Rawson stated he did not wish to delay the renovation projects as outlined, but he is concerned about rushing this BDR through because the state is short of bonding money and this tends to prioritize this capital improvement project above many others that will require funding as well.
SENATOR RAWSON MOVED TO INTRODUCE BDR S-1815.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR GLOMB AND SENATOR O'DONNELL WERE
ABSENT FOR THE VOTE.)
* * * * *
BILL DRAFT REQUEST S-273: Makes appropriation to department of museums and history for employment
of technical services unit.
SENATOR COFFIN MOVED TO INTRODUCE BDR S-273.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR GLOMB AND SENATOR O'DONNELL WERE
ABSENT FOR THE VOTE.)
* * * * *
Senator Raggio welcomed Lieutenant Governor Sue Wagner who will speak in her capacity as chairman for both the Commission on Economic Development and the Commission on Tourism.
Commission on Economic Development - Page 588
Sue Wagner, Lieutenant Governor and Chairman, Commission on Economic Development, read from prepared text (Exhibit C) from which she provided a brief overview of the commission's work for the past 2 years and the goals and priorities the commission hopes to accomplish during the next biennium.
Lynn S. Atcheson, Vice President of Communications and Public Affairs, Washoe Health System, Reno, Nevada, and Michael C. Sheppard, President of Michael Clay Constructors, Winnemucca, Nevada, members of the Commission on Economic Development, were present for today's meeting and were introduced by Lieutenant Governor Wagner.
Lieutenant Governor Wagner distributed to the committee copies of Exhibit D - Original on file in Research Library, "Focus 2000" which outlines some of the major objectives of the Commission on Economic Development. Exhibit E, a brief prepared by the Nevada Commission on Economic Development, was also distributed to the committee for their review.
Senator Raggio referenced Exhibit D and asked the Lieutenant Governor what stand the commission has taken with respect to the problem of workers' compensation and health care.
The Lieutenant Governor replied the commission has a BDR to be introduced that will allow companies to move into the State of Nevada and bring with them their own workers' compensation history. She believes this has been encompassed in the omnibus bill dealing with the State Industrial Insurance System (SIIS). She further stated the issue of workers' compensation has been a problem for the state in encouraging some companies to come to Nevada, and SIIS has been one of the concerns many of these companies have commented on.
Senator Raggio stated his attention was drawn to pages 24 and 25 of Exhibit D and asked if the commissioners have been active in connection with the legislative efforts now underway to improve the workers' compensation and health care systems so that each will become an asset to the Nevada business community, and attract new firms to Nevada. He further commented that he was personally impressed that SIIS was set forth as a specific issue and a goal of the commission.
Lieutenant Governor Wagner said some of the members, as individuals, have been quite active in this regard. However, the commission as a whole has not taken a position on SIIS legislation with the exception of the BDR to which she had previously eluded. The Lieutenant Governor said while the legislature has been in session this year, the commission has not had a meeting and they have not taken a position on whether to have her, as chairman, go forward and testify on behalf of a bill when a bill is actually before the senate.
Senator Raggio stated he felt it would be timely and wise for the commission to take some kind of a position on this issue because it will have a major impact upon whether or not Nevada will attract companies to come to the state. Lieutenant Governor Wagner concurred with Senator Raggio's statement.
Senator Glomb arrived for the meeting at 8:27 a.m.
Senator Raggio commented that in addition to the SIIS issue, the job training incentives offered in other states are more enhanced than in Nevada and asked if the "Quick Start" program (referenced in Exhibit C) was important to their efforts to bring new businesses to the state.
Lieutenant Governor Wagner replied:
Yes. I can say without hesitation that is the one issue the commissioners unanimously have agreed upon. We slashed our budget totally last year and eliminated all 'Quick Start' money because there were no companies eligible and we needed to find cuts somewhere. We all made a commitment that we had to come forward as a group to you (the committee) or the Interim Finance Committee....
I am going to speak for myself at this time that I do not think the budget is sufficient for the next biennium. We have a company in Las Vegas, Ocean Spray Cranberry, that is probably a very fine example of how this job training money is being used and there are other pending companies....Very honestly the money in the budget is not sufficient to take care of our current needs much less needs that might come up in the future...and I speak only for myself on this issue.
Senator Glomb referred to Exhibit D, page 4, item 3, "Science and Technology" and asked how the creation of a business climate that is attractive to science and technology pertains to the commission. She also asked how the comments recently made by United States Senator Harry Reid will affect the Commission on Economic Development.
Lieutenant Governor Wagner answered:
I think Senator Reid not only felt establishing a science and technology office was a very positive step on behalf of the Governor, but I think he also left us with the idea that it should be housed in the Commission on Economic Development.
Again I speak for myself, I think that is appropriate and I think that is where it does belong not only because of the potential spin-offs, the relationship between the university system, the private sector, the research and development...clearly we are talking about economic development. We see great promise. We did not come to this table without some plan, and we feel we could utilize that office in a positive way for the future of this state. That is a question you will have to answer....I have not polled the commissioners, but if I did I believe they would agree with that statement.
Senator Glomb stated she would be interested in some of the feedback from the other commissioners on the location of that office through a letter to the committee.
Lieutenant Governor Wagner agreed with Senator Glomb's request and commented, "I am discussing this issue. Senator Reid has made his position rather clear. At this time I am visiting and discussing this issue with the Governor."
Senator Raggio stated, "We are prepared to request, if the committee approves, a bill draft for that purpose. We do not want to act precipitously so we would like to hear from the Governor and the budget office on that subject."
Senator Jacobsen stated:
As you well know the Governor has put much emphasis on reorganization this session. The final report recommends that the Commission on Economic Development and the Commission on Tourism remain separate and independent but other information suggests they should work together. Would you see any reason why they could not be combined?
Lieutenant Governor Wagner replied:
I think that question was posed by the committee involved in the reorganization. That is a question that I could not tell you today is the direction to take. I could tell you that last year I established a subcommittee of the Commission on Economic Development and a subcommittee of the Commission on Tourism to meet together to examine that subject in terms of should we join together and work as one or should we just have one commission? Unfortunately, the subcommittees were unable to meet, but it is something we will be looking at in the next year. I am not in a position to tell you that is the direction we should go. I think that is a policy position. Both of these commissions are policy boards. I think it should be dealt with by them. It would be a major decision to be made. I think it is an appropriate question and an issue we should look at.
Commission on Tourism - Page 602
Senator Raggio stated in the interest of time, the Lieutenant Governor will discuss this budget out of order from the agenda, Exhibit A. The hearing will return to further discussion regarding the Commission on Economic Development at the conclusion of testimony by Lieutenant Governor Wagner regarding the Commission on Tourism.
Lieutenant Governor Wagner, using prepared text (Exhibit F), once again presented an overview to the committee of the work the Commission on Tourism has accomplished during the past 2 years and what they hope to achieve in the next biennium.
Senator Raggio asked what specific areas are of concern to the Commission on Tourism.
Lieutenant Governor Wagner responded one area of concern to the commission is the transfer of special revenue funds generated from room sales and earmarked for support of commission marketing programs, to general fund agencies. These transfers have occurred without the benefit of accountability by the recipient agencies to the commission, without notice of the duration of the transfer, and without a provision that reduces the amount of the transfer in the event room sale revenues do not meet budgetary expectations. She stated the commission drafted a letter which spells out the problems inherent to a policy of continued fund transfer and this letter will be sent to each money committee member in both houses within a few days.
Lieutenant Governor Wagner further stated:
This has been an ongoing problem....In meeting with the budget director we crafted an opportunity for these agencies who receive transfer of funds to come before the commission and explain to us how they spend that money and how it relates to tourism. However, as the chairman of the commission I was directed to have a letter drafted and approach each of the money committees because the commission found that not to be satisfactory. They feel in 1983 when this legislation was created the dollars were to go to tourism but through the years they have seen these monies being transferred to other agencies. They would like to have more involvement in the decision process since they feel this is money that was supposed to be placed in the Commission on Tourism and not in other places. The commission unanimously voted for me to send the letter to the money committees.
Senator Callister referred to Exhibit D, and noted the commission's primary goal is to develop a stable tax policy. He then read verbatim the information contained on page 20 relative to issue 6, "Taxation". He then asked to what extent and how there is some linkage between Nevada's efforts to diversify its economy and its reliance upon unstable tax revenues.
Lieutenant Governor Wagner answered:
There have been some companies that have suggested they might be concerned coming to a state where there is not a stable tax policy because they are somewhat unsettled potentially by the possibility that every biennium there might be a change in the tax policy...and although we like to sell ourselves as a low tax state, that is the case....
Senator Callister said economic diversification is no longer an option but rather the future of this state. He asked the Lieutenant Governor to provide the committee with any evidence the commission may have that would verify a concern on the part of potential new Nevada customers who are expressing anxiety over inherent instability in the revenue base.
Lieutenant Governor Wagner stated the commission would provide this information.
Senator Raggio requested the committee return their attention to:
Commission on Economic Development - Page 588
Tim Carlson, Director, Division of Economic Development, Commission on Economic Development, provided the committee with an overview of this budget by reading from prepared text, Exhibit G.
Senator Raggio asked, "With this recession and with the activity we are attempting to escalate, is it a wise decision to reduce an advertising budget?"
Mr. Carlson stated the commission was established to market and sell Nevada and the advertising budget was cut by approximately $50,000 for each year of the biennium. He believes the decision to slash this budget was made because the agency had cut everywhere else they could and this was the only budget left to be cut.
Senator Raggio stated advertising seems to be one of the prime activities of this commission and historically in the committees they had always emphasized the need for advertising dollars.
He then asked Mr. Carlson to speak about the California Initiative Program. He asked if this program has caused an increase in inquiries for the commission staff to process.
Mr. Carlson discussed a conference he attended of economic developers brought to the southern California area that gave Nevada an opportunity to present their wares to southern California business people. Eight individuals representing economic development agencies, along with the state, were kept busy for 3 hours answering questions posed by California business people. He feels this was a sign of the California Initiative Program working. The commission had a total of 91 good leads that were pursued and shared with the economic development groups throughout the state.
Senator Raggio asked, "What does your commission feel could be done in addition to what is already planned by your commission to attract California businesses to this state?
Mr. Carlson replied:
Besides the marketing issue we could be providing a more comprehensive service to the clients....That is what we also do, provide an extremely strong service-type operation after a business comes into the state...and being able to handle them in a professional manner by passing them to the economic development groups and offering them the incentive of job training. The Quick Start Program is an extremely good program we have available to us now.
Senator Raggio commented:
It appears this is the time to strike while the iron is hot. There is a window of opportunity when extra effort should be made to do something about it. Are you able to deliver that message as emphatically and extensively as you should be doing at this point? It seems to me this is the time we should really move on this issue, and it does not appear there is the dedication of resources or effort here that is being suggested to accomplish that. I think this is an area where dollars spent would have a greater return than can be realized and would be seen very quickly.
Mr. Carlson concurred with Senator Raggio's statement and said budget constraints are the problem.
Senator Raggio asked, "Do you have sufficient research within your agency to develop the kind of programs and materials necessary to develop these concepts and the information needed for these purposes?"
Mr. Carlson said as one of their budget enhancements, they asked for a research analyst to help them to do these things.
Senator Raggio asked if that position had been recommended in this budget, and Mr. Carlson said the position was not recommended.
Senator Rawson noted performance indicators projected $10 million for fiscal year 1992 for new sales tax deferrals and asked the Budget Division if they have computed the actual deferral amount.
Ms. Matteucci replied:
We have the information of what the old numbers are relative to the deferrals that had been granted. I can share that total number with you....The specifics as to who has the tax deferrals is confidential information but I can give you the total number...but there are no projections as to new tax deferrals, as I understand this performance indicator. As you know the Commission on Economic Development is responsible for granting that.
Senator O'Donnell arrived for the meeting at 8:50 a.m.
Motion Pictures - Page 593
Mr. Carlson presented an overview of this budget by reading from prepared text on pages 4 and 5 of Exhibit G.
Robert Hirsch, Director, Division of Motion Pictures, Commission on Economic Development, testified the division has been operating under a system of performance indicators for the last two fiscal years. In fiscal year 1990-1991, they projected 10 feature films and they actually did 31. They projected 12 television movies and 15 television series episodes but actually did 6 television movies and 33 episodes. The net value of production in all categories for fiscal year 1990-1991 was $64 million.
In fiscal year 1991-1992 they projected 11 feature films and actually did 24. They projected 12 television movies and 20 television series episodes and actually did 3 television movies and 58 episodes. The net value of production in all categories for fiscal year 1991-1992 was $76,900,000.
Mr. Hirsch continued his testimony by reading from prepared text, Exhibit H.
Senator O'Donnell mentioned that the amount of business the State of Nevada has been doing in television and film production
appears to be greater than other states yet the budget seems to be on the waning side. He believes the revenues from this endeavor could be higher if the budget were enhanced.
According to Mr. Hirsch, the reason the State of Nevada has had dramatic increases in revenue from film and television production is due to the unique atmosphere Nevada has to offer the movie industry and stated many pictures made here are not set in Nevada at all. Many companies will come to Nevada since they like the working conditions and the ambiance. Mr. Hirsch feels the production process is a logical extension of the tourism and gaming industry.
Sally Lear, Representative, Filmmaker's Association of Northern Nevada, introduced Moya Lear and Timothy Wilson, who are also members of the association, and told the committee they all wished to testify in support of the Division of Motion Pictures. She distributed a report (Exhibit I) to the committee which highlights the current state of the motion picture and television industry in Nevada. This report also identifies areas she believes critical to the continued growth of this industry and was generated with the input of a large number of Nevadans working in and affected by the motion picture industry.
Sally Lear said she has worked extensively in the movie industry in Nevada over the past 10 years and feels the economic growth this industry brings to Nevada is critical to the long-term health of the Silver State and the people who live and work here.
Moya Lear, Representative, Filmmaker's Association of Nevada, understands the arts are usually the last to receive adequate resources when there is a lack of available funds. However, she pointed out the movie industry brings the state a high return on its investment since the state receives $256 for every $1 spent on attracting this industry to Nevada. The movie, "The Disappearance of Nora", brought $1.9 million into the economy of Reno, and Mrs. Lear remarked this did not include the salaries of the producers and stars.
It takes work to attract, contact and maintain communications with movie companies, and Mrs. Lear stressed the Division of Motion Pictures needs additional assistance to keep up with the high-speed nature of the business. She referred the committee to page 3 of Exhibit I reflecting a proposed increase and breakdown of funds. She believed their funding request of $94,000 is reasonable due to the return the state will receive for its investment.
Timothy Wilson, Location Manager/Scout, Filmmaker's Association of Nevada, testified that above and beyond the dollars spent when productions come to this state, the promotional and advertising value inherent in these projects is considerable and perhaps immeasurable. Upon completion of the film, "Dances With Wolves", South Dakota tourism increased by 44 percent.
Mr. Wilson pointed out the television movie, "The Disappearance of Nora," which aired during the first week of March 1993, was ranked number 5 in the ratings and reached approximately 30 million television sets across the United States. This, he commented, was a 2-hour postcard for northern Nevada and cost the state nothing.
Based upon the return on the investment spent to this point and the promotional value this brings to the state, Mr. Wilson urged the committee to take a close look at the Division of Motion Pictures' budget and continue to encourage filmmakers to come to Nevada.
Rural Community Development - Page 598
The committee's attention was once again focused on page 5 of Exhibit G, and by reading from the prepared text Mr. Carlson continued to outline the highlights of this budget.
Small Business and Procurement Outreach - Page 508
Mr. Carlson testified this budget is funded through the United States Department of Defense funds, a transfer from the Community Services Energy Program and the General Fund. Programs under this budget are expected to be relocated to the Department of Business and Industry under the reorganization.
Mr. Carlson continued his testimony by reading from prepared text reflected in Exhibit G, pages 5 and 6.
In response to an inquiry by Senator Raggio concerning the utilization of funds contained in this budget, Ms. Matteucci remarked:
With the transfer of Low Income Housing Energy Assistance (LIHEA)...that has been ruled to be an ineligible expenditure....That is the underlying reason that [this budget] be transferred from the Commission on Economic Development. The focus of the small business program, because of the funding source, has to be on energy-related matters in order to be eligible for the transfer from the petroleum-rebate account. The emphasis this program has on energy is not particularly in keeping with the much broader scope of economic development and is one of the big reasons this program is being removed. The Governor also wanted to set this program aside from the Commission On Economic Development and establish it as its own entity.
Ms. Matteucci distributed Exhibit J to the committee that outlines the Small Business Revitalization Program, managed by the Procurement Outreach Program under the Commission on Economic Development.
Washington Office - Page 8
R. Leo Penne, Director, State of Nevada, Washington, D.C., Office, said in 1985 the establishment of a Washington, D.C., office was authorized to identify, monitor and provide information on federal issues of high priority to the State of Nevada. The office is funded by three agencies, the Commission on Economic Development, the Commission on Tourism and the Department of Transportation through a contract with the Governor's Office. For the record, Mr. Penne distributed Exhibit K, an overview statement that provides additional background information regarding the responsibilities associated with his office. This exhibit also contains a narrative of his budget request for the coming biennium which Mr. Penne covered with the committee.
With respect to the Enhancement category of the Governor's Executive Budget, Senator Raggio noted $19,000 had been proposed for the first year of the biennium and $30,000 for the second year of the biennium. He asked if this related to a cost-of-living increase of some kind.
Mr. Penne said there are three cost-of-living increases that are reflected in the total amounts proposed. The first is for salary increases of 2 percent for the director and 4 percent for each of the staff persons for each year of the biennium; the second is to cover an increase in health insurance and the third is to cover an increase in rental costs. Mr. Penne pointed out other costs related to labor increases have been absorbed by making adjustments in other items in the budget.
Senator Raggio called the committee's attention to the fact the narrative (Exhibit K) justifies the increases on the basis the office's activities are becoming more involved with highway-related issues. Senator Raggio further commented the Department of Transportation has two Washington contracts, the Washington, D.C., Office, and a Washington consultant or attorney. He asked why both contracts are necessary.
Garth F. Dull, Director, Department of Transportation (NDOT), replied his department has a contract with John Hassell, the former administrator of the Federal Highway Administration (FHWA).Mr. Hassell is their technician and is very familiar with how a bill moves through Congress. He is knowledgeable in all transportation aspects which helps NDOT analyze different situations and promotes that objective with Nevada's congressional delegation. Mr. Penne acts more as a generalist and helps NDOT communicate the "big picture" to the congressional delegation as well as develop strategies for implementing that plan.
Mr. Dull remarked:
Mr. Penne works with many other states that have a common interest and as a direct result of this when the 1992 Intermodal Surface Transportation Efficiency Act (ISTEA) was passed, NDOT was able to have a very favorable distribution formula for Nevada. As a result of this one act alone, we get about $1.33 back for every $1 we contribute. That does not address the many millions of additional funds that we have received as a result of the ongoing efforts of our Washington, D.C., Office, and our consultant there. Since this bill was passed we have acquired about $110 million over and above the basic apportionment formula.
Mr. Dull commented there are many other ongoing aspects of ISTEA the department has to monitor very closely and one of them is the National Highway System. Nevada is pushing very strongly for this system which must be approved by Congress by 1994. In effect all states get their money by the ISTEA program which would mean there would be no oversight and very little rationale of the National Highway System. Mr. Dull believes if implemented the National Highway System will be a funding mechanism in itself similar to what the interstate program was when it was passed in 1956.
Senator Raggio asked Mr. Dull if he was able to justify to the committee the additional payment that is being recommended in this budget from highway funding. He remarked the committee is concerned because the question always arises as to whether highway trust funds are being used appropriately.
Mr. Dull believed the money that is being paid by NDOT to the Washington, D.C., Office, and their consultant is very modest in comparison to the return they are getting.
Mr. Penne distributed to the committee Exhibit L, a one-page table which shows highway funding to Nevada over the past 4 years; Exhibit M, an explanation of the work that goes into securing highway funding to the state; and Exhibit N, a letter to Governor Miller from the director of the National Governors Association.
Senator Raggio asked if there was a strong likelihood funding would be available for the extension of U.S. 395 south of Reno, and Mr. Dull responded NDOT has most of the funds obligated this year to extend this portion of the highway possibly as far as the Mount Rose Highway. They expect to advertise for the U.S.395 extension and award bids before the end of September 1993.
Glenn Van Roekel, Director of Community Development, City of Caliente, Nevada, wished to voice his support of the State of Nevada Office in Washington, D.C., which he believes is effectively operated by Mr. Penne. His written testimony (Exhibit O) was read for the record.
Donald Schmanski, Chairman, Carsonite International, Carson City, Nevada, testified in support of the Washington, D.C., Office, which he believes to be a very valuable resource for economic development. He remarked that he worked with Mr. Penne for approximately 6 years and this resulted in about $3 million in additional business for his company. He is now working on a project that will result in 130 new jobs in this area with a total sales volume exceeding $100 million. Mr. Schmanski stated he could not have accomplished this without the assistance of Mr. Penne.
In response to Senator Raggio's inquiry regarding the nature of his business, Mr. Schmanski said his company is a supplier of a wide variety of products to the NDOT, utility companies, and the telecommunication industry. Mr. Penne helped his firm in the development of a product that has been accepted throughout the United States to improve accessibility for blind people in accordance with the Americans with Disabilities Act (ADA). This has resulted in a very significant increase in business and revenue for his company.
Jeff Griffin, President, Griffin Transport Services, Inc., Sparks, Nevada, expressed his support of Mr. Penne and his office in Washington, D.C., and said his business deals with international transportation and trade.
In addition to his business, Mr. Griffin is involved in a number of civic activities of interest to the Washington, D.C., Office, and the committee. He is the President of the Nevada World Trade Council and President of the Advisory Board for the Center of Logistics Management at the University of Nevada, Reno. In all of his activities, Mr. Penne's office has been instrumental in providing input on their conduct in Washington, D.C., and providing detailed appointments and schedules of specific interest. Mr. Griffin commented his experience with Mr. Penne's office has
always been outstanding.
Senator Raggio advised the committee they should turn their attention once again to the budget for the Commission on Tourism discussed earlier by Lieutenant Governor Sue Wagner.
Commission on Tourism - Page 602
Thomas Tait, Executive Director, Division of Tourism, Commission on Tourism, stated the commission is a room tax-based agency. The room tax shortfall that occurred in the last biennium as a result of the war in the Persian Gulf followed by the recession in the State of California resulted in a 2.52 percentage increase in room tax revenue compared to an 8.75 rate projected during the last session of the legislature. They have had to scale back considerably from their work program in the last biennium that has resulted in reductions in just about all of their budget areas but specifically in the marketing, promotions and advertising categories.
Mr. Tait is requesting a return to the work program levels of 1992-1993 based on the now expanding room tax levels that will allow the commission to do this. In their expanded budget request, Mr. Tait wishes approval of a new program called the Nevada Passport or Nevada Bonus Book Program that will allow an infusion of a program directly into rural Nevada that will provide some interest to the residents of the larger more populated cities of Nevada to vacation or visit the rural areas of their state. As the commission understands how the operation of the program will work, they hope to expand this program into regional areas and the international market place.
Senator Raggio asked if the commission will be adding two new positions for the Nevada Passport and related activities, and Mr. Tait responded in the affirmative.
Senator Raggio noted the commission presently has about $425,000 scheduled for the rural matching grant program with an additional $25,000 the first year of the biennium and $80,000 the second year of the biennium, and asked if there is any concern room tax revenues would not be available to accommodate this budget.
Mr. Tait answered his office has programmed an increase of 4.5 percent for the next fiscal year and a 5 percent increase for the following year based on their prediction that growth in Las Vegas and renovation of hotels in the Reno area will stimulate the kind of visitation they will need to meet the goals.
Nevada Magazine - Page 607
Richard Moreno, Editor/Publisher, Division of Publications (Nevada Magazine), Commission on Tourism, said the Nevada Magazine has a per issue distribution of 117,000 copies and Nevada Events, a 40-page insert outlining material of direct interest to visitors, including events and entertainment, has an estimated distribution of 170,000 copies. Nevada Magazine is the major publication of his division and has been recommended to remain with the Commission on Tourism under the Governor's reorganization plan.
Mr. Moreno continued his testimony by reading Exhibit P to the committee. He also distributed Exhibit Q, "Facts About Nevada Magazine" for the committee's review.
Senator Raggio referred to the performance indicators and asked if the division anticipated a decline in paid subscriptions.
Mr. Moreno replied his office had purchased a subscription list from the American West magazine last year and the performance indicators include the subscribers for this magazine under total paid subscriptions. The division expects a drop in the number of subscribers for the American West magazine only.
Senator Glomb asked if the State Printing and Micrographics Division does the printing of the Nevada Magazine, and Mr. Moreno answered in the negative stating they go out for bid under a contract process they do once every 2 years.
Senator O'Donnell commented the Nevada Magazine is an excellent magazine in terms of selling the State of Nevada and asked what kind of arrangements have been made with the various airlines that serve the airports in Nevada to include this magazine at each passenger seat.
Mr. Moreno responded the division has a very active transportation program. They have a proposal pending at the current time with Southwest Airlines to place Nevada Magazine in their airplanes. They have also submitted a similar proposal to America West Airlines but have not yet had a response from them. Nevada Magazine was the flight magazine for the first 6 months of Reno Air's operation until the airline decided they wanted to start their own magazine, probably due to a "kickback" on the percentage of the advertising received from an airline's specific magazine. The division currently does supply Reno Air with 500 copies of every issue of Nevada Magazine that are placed in overhead bins, but the magazine is no longer placed in the seat-back compartment.
On a more positive note, Mr. Moreno said Nevada Magazine is now located in the seat-back compartment for Air Vegas, Las Vegas Airlines and a new airline, Family Air. In the north they are working with Alpha Air, an airline servicing Lake Tahoe. Additionally, the magazine is now in the back of the seats in motor coaches such as Gray Line of southern and northern Nevada.
Senator Raggio adjourned the meeting at 10:40 a.m.
RESPECTFULLY SUBMITTED:
Marion Entrekin,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
??
Senate Committee on Finance
March 18, 1993
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