MINUTES OF THE

      SENATE COMMITTEE ON FINANCE

 

      Sixty-seventh Session

      April 2, 1993

 

 

 

The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:04 a.m., on Friday, April 2, 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 Lawrence E. Jacobsen

Senator Bob Coffin

Senator William R. O'Donnell

Senator Matthew Q. Callister

 

COMMITTEE MEMBERS ABSENT:

 

Senator Raymond D. Rawson, Vice Chairman (Excused)

Senator Diana M. Glomb (Excused)

 

STAFF MEMBERS PRESENT:

 

Daniel G. Miles, Fiscal Analyst

Robert Guernsey, Principal Deputy Fiscal Analyst

Jeanne Botts, Program Analyst

Joan McConnell, Committee Secretary

 

OTHERS PRESENT:

 

John W. James, State Climatologist, Office of the State              Climatologist

Don Hataway, Chief Assistant Budget Administrator, Budget Division,    Department of Administration

Judy Matteucci, Director, Department of Administration

Dr. Eugene T. Paslov, Superintendent of Public Instruction, State    Department of Education

Douglas Thunder, Director, Fiscal Services, State Department of      Education

Dr. Mary Nebgen, Superintendent, Washoe County School District

Elaine Lancaster, President, Washoe County Teachers Association

Michael R. Alastuey, Lobbyist, Clark County School District

John Cummings, Lobbyist, Nevada State Education Association (NSEA)

Marcia Bandera, Elko County School District

Ron Nagel, Superintendent, Lyon County School District

 

Senator Raggio stated Senate Bill (S.B.) 221 was mis-referred to the Senate Committee on Finance and should have been referred to the Senate Committee on Government Affairs.

 

SENATE BILL 221:  Revises manner in which salaries of county sheriffs are calculated.

 

      SENATOR JACOBSEN MOVED TO RE-REFER S.B. 221 TO THE SENATE COMMITTEE ON GOVERNMENT AFFAIRS.

 

      SENATOR CALLISTER SECONDED THE MOTION.

 

      THE MOTION CARRIED.  (SENATORS RAWSON AND GLOMB WERE ABSENT FOR THE VOTE.)

 

      * * * * *

 

 

 

Senator Raggio had three bill draft requests (BDRs) for committee introduction:

 

BILL DRAFT REQUEST 31-1888:      Authorizes temporary advance from state general fund for authorized expenses of Nevada equal rights commission.

 

      SENATOR O'DONNELL MOVED TO INTRODUCE BDR 31-1888.

 

      SENATOR JACOBSEN SECONDED THE MOTION.

 

      THE MOTION CARRIED.  (SENATORS RAWSON AND GLOMB WERE ABSENT FOR THE VOTE.)

 

      * * * * *

 

BILL DRAFT REQUEST 18-1797:      Establishes office of science, engineering and technology within the commission on economic development.

 

      SENATOR COFFIN MOVED TO INTRODUCE BDR 18-1797.

 

      SENATOR O'DONNELL SECONDED THE MOTION.

 

      THE MOTION CARRIED.  (SENATORS RAWSON AND GLOMB WERE ABSENT FOR THE VOTE.)

 

      * * * * *

 

BILL DRAFT REQUEST 23-1883:   Provides in skeleton form for revision of state personnel system.

 

      SENATOR O'DONNELL MOVED TO INTRODUCE BDR 23-1883.

 

      SENATOR CALLISTER SECONDED THE MOTION.

 

      THE MOTION CARRIED.  (SENATORS RAWSON AND GLOMB WERE ABSENT FOR THE VOTE.)

 

      * * * * *

 

Senator Raggio received the amendment to S.B. 274 which had been heard March 29, 1993, and was voted to amend and do pass.  Senator Raggio asked the committee to check the amendment.

 

SENATE BILL 274:  Transfers responsibility for administration of account for aid for victims of domestic violence.

 

Senator Raggio said no action was necessary as the amendment was passed by the committee on March 29, 1993.

 

State Climatologist - Page 1703

 

John W. James, State Climatologist, Office of the State Climatologist, testified to enlist the committee's support for his budget, because the Governor's office has eliminated all funding for the State Climatologist position.  He provided samples of services performed by the state climatologist's office, and a list of the type of calls they receive (Exhibit C), many curious as to the climate before moving their place of business to the State of Nevada.

 

 

 

Senator Coffin asked if Mr. James had been contacted prior to the construction of the budget and told his quarter-time position was going to be eliminated.

 

Mr. James replied he was informed his position was being eliminated last fall.

 

Senator Coffin commented the Department of Natural Resources is to assume the responsibilities of the climatologist under the reorganization plan.  He asked who in the Department of Natural Resources will be taking on the responsibility.

 

Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration, replied the Division of Water Resources is supposed to take the responsibility of the climatologist's office.  The new director would have to determine how the performance of the climatologist's duties would be provided.

 

Judy Matteucci, Director, Department of Administration, stated the Division of Water Resources was the most likely division to pick up the duties of the climatologist.

 

Mr. James stated the State Department of Conservation and Natural Resources does not have access to all the data he has access to, and there is no one in the state offices at this point who is a climatologist.

 

Senator Callister was concerned that people calling in for climate information would not be responded to as quickly as they are now if there was not a state climatologist, especially those calls from potential new employers moving to the State of Nevada.

 

Ms. Matteucci commented, ...if you decide that this [climatologist budget] is a higher priority expenditure, and it's that valuable, then certainly it should be added back by the legislature."

 

Senator Raggio remarked that the water resources budget has been very seriously constrained and felt they would have a difficult time performing their own functions without adding the responsi-bility of the climatologist's duties. 

 

Senator Raggio opened the hearing on Senate Bill (S.B.) 329.

 

SENATE BILL 329:  Makes supplemental appropriation to state distributive school account.

 

Ms. Matteucci stated S.B. 329 would do a couple of things relative to finding the money necessary to make the state distributive school account whole.  She submitted a copy of budget 101-2610 (Exhibit D), Distributive School Fund - Continued, and General Fund Unappropriated Balances, Estimated Budget Reductions, and a summary of the 92/93 budget cuts reduction plan (Exhibit E).  She mentioned the Distributive School Account has no money in it as of this date, which makes it urgent to consider the supplemental appropriation in order to pay the last quarterly obligations of the state.  Discussion ensued.

 

Senator Coffin wanted to know how much cash is in the General Fund as of this date, knowing the cash balance changes daily.  He remembered conflicting testimony at the beginning of the session between the controller and treasurer on one side and the budget office on the other, regarding the gravity of the problem at that time, and it was never reconciled in his mind.

 

 

 

Ms. Matteucci advised Senator Coffin of the current General Fund balance today of $87,598,000.

 

The committee was referred to an amended Fiscal Note (Exhibit F) prepared March 30, 1993.

 

Dr. Eugene T. Paslov, Superintendent of Public Instruction, State  Department of Education, stated the Governor has spoken with the school district representatives on two separate occasions.  For Fiscal Year 1992 the Governor asked the school districts to cooperate and set aside $2 million, or 2 percent of the Fiscal Year 1992 per pupil.  The districts did that and set the amount aside in a reserve account in their ending-fund balance.  He met again with the superintendents and asked them to voluntarily reduce their expenditures to approximately $15 million.  He did not specify how the superintendents would do that.

 

It was left up to the local superintendents and to the local boards of trustees.  He added an analysis was done of what that would represent for each of the school districts in terms of total dollar amounts.  He provided a handout, an historical perspective on the per-pupil support guarantee in the distributive school account (Exhibit G).  He commented, "We are very clear about the need for S.B. 329, the need for the supplemental and the need for the reductions as specified in this bill."

 

Douglas Thunder, Director, Fiscal Services, State Department of    Education, commented it had been noted Washoe County was the only district not to cooperate, and that is incorrect.  He stated all the districts fully cooperated.

 

Dr. Mary Nebgen, Superintendent, Washoe County School District, stated:

 

      In February of 1992, Mr. [Scott M.] Craigie [Chief of Staff, Governor's Office] met with the county superintendents of schools and requested on behalf of the Governor that we voluntarily reserve 2 percent of our distributive school account appropriation for the 1991-92 school year.  He indicated that the state's economic condition was such that we could not be guaranteed the amount that had been legislatively appropriated.  For Washoe County School District that 2 percent reserve was $586,000.  We did as the Governor asked.

 

      We immediately froze all non-school based vacant positions beginning in February.  In April we froze all but absolutely essential expenditures.  In late June of 1992 the Governor again requested the superintendents reserve a portion of their DSA [District School Account] in 1992-93.  This time 5 percent.  For Washoe County that was $2.6 million.  This was more difficult to do.  We cut supplies, materials, staff in service, field trips, and central office support positions.

 

      We have felt the impact of those budget reductions all of this year.  Teachers have always bought their own supplies for the classroom, but they certainly had to do more of it this year as our school supply budgets were cut 20 percent.  All of our department budgets were cut 30 percent.  I have booster clubs raising funds to buy wax for custodians.  Our in-service opportunities have been almost eliminated.

 

 

      S.B. 329 was expected.  We appreciate the advance warning the Governor gave to all of the school districts.  I

      would like to say don't vote for this, but I know if you don't take this deficit from school districts some other agency, who has suffered more severe cuts over the last biennium, will have to take a further reduction.

 

      However you decide to act, I would urge you to do so with some expediency.  We did not quite achieve the 5 percent cut.  We are about $765,000 short.

 

Dr. Nebgen said a work furlough had been suggested for all employees to take half a day off for 3 days.  It would make up the $765,000 shortage, which is what the board chose to vote for.

 

Senator Raggio asked Ms. Matteucci how the figure of $3,231 per pupil was determined.

 

Ms. Matteucci stated the budget office began working on the amount necessary to be reverted from the school districts, which is the only way the money can be put back into the General Fund.  The budget office came up with an amount equal to an $18 million reduction to $3,226 per pupil, achieving all but about $1.1 million in savings distributed across each one of the school districts.  Clark County chose to do some of their reductions differently, by reducing their adult basic support guarantee, which increased the amount of the average basic support guarantee.  The budget for the next biennium is recommended at $3,312 per pupil.

 

Senator Raggio commented the public should be aware that the distributive school account is the only budget which does not take a budget cut as its base for the new biennium.

 

Elaine Lancaster, President, Washoe County Teachers Association, read from written testimony (Exhibit H).

 

Senator O'Donnell asked about teachers' personal expenditures regarding supplies needed in the classroom.

 

Ms. Lancaster replied the teachers are spending an average of about $1,000 a year in the classroom and can go as high as $2,500 in the high school science and math areas.

 

Senator Callister questioned the legality of the teachers taking a furlough of 3 half-day sessions and wondered if it would affect their benefits.

 

Dr. Nebgen stated the Nevada Administrative Code calls for a certain number of school days in session.  The idea was it would be a minimum day for the students, called a short day in session in the administrative code, which is two-thirds of a regular day.  The students and the employees would leave at lunchtime.  The code also says a short day in session can be called by a board of trustees occasionally, and also can be called by the superintendent if the board of trustees has delegated that authority in writing to that individual.

 

Ms. Lancaster remarked the 3 half-days is a subject of negotia-tions.

 

Dr. Paslov commented short days in session  have been dealt with before without any difficulty.

 

Senator Callister addressed Ms. Matteucci and asked what happens if the prison capacity act is not adopted.  What impact would that

 

have on the ability to reach the $3,312 per pupil again?

 

Ms. Matteucci responded if the Facilities Capacity Act is not enacted, and the legislature finds it necessary to open all the facilities proposed to be closed, not just the honor camps but Lovelock and some form of a women's prison to meet their capacity, there would be an additional expenditure necessary in the budget of $47 million, which is not available.  The choice would then be whether the legislature should do their own form of budget

reductions or select some form of revenue enhancement to make up the difference.

 

Ms. Matteucci mentioned education is the single largest expenditure in the General Fund budget.

 

Senator Callister asked, "Hasn't the administration very clearly then pitted incarceration versus education in terms of the next budget cycle?"

 

Ms. Matteucci said she would not term it that way.  She stated the administration had some very difficult decisions to make.

 

Senator Raggio directed the committee back to the merits of S.B. 329.

 

Senator Coffin remarked he was tending not to support S.B. 329, until he hears some "leadership" on the issue, perhaps taxes to fund the school systems.

 

Michael R. Alastuey, Lobbyist, Clark County School District, stated:

 

      It would have been our hope that the state would not have been in a position to introduce and consider such a bill [S.B. 329].  However, recognizing the early contact that we did receive from the Governor's staff, through the budget office and his own office, we did take measures early on in an attempt to prepare for such a contingency should it occur.

 

      Our cuts of approximate $10.8 million over the 2 years ...is proposed...to take place through a combination of general per-pupil support and reduction in the adult high school diploma program.  We have also taken a number of additional cuts, about $3.3 million, in general non-salary reduction, mostly equipment supply related to central operations.  We have not adversely affected our school supply budgets within the school.  We have reduced our motor fleet.  We have achieved about $1.1 million by eliminating an in-house suspension program which was begun earlier with special state funds.  We have cut about $1.8 million out of our facilities and transporta-tion operations, as well as other reductions.

 

Mr. Alastuey said current plans do not include a furlough, and it is hoped to be avoided.  He added, should there be a restoration in the economy during this biennium, or in the future, it is hoped the vision of the legislature be focused on a way to restore school districts and other entities who have had to share in the shortfall.

 

Senator Raggio noted the basic per-pupil support for Washoe County, with the exception of Eureka County, is the lowest in the state, $3,048 per pupil, which may explain why Washoe County is having a difficult time meeting the reduction.

 

 

 

John Cummings, Lobbyist, Nevada State Education Association (NSEA), testified in opposition to S.B. 329, but said, "Sacrifice it, pass it, you don't have another choice, and that's a shame."

 

Senator Raggio, while sympathetic, stated, "Our situation is far less grave than most of the states I have had any discussions with."  He remarked the Nevada plan is highly defensible.  An article in a recent Time magazine outlined the plight of schools throughout the country.  He added, "I don't think there is anybody in the legislature who does not accept education, and certainly K [kindergarten] through [grade] 12 as his or her highest priority."

 

Marcia Bandera, Elko County School District, stated Elko County School District's share of the contribution back to the state is $813,000, which has been set aside, by extracting certain planned activities and stopping certain projects.  She added, by the time the books are closed this year, if S.B. 329 passes, the Elko County School District will have lost close to $1.1 million of missing revenue for this year, which will be a hardship.

 

Ron Nagel, Superintendent, Lyon County School District, said S.B. 329 will affect the Lyon County School District by $452,000, which is held in reserve.  Their reductions consist of freezing staff hirings, curtailing some projects, freezing equipment, reducing site-level budgets, eliminating out-of-state travel, eliminating substitute teachers except in the case of illnesses, eliminating all overtime, reducing central office budgets, eliminating field trips, reducing the amount spent on transportation for students, especially in athletics, eliminating or reducing contracts, extra-duty contracts where possible, and this year the central office administration was reduced by 20 percent.  He added, "This bill (S.B. 329) does significantly affect our county."

 

Mr. Nagel advised the Lyon County School District's enrollment has increased by 200 students a year.

 

Senator Raggio closed the hearing on S.B. 329.  No action was taken.

 

Senator Raggio read a letter from Gary Crews, Legislative Auditor, (Exhibit I) regarding the amendment to S.B. 276.

 

SENATE BILL 276:  Authorizes transfer of money from offenders' store fund to prisoners' personal property fund.

 

      SENATOR O'DONNELL MOVED TO AMEND AND DO PASS S.B. 276 AS INDICATED.

 

      SENATOR JACOBSEN SECONDED THE MOTION.

 

      THE MOTION CARRIED.  (SENATORS RAWSON AND GLOMB WERE ABSENT FOR THE VOTE.)

 

      * * * * *

 

Senator Raggio suggested sending a letter of intent to the Department of Prisons expressing the comments of the auditor.

 

 

 

 

 

 

 

There being no further business before the committee, Senator Raggio adjourned the meeting at 9:54 a.m.

 

                                                RESPECTFULLY SUBMITTED:

 

 

 

                                                                        

                                                Joan McConnell,

                                                Committee Secretary

 

 

 

APPROVED BY:

 

 

 

 

                                    

Senator William J. Raggio, Chairman

 

 

DATE:                              

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Senate Committee on Finance

April 2, 1993

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