MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
April 6, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:16 a.m., on Tuesday, April 6, 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 M. Glomb
Senator William R. O'Donnell
Senator Matthew Q. Callister
STAFF MEMBERS PRESENT:
Daniel G. Miles, Fiscal Analyst
Robert Guernsey, Principal Deputy Fiscal Analyst
Jeanne Botts, Program Analyst
Joan McConnell, Committee Secretary
OTHERS PRESENT:
Dr. Eugene T. Paslov, Superintendent of Public Instruction, State Department of Education
Mary L. Peterson, Acting Deputy Superintendent for Instructional, Research and Evaluative Services, State Department of Education
Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration
Douglas Thunder, Director, Fiscal Services, State Department of Education
Ruth Aberasturi, Supervisor, Student Support Services, Carson City School District
Jean Baecher-Brown, Director, Nutrition Education, Department of Education
Senator Raggio referred to Senate Bill (S.B.) 84, which was heard on March 29, 1993.
SENATE BILL 84: Makes order for payment of money belonging to school district void if not presented for payment within certain time after issuance.
Amendment No. 205 to S.B. 84 was received, reviewed and approved by the committee that it conformed to the committee's previous action of amend and do pass.
Senator Raggio explained the budget hearings that pertain to the Department of Education are scheduled for today. He added:
As you know, the Governor's recommended budget combined the existing Department of Education with the Department of Health and Human Services into one department.
We asked the Department of Education also to present some revised budgets in the event the decision was to reform this and have a separate Department of Education.
I would like to get an expression from the committee at this time as to the feeling of this committee on either the combining of the Department of Education, as recommended by the Governor, or as to whether or not the Department of Education should stand as a separate department.
Senator Glomb said, "My feeling right now is that it should be a separate department. I don't agree with the combination."
Senator Callister replied, "The same."
Senator Coffin stated, "If there are no significant savings, I would be opposed to the merger of the two."
Senator Rawson commented, "I think it should be separate...I think we can do a better job if we keep them separate."
Senator Jacobsen remarked, "I like it just like it is, separate."
Senator O'Donnell concurred:
I am in favor of separating the two...the education department does not belong under the purview of the human resources department, and secondly the audit committee is hearing some audits tomorrow, about a $3 million impropriety in the human resources department. I'm not sure I want the human resources department controlling the education funds.
Senator Raggio stated:
The chair would agree it would be preferable to maintain the [State] Department of Education as a separate department. This is not necessarily binding at this point, but it's an expression of this committee. With that in mind, we are going to look at the proposed budgets that have been presented to us by the [State] Department of Education. You have a binder with revised budgets (Exhibit C. Original is on file in the Research Library.) before you, containing various options. We're going to proceed on that basis.
Education Support Services - Page 624
Senator Raggio decided to use the analysis (Exhibit D) Dr. Paslov prepared, at the request of this committee, as a guide.
Dr. Eugene T. Paslov, Superintendent of Public Instruction, State Department of Education, read from written testimony (Exhibit E).
Education State Programs - Page 637
Mary L. Peterson, Acting Deputy Superintendent for Instructional, Research and Evaluative Services, State Department of Education, read pages 1 through 5 from Exhibit D. Discussion ensued.
Senator Glomb, referring to Option #2 regarding textbook review and approval being jeopardized, asked, "Don't local school districts do that on their own?"
Mrs. Peterson responded school districts review textbooks at the local school district level and make recommendations to Instruc-tional, Research and Evaluative Services for review, which then takes the recommendations to the State Board of Education. She added, "We also do statewide contracting to reduce the price of those textbooks." She added Option #2 would delete the activities previously conducted by library consultants, consulting services to local school libraries would no longer be available, and activities related to textbook review and selection would also be deleted.
Mrs. Peterson proceeded to review Option #3 and Option #4, page 5 of Exhibit D. Discussion ensued.
Senator Glomb wondered if there are funds allocated in the human resources budget, under the Governor's recommendation, to assume any of the State Department of Education's functions.
Jeanne Botts, Program Analyst, stated Option #4 is the State Department of Education's suggestion for operating independently and does not assume that any duties would be performed by human resources. In the Governor's recommended budget both deputies are eliminated and there is a chief of instruction. Option #4 proposes instead of the new chief of instruction, retaining the deputy of instruction, which is why the cost is only $1,285 the first year and $3,116 the second year of the biennium.
Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration, commented there is no money shift from the State Department of Education to the Department of Human Resources budget account.
Senator Glomb asked how some of the current responsibilities of the State Department of Education are suggested to be covered with the reductions in the budget.
Mr. Hataway replied the Budget Division looked at the total staffing levels of the department in relation to the duties described and not on each individual position and the duties they were currently handling. He added the staffing levels recommended by the Budget Division were deemed adequate.
Mrs. Peterson said several other western states were surveyed. Montana, with a student enrollment of 160,000 statewide, has 140 FTEs (Full Time Equivalencies). In Idaho, which is most comparable to the State of Nevada, there are approximately 230,000 students, and the state has approximately 115 people in their department of education. In Nevada there are 220,000 students and approximately 90 positions in the State Department of Education.
Douglas Thunder, Director, Fiscal Services, State Department of Education, referred to a previous remark referring to performance indicators and making judgments on the basis of whether some positions are needed. He pointed out the performance indicators are not particularly those the department would have chosen to use. They are very subjective, limited to a very few per budget account.
Senator Raggio invited Mr. Thunder to present more appropriate performance indicators to the committee at this time, during deliberations and for future use in the budget.
Mr. Hataway referred to Option #4, looking at the total clerical staff support available throughout the State Department of Education. The university system works off a 5 to 1 ratio for classified to professional staff. On a statewide average it is more like 3 to 1 within the executive branch. He felt the State Department of Education has adequate clerical staff and feels the Management II position recommended for deletion is justified. He added the proposed move of the director to federal funding is not illegal in the Budget Division's opinion.
Dr. Paslov recalled appearing before the Senate Committee on Finance in 1987 and asking for $325,000 of General Fund to pay back a 10-year-old audit exception. It was not only the cost allocation, it was the use of federal dollars for state purposes which brought the amount to almost $900,000 and eventually was reduced.
Senator O'Donnell asked Mr. Hataway if the alternative is not to go with the Governor Recommends, which is the consolidation of both departments.
Mr. Hataway said there are both macro and micro recommendations for reorganization. He added:
You have made a basic decision to not combine the two departments [State Department of Education and Department of Human Resources]. That does not change many of the other recommendations we are proposing to you for your consideration. It has to do with reorganization of the department itself, whether it is a division of another department or a stand-alone department.
Mr. Hataway handed out an outline of the State Department of Education organization pre-fiscal year 1992, currently, and proposed (Exhibit F). He stated the only change would be that the education support services, currently proposed to be under the administrative services division of that combined department, would move back adjacent to and under the jurisdiction of the super-intendent.
Senator Raggio queried, "You are indicating that even under Option #4 funding they [State Department of Education] would have the ability to perform the functions suggested as being functions that would otherwise be jeopardized?"
Mr. Hataway replied:
When you look at the number of clerical personnel they [State Department of Education] had, yes, indeed I think that will happen. On the director position, it's not going to go away. We're merely talking about whether it's going to be funded by general appropriation or federal funds.
Senator Raggio requested an opinion from either the attorney general, or someone who will aid the committee in accepting that proposal.
Ms. Botts stated currently there is the director of Elementary and Secondary Education in the state-funded budget, and there is a director of federal programs in Chapter I. A few of the other federal programs are assessed a small amount to help support the director of federal programs: the drug abuse program, AIDS education, English as a second language, teacher training and discretionary grants.
Ms. Botts remarked Mr. Hataway said he would also move the director of Elementary and Secondary Education into Chapter I, and if there needed to be some transfers from other accounts to equal that person's work load, it could be done. She asked, "Does the director of Elementary and Secondary Education do Chapter I work now?"
Dr. Paslov replied, "No."
Teacher Education and Licensing - Page 709
Mrs. Peterson referred the committee to page 21 of Exhibit C and page 6 of Exhibit D. A brief discussion ensued.
Proficiency Testing - Page 703
Mrs. Peterson referred the committee to page 18 of Exhibit C and page 7 of Exhibit D, and stated the Governor's recommended levels for this budget account were basically accepted, but pointed out the program still remains underfunded. She asked, if additional revenue does become available, that additional funding be designated for the development of new tests and proficiency testing, and/or revision of the currently used tests, which are about 5 or 6 years old. The estimated cost of the revision would be $143,778 for FY 94 and $159,080 for FY 95.
Dr. Paslov said some modifications in the tests were made about 3 years ago.
Education of Handicapped Persons - Page 679
Mrs. Peterson referred the committee to page 3 of Exhibit C and read pages 8 and 9 of Exhibit D.
Ruth Aberasturi, Supervisor, Student Support Services, Carson City School District, today representing the State Advisory Commission on Special Education, distributed a copy of a letter she wrote to Ms. Brown (Exhibit G), expressing her concern regarding placing a portion of the federal special education funds in a reserve account. She stated there is a continual shortfall in funding in each district to provide special education needs.
Ms. Aberasturi stated the ability to access the special project money, most of which has been put in the reserve account, makes a tremendous difference to the local school districts in the state. It provides needed support. It helps the General Fund money that is needed by the local school districts in providing for all the different programs needed.
Mr. Hataway said there are three accounts with reserve dollars set aside in the special education accounts, one of which is this particular account. There is $150,000 in each year of the biennium reserved. If alternate programs cannot be presented to the committee prior to closing, a transfer could be made into the aid-to-school category. Once the $150,000 is removed, the federal amount remaining in FY 94 represents the sum of the 2 years worth of appropriation the Budget Division is recommending, while trying to stretch the General Fund dollars in these tight times. If the dollars are not needed, then the federal funding would be available to be transferred to aid-to-schools.
Dr. Paslov said the analysis done by the State Department of Education is done based on historical trends. One or two trauma cases could increase costs up to $1 million.
Ms. Botts referred to page 212 of the booklet "Responses from the Department of Education to Questions of the Joint Committees of Senate Finance and Assembly Ways and Means" (Exhibit H. Original is on file in the Research Library.), which contains Mr. Hataway's response regarding the use of the federal money for education of the handicapped that is being held in reserve by the Budget Division. She asked, "Is the Budget Division disagreeing with the State Department of Education's position that these dollars have to be matched one to one if they are used for direct services."
Mr. Hataway said it was his understanding there is a one-to-one match at the state level.
Adult Basic Education - Page 699
Mr. Thunder referred the committee to pages 12 and 13 of Exhibit C and read pages 10 and 11 of Exhibit D. He stated, at the time the explanation was done on page 10 of Exhibit D, he was not aware the community colleges have to meet 25 percent of the federal dollars received through the state, or they have to meet the same amount they contributed last year. In FY 92 the amount of money contributed by the community colleges for this program was about $365,000. He added, "So, when we talk about local match requirements in our options, we are talking about an additional match to help meet the state match requirements."
Mr. Thunder continued to read the options on pages 10 and 11 of Exhibit D.
Senator Glomb asked if the local match money the community colleges would put forth is General Fund money.
Mr. Thunder assumed the money would come from the colleges' general fund, not necessarily state General Fund money. The community colleges contribute 25 percent or at least the amount they contributed last year which could be in excess of 25 percent.
Mr. Hataway said there are two elements. One, the budget is based upon an estimate of what federal revenues are going to be at the time, and then whatever the combination of match money reflected is based upon that. If there is a known additional amount there would have to be some dollars added to address that. He stated the whole area of federal funding for education is under transition. Two, the amount of appropriation recommended in the budget is directly taken from the department's recommendations given to them in order to make their target appropriations.
Nutrition Programs - Page 689
Mr. Thunder stated this budget is very largely federally funded. He referred to page 12 of Exhibit D and discussion of Option #1 and Option #2 ensued.
Senator Raggio asked if the local school districts are required to make up the difference in funds due to the reductions in the budget set by the Governor Recommends in Option #2.
Jean Baecher-Brown, Director, Nutrition Education, State Department of Education, remarked the school districts currently are making all of the state match money which is $588,732. A survey was done recently, and actual funds have been put in and projection shows the state match will be met. Clark County School District has reduced the amount they put into the programs over the last two years. There is nothing in the statutes saying the money has to be put in. The law reads that the state match may be met through direct state appropriation or through local funds.
Senator Raggio asked if Option #2 would continue the present situation where the school districts are contributing a part of the match.
Ms. Baecher-Brown replied, "Yes."
Mr. Hataway agreed with Ms. Baecher-Brown.
Ms. Botts commented:
The level of state funding for this program has been at $324,500 for a number of years. The Governor recommends a lower amount. All along the school districts have been providing a part of the match to meet a required match of about $588,000 or $600,000. The Governor Recommends requires districts to pick up an additional part of this match. There is language in the school funding bill every session that authorizes school districts to use some of the distributive school account monies in support of this program...but they are not required to.
Dr. Paslov stated this program is an award-winning program throughout all of the states in terms of its nutrition education efforts. The program is staffed by an extremely small, efficient, well-trained registered dieticians, most of whom have MA degrees plus their other professional credentials.
Occupational Education - Page 694
Mr. Thunder read page 13 of Exhibit D. Discussion ensued.
Mr. Hataway said because the position of one FTE consultant had remained vacant for some time, the Governor recommended elimination of the position, however the position authorization is there in anticipation of any reorganization efforts that may done.
Senator Raggio encouraged discussion on pages 14, 15 and 16 of Exhibit D, Issues Involving Non-State Funded Accounts.
Mrs. Peterson stated the first issue has to do with rent of office facilities. She read from page 14, Exhibit D. She mentioned if a savings is achieved by moving it should be reflected as a rental savings instead of a reorganization savings.
Mr. Thunder referred to page 15 of Exhibit D, Budget Accounts Proposed to Be Placed in Other Agencies. Among those listed were:
Drug Abuse Education - Page 856
School Health Education - AIDS - Page 861
Job Training Partnership Act - Page 1070
Discussion ensued regarding page 15, Exhibit D, Rationale for Reduction in Staff. Included in discussion, among previously discussed budgets, were:
ECIA - Chapter I - Page 654
ECIA - Chapter II - State Programs - Page 668
Education for Handicapped Act - Page 675
Senator Coffin commented to the State Department of Education:
While you have seen and heard us make statements that we are opposed to the merger at this time, I think we all recognize that there is a cost attached to each and every change, and this is just one of many proposals in the reorganization that are probably going to fall by the wayside. On the other hand, it should not be interpreted by anybody, including your department, at least from this senator's view, that what the Governor has attempted to do is wasteful or unnecessary. They are on to something that perhaps needs to be pursued through the biennium, and that is the usefulness and the justification of agencies....
Senator Coffin thought a policy perhaps could be established in the future requiring department to submit alternate budgets in order for the committee to see how agencies can prove themselves.
Senator Raggio closed the hearings on the State Department of Education.
There being no further business before the committee, Senator Raggio adjourned the meeting at 10:31 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 6, 1993
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