MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
May 3, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Monday, May 3, 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:
Dan Miles, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Steve Abba, Program Analyst
Dee Crawford, Committee Secretary
OTHERS PRESENT:
Gary Crews, Legislative Auditor, Legislative Counsel Bureau
Mike Spell, Deputy Legislative Auditor, Legislative Counsel Bureau
Stan Jones, Director, Employment Security Department
Martin Ramirez, Principal Accountant, Employment Security Department
Bob Seale, State Treasurer
Greg Titus, Relationship Manager, Government Services, First Interstate Bank
Don Hataway, Chief Assistant Budget Administrator, Department of Administration
Judy Matteucci, Director, Department of Administration
Gary Crews, Legislative Auditor, Legislative Counsel Bureau, distributed Exhibit C, Audit Report, State of Nevada Employment Security Department, (Exhibit C - Original on File in the Research Library) to the committee.
Mr. Crews explained the scope and objectives of the legislative audit of the Employment Security Department (ESD) was to determine if ESD complied with depository laws and regulations pertinent to the financial administration of the Benefit Account and the Employment Training Program. The audit was also conducted to determine if ESD monitors the lower authority appeals process to ensure prompt hearings are conducted as required by federal and state laws and regulations. The scope was to ensure the solvency of the Unemployment Compensation Fund through the rate-setting process, it was explained. The audit also examined whether ESD should convert from a weekly benefit payment procedure to a biweekly system.
Mr. Crews provided a brief overview of the results of the audit findings. The audit disclosed ESD failed to comply with depository laws and regulations resulting in loss of potential interest earned and unnecessary bank service charges totaling nearly $800,000. Additionally, because ESD did not follow statutory requirements, it erroneously transferred $l.l million of state funds to the Federal Unemployment Insurance Trust Fund, it was disclosed.
Further, ESD fell short of meeting federal criteria for timely disposition of appeals, risking federal sanctions against Nevada, the audit disclosed. It was explained that Nevada has no statutory requirement for keeping the State's Unemployment Compensation (UI) Fund solvent, which could affect the ability of the fund to pay future unemployment benefits. Significant cost savings would be realized from use of a biweekly benefit payment system, Mr. Crews asserted.
Mr. Crews drew the committee's attention to page 8 of Exhibit C and asked Mike Spell, Deputy Legislative Auditor, Legislative Counsel Bureau, to cite the findings and recommendations of the audit.
Mr. Spell stated, contrary to current statutes, ESD deposited the Employment Training funds into a bank account outside of the state treasury account, resulting in interest not being earned for the state. The funds were transferred into the state accounting system only when needed to cover disbursement, he pointed out. Mr. Spell testified ESD officials stated they were unaware of the statutory requirement to place these funds into the state treasury. Had ESD complied with the law, it is estimated nearly $300,000 in interest would have been earned for the state over the 3-year period ending in September l992, Mr. Spell proclaimed. Additionally, due to the alleged mishandling of the funds by ESD, the state's accounting records do not reflect the true activity of the program. He cited the example that $l0 million has been collected from employers since inception of the program, however, approximately $2.4 million has not been accounted for in the state financial records.
Mr. Spell clarified:
The funds arrive with employer UI contributions as one check. The funds are deposited into a clearing account. Thereafter the employers' contributions for the UI trust fund are wire-transferred to the United States Treasury account and the Claimant Employment Program Funds (CEPF) remain in this clearing account. As these funds are needed to pay disbursements for the program, they would be transferred out of this clearing account into the state system.
Senator Raggio queried if the clearing account generated interest income.
Mr. Spell responded it does not generate interest.
Senator Raggio asked if it was required that funds be deposited initially into the clearing account.
Mr. Spell said, "No" and explained:
Statutes require that all funds collected are to be deposited into the fund for the employment of claimants. However, because of the mechanism of the single check arriving from the employer, it has to be deposited into the clearing account. The only way we could avoid that is the employer would have to remit two payments. One for the quarterly UI contribution and one for the claimant employment program.
Senator O'Donnell asked for clarification regarding how it was determined $2.4 million was considered "lost."
Mr. Spell explained:
The $2.4 million was not considered lost, it had accumulated in the clearing account since the inception of the program. It never was deposited into the fund in the state's financial accounting system. What the state lost was approximately $300,000 in interest, which would have accrued since the inception of the program, had the funds been placed into the state treasurer's portfolio.
Mr. Spell explained the audit recommendation was to deposit all employer payments for the Employment Training Program to the state treasury and "request recovery of state Employment Training Funds, totalling $l.l million, that were erroneously transferred to the Federal UI Trust Fund."
Senator Raggio queried how that could be accomplished.
Mr. Spell explained the funds would be retrieved back from the Federal UI Trust Fund and placed into the Claimant Employment Program. Continuing, Mr. Spell emphasized ESD maintains the unemployment insurance benefit account in an outside bank account, despite statutory requirements that it be kept in the state treasury. As a result, ESD incurred $l8l,000 in unnecessary bank service charges and failed to earn $3l4,000 of interest during Fiscal Year l992, he disclosed.
The audit recommended ESD coordinate efforts with the treasurer's office to bring the unemployment benefit account into the state treasury, as required by law.
Mr. Spell addressed the issue of timeliness of appeals. He declared federal regulations dictate that 60 percent of appeals be decided within 30 days and 80 percent within 45 days. Since mid-l990, ESD has failed to meet these requirements, he maintained. For the year ending March 3l, l992, ESD disposed of only 7 percent of appeals within 30 days and l4 percent within 45 days. These statistics rank Nevada next to last nationally in meeting federal mandates. Failure to comply with federal regulations could result in the United States Department of Labor (USDOL) placing sanctions against the State of Nevada, he cautioned.
In April l992, USDOL threatened to withhold or terminate ESD's federal administrative funds, totalling $24 million in l992, which could have placed a severe impact on the state's budget, he proclaimed.
Mr. Spell noted the backlog of pending cases and threat of a lawsuit similar to one filed in California in May l992, prompted ESD officials to contract with the University of Nevada Center for Dispute Resolution (CDR). The contract, initiated in August l992, called for CDR attorneys to complete l,000 cases by January 3l, l993. While this contract helped in relieving some of the backlog, it violated Nevada Revised Statutes (NRS) 6l2.490, which require appeals be decided by salaried claims examiners hired through the state personnel system.
Senator Raggio asked, "Assuming that provision is violated, is there merit to that provision?" He asked, "What is the policy argument for that reasoning?"
Mr. Crews interjected to explain, "The only thing we could find was just a statutory citation disproving that. I don't think there is anything in federal law that necessarily prohibits that."
Continuing, Mr. Spell noted the decline in ESD's performance resulted from a variety of factors, including increased appeals due to the recession, high staff turnover, time frames inherent within the state personnel system, and failing to respond immediately to the vacancies. The audit recommendation is that ESD respond immediately to appeal referee staffing changes and utilize available staffing resources, when necessary.
Mr. Spell drew the committee's attention to the trust fund solvency issue. He stated currently NRS contains no provision to ensure the solvency of the state's Unemployment Compensation Fund. Consequently, the ability of the fund to pay future unemployment claims, especially in poor economic times, may be impaired. NRS 6l2.550 prescribes the method for ESD to use in measuring the fund's solvency but stops short of requiring employer contribution rates be set at a level to ensure adequate reserves are maintained, he narrated.
Mr. Spell drew the committee's attention to page l2, Nevada Trust Fund Solvency Data, outlined in Exhibit C, and stated it outlines the trust fund balances and solvency ratings computed using both the state and federal methods.
It was reported that in September l990, ESD determined that an average employer contribution rate of l.35 percent of taxable wages would be needed to maintain the trust fund balance at a solvency rating above l.0 for calendar year l99l. This rate was presented to the Employment Security Council in November l990 and approved for the upcoming year. However, at the request of the Governor, ESD lowered the l99l average contribution rate to l.0 percent in order to offset the impact of the proposed business activity tax, Mr. Spell disclosed. This move was estimated to reduce the trust fund balance by $54 million over the 2-year period, he emphasized. Due to the rate reduction and effects of the recent recession, the fund balance declined by more than $l00 million during l99l and l992.
Because of the declining fund balance, ESD raised the l993 employer contribution rates by 50 percent to an average percentage rate of l.5. Even with the increased rate, the fund balance is projected to decline another $29 million during l993, Mr. Spell avowed. If the trust fund becomes insolvent, as it did in l976, Nevada might be forced to borrow from the federal government, he cautioned. Any loans not repaid within 2 years could result in additional Federal Unemployment Taxes (FUTA) being imposed on Nevada employers. Presently, the annual FUTA tax rate is .8 percent; however, employers in states with outstanding unemployment insurance loans for more than 2 years have paid two or three times the normal FUTA rate. This could cost Nevada employers as much as $70 million annually in increased FUTA taxes, he cautioned. The federal government has imposed additional FUTA taxes on employers in other states l8 times since l985. The audit finding recommended legislation be established requiring the unemployment fund be maintained at a minimum solvency rating, he concluded.
Senator Raggio asked at what point does the federal government impose such a sanction.
Mr. Spell answered a sanction is imposed if the state has borrowed from the federal government and has not repaid the loan within a 2-year period.
Senator Raggio asked what is the current status of Nevada regarding outstanding federal loans.
Mr. Spell said Nevada is not currently borrowing from the federal government.
Senator Raggio said, "When Nevada lowered the contribution rate in l99l, as the Governor's offset against the increased business tax, evidently we didn't do a very wise thing, is that the situation?"
Mr. Spell responded the combination of the rate reduction and 2-year recession resulted in a cost to Nevada of an additional $l00 million.
Senator O'Donnell referenced the instance of the l99l average contribution rate being lowered by l percent and questioned since the rates are actuarilly set, "how can the Governor arbitrarily reduce a state unemployment insurance rate, which is determined actuarilly, to obfuscate the business tax, to lower the impact of the business tax?"
Mr. Crews offered the solution that legislation be enacted wherein a statutorily fixed rate is set.
Mr. Spell addressed the issue of biweekly benefit payments. As a result of studies conducted in l988 and l990, ESD concluded significant cost savings could be achieved by converting to a biweekly payment system. He stated, although ESD has identified the conversion to a biweekly payment system as a key long-term objective, the legislative auditors opine it should be made a higher priority. The audit estimated ESD could have saved approximately $l30,000 during l992 if claims were filed and paid on a biweekly basis. Consequently, the audit recommends ESD place a higher priority in converting to a biweekly benefit payment system.
Senator Raggio asked if the savings would be achieved mainly from postage savings.
Mr. Spell responded in the affirmative and explained mailing costs account for $ll7,000 of the estimated savings of $l30,000.
ESD has accepted all recommendations outlined in the audit report, Mr. Spell pointed out.
Senator Rawson asked how much revenue was generated by the business tax during the same time period.
Mr. Spell answered it was approximately $50 million.
Senator Rawson asked, "Was this savings realized by the same people that paid the business tax, or was there a shift in who was responsible for the revenue?"
Mr. Crews responded, "We'd have to analyze that, but I think it is your same basic population. The amount of how it is allocated would be a little different based on the formula and the business activity tax."
Senator Rawson asked, "Would it have been a more favorable rate for large companies, or would it be more favorable with those with many employees?"
Mr. Spell replied the unemployment rate is set on the experience rating. If there is a high percentage of employees filing unemployment claims, an employer would pay a higher rate, he described.
Senator Rawson asked what types of businesses file the highest unemployment rates.
Mr. Spell did not have the information readily available, but offered to forward the statistics to the committee.
Stan Jones, Director, Employment Security Department, introduced Martin Ramirez, Principal Accountant, Employment Security Department. Mr. Jones stated he strongly endorsed the legislative audit procedures established under NRS. He requested that l5 years not elapse between agency audits "as it was with the audit of ESD."
Senator Raggio asked how frequently is the agency audited by the federal government.
Mr. Jones stated a federal auditor is on the premises to conduct an audit on a monthly basis.
Senator Raggio asked if the federal auditors perform audits in the same fashion as the legislative auditors with respect to the NRS.
Mr. Jones said it is conducted in a different fashion.
Senator Raggio queried why it took l5 years to conduct an audit for the ESD.
Mr. Crews replied:
It's just a matter of resources. One of the reasons we look at ESD is that the [U.S.] Department of Labor comes in there quite frequently...so we rely on them somewhat so we don't duplicate efforts. Also, we contract for a single audit on an annual basis with a public accounting firm, and they are in there each year looking at the grants.
Senator Raggio asked, "Don't they [contract auditors] pick up things of this kind?"
Mr. Crews replied, "They haven't."
Senator Raggio suggested changing auditors.
Mr. Jones noted the ESD is under constant and ongoing review for compliance with federal requirements and operational procedures by federal inspectors and program compliance personnel. The federal auditors are "coming from a different program, or functional review, than the Legislative Counsel Bureau. That is why it is so critical that l5 years not elapse between the audits by the Legislative Counsel Bureau (LCB)...."
Mr. Jones pointed out the LCB audit made six recommendations and the agency was in complete agreement. Two of the recommendations were implemented within weeks of the preliminary meeting between the agency and the LCB, he announced. The implemented recommendations were the recovery from the Unemployment Insurance Trust Fund of $l.l million and the deposit of all claimant employment project payments into the state treasury.
Mr. Jones said because the state treasurer is currently negotiating a new account with a banking institution, it has prevented ESD from depositing the Benefit Account into the state treasury at this time. He explained the reason is because new checks must be printed.
Senator Raggio asked if the agency is losing interest earned on its accounts during the interim.
Mr. Jones responded, "No, the Benefit Account, does not accrue interest to the State of Nevada. The interest accrues to the Unemployment Insurance Trust Fund."
Mr. Crews proclaimed, "In some respect, the State of Nevada is losing interest. It may not be to the General Fund, but interest is being lost."
Senator Raggio asked Mr. Crews if he agreed it is impossible for the account to be immediately transferred.
Mr. Crews offered the recommendation, "...I think that is a detail they are going to have to work out with the state treasurer."
Mr. Jones professed knowledge the agency has had a clearing account and benefit account for more than 20 years. He declared:
Those accounts have been invested in interest-bearing accounts in the name of the State of Nevada and the interest has been applied to bank charges charged to the department by the banking institution. Bank charges over the past 2 years have averaged the equivalent of five full-time positions, or $250,000 per year.
Senator Raggio asked Mr. Crews, "You mentioned $l8l,000 as unnecessary bank service charges. Are you talking about the same portion of that amount as being unnecessary?"
Mr. Crews responded in the affirmative.
Mr. Spell interjected:
The $l8l,000 that LCB found in unnecessary bank charges is...the difference in what our bank charges would have been, per their calculations, if we had our benefit and clearing accounts in Valley Bank, now Bank of America. There were some substantial differences in the cost per item...for what First Interstate Bank charges for and what Bank of America charges. The $l8l,000 boiled down into three basic components. There were approximately $l4,000 in stop payments we were being charged for by First Interstate Bank that Bank of America doesn't charge for. There was a $77,000, approximately, partial account reconciliation that we understand would not have been charged at Bank of America. Finally, the actual cost per item, ll months of the year in l992, First Interstate Bank was charging us 20 cents per item, and Bank of America was only charging l2 cents an item. In the twelfth month, First Interstate Bank dropped their charge to l5 cents per item.
Senator Raggio asked Mr. Crews, "Is that what you have [made] reference to?"
Mr. Crews responded in the affirmative and added, "These are the charges that would have been avoided if we had piggy-backed on the treasurer's system."
Mr. Jones declared, "Had the ESD not been able to offset the bank charges through the clearing account and benefit account interest, it very likely could have resulted in a reduction in staff."
Mr. Jones provided the example that in l984, ESD was issuing 39,250 first-pay orders, which is defined as the first unemployment insurance check a recipient receives. In l992, ESD was issuing 60,268 first-pay orders, a 53 percent increase. Similarly, in l984, ESD was issuing 5l8,l92 checks annually. In l992, ESD was issuing 89l,966 checks, a 72 percent increase in that activity. Under the provisions of the Cash Management Improvement Act, ESD will be allowed to maintain a separate investment account to cover banking expenses in a manner not too dissimilar to the Benefit Account method used for many years. Mr. Jones reiterated he has taken the appropriate steps to correct the issues reported in the audit.
Senator Raggio invited testimony by Bob Seale, State Treasurer. Mr. Seale testified he has reviewed the audit of the ESD and announced he has met with LCB and ESD staff. The treasurer's office is on the cusp of resolving most of the issues raised in the audit, he maintained. He announced that currently the treasurer's office is in the process of issuing a Request for Proposal (RFP) for banking services. He stressed:
That will not preclude us from solving this problem in capturing the interest and reducing some of the costs that have incurred in these series of accounts. This is part of the problem that I have been talking about for some time. With 355 bank accounts, there are many of these kinds of situations that exist out there that we have to find....
Mr. Seale advised the committee a solution has been worked out with First Interstate Bank (FIB) which will preclude the state from losing as much interest as has occurred in the past.
Senator Raggio referenced the Benefit Account and asked whether the deposit predicament could be resolved before a decision is made on the selected bank.
Mr. Seale said it would not be practical to change that account prematurely because of the volume of checks issued.
Senator Raggio invited comment from Mr. Seale regarding the separate investment account.
Mr. Seale stated there may be some portions that ESD continues to invest, but opined most of that activity should be concluded by way of the General Fund. It was reported a provision currently exists wherein agency accounts earn interest while under the collective General Fund and then distributed back to the appropriate agency. "But not bank accounts, they're separate accounts in the General Ledger and we will resolve that," he declared.
Senator Rawson recognized more frequent audits would disclose deficiencies but opined the most significant problem was the policy decision to lower the unemployment insurance tax rate from l.35 percent to l.0 percent. "That's what puts us in significant jeopardy," he said.
Mr. Jones answered that in l985, the ESD Unemployment Insurance Trust Fund was solvent. As a result of its solvency, ESD began a series of unemployment insurance tax reductions. For 6 years following that initial reduction, there was an annual UI tax reduction. In l99l, the recommended tax rate was l.35 percent and ESD was facing the possibility of an additional UI tax reduction the following year. "At that time, the Governor believed it was to the advantage of Nevada employers to reduce the UI tax....The ESD Advisory Council met and concurred with the tax reduction...," he insisted.
Senator Rawson reiterated that action was a policy decision. He asked if actuarial advice was solicited by the ESD Advisory Council.
Mr. Jones answered:
We have an ESD Research Section that is comprised of some of the top economists in the State of Nevada. Annually, they look at the trust fund and make projections as to what the UI payout will be for the next calendar year. They present to the ESD Advisory Council, l0 charts of possible taxes for the next year. The Research Section recommends one of those l0 charts and the ESD Advisory Council acts upon that recommendation.
Senator Rawson asked whether the ESD Advisory Council is bound to act on a different proposal offered by the Governor. Continuing, he stated:
They came in with a recommendation of l.35 percent and were asked to lower, or change that rate....It doesn't look to me like they met a fiduciary responsibility, and I want to know the basis for that. Do they have to take orders from anyone, or is it their own decision?
Senator Raggio asked for clarification regarding who sets the rate.
Mr. Jones responded the director of the ESD sets the rate. He clarified:
Subsequently, after the Governor looked at the Unemployment Insurance Trust Fund balance, he believed that it was prudent; and he could assist in offsetting some of the business activity tax by lowering the UI....
Senator Raggio pointed out, "The decision was made at that time as an offset. The Governor wanted to offset the increase that was going to be forthcoming from his business tax, is that correct?"
Mr. Jones responded in the affirmative.
Senator Raggio commented, "Let's be honest, it was based on politics, not on prudent financial decisions."
Senator Rawson expressed his opinion it was the legislature's obligation that those types of rates be set by sound actuarial advice and that it be removed from the realm of political manipulation.
Senator Glomb asked at what time are the rates set.
Mr. Jones said the ESD Advisory Council meets annually in September and sets the rate at that time for the following calendar year.
Senator Glomb queried whether the rate established by the ESD Advisory Council had ever been changed previously at the request of the Governor.
Mr. Jones responded that to his knowledge the incident has not previously occurred.
Senator Glomb asked what measures could be taken to eliminate the necessity of the state borrowing funds from the federal government.
Mr. Jones opined the legislative auditors have recommended that a solvency test be established. He stated the ESD Research Division is currently developing a solvency test that would be submitted for legislative action.
Senator Raggio asked when the solvency test would be ready for disposition to the legislature.
Mr. Jones said by the end of the week.
Senator Raggio directed Mr. Jones to coordinate efforts with the legislative auditor and state treasurer in development of the solvency test.
Senator O'Donnell asked Mr. Jones if he supported the concept of statutorily mandating solvency testing wherein the ESD Advisory Council would be bound to adhere to the results.
Mr. Jones responded in the affirmative.
Senator O'Donnell asked, "When the Governor came out with his State of the State address in January [l993] did you, at that time, support the solvency test?"
Mr. Jones said at that time no solvency test existed in which to support.
Senator O'Donnell rephrased the question, "At that time did you support the philosophy of having a solvency test?"
Mr. Jones replied, "No, I did not because there had been no need for that. For 6 consecutive years the Unemployment Insurance Trust Fund average tax rate had been reduced...."
Senator O'Donnell offered the comment, "That's because there was no solvency test."
Mr. Jones agreed.
Senator O'Donnell asked had the ESD Advisory Council's recommendation over the last 6 years been higher or lower than the actual established rate.
Mr. Jones responded, "In each of those 6 years, the rate...recommended by the ESD Advisory Council was the rate that was established for that calendar year."
Senator O'Donnell asked, "Why the deviation in this year's rate over the ESD Advisory Council's rate? Was it going against your personal philosophy in that there would be a solvency test?"
Mr. Jones replied the rate established by the ESD Advisory Council for this year was recommended at l.0 percent average tax. He expounded:
That was arrived at as a result of the Governor looking at what the ESD Advisory Council had done for each of the 6 preceding years and asked the council if it could be reduced even further in l99l, and they concurred that it could be. As a result, it was reduced to l percent.
Senator O'Donnell expressed his concern, "You're telling me the Governor does have the ability to jawbone the ESD Advisory Council into a rate that he deems necessary."
Senator Raggio clarified the distinction the director of ESD sets the rate upon advice from the ESD Advisory Council. The ESD Advisory Council did not, in l99l, change its recommendation, moreover, the director of ESD was instructed to do so by the Governor.
Continuing, Senator Raggio asked whether Mr. Jones was appointed by, and served at, the pleasure of the Governor.
Mr. Jones responded in the affirmative.
Senator Raggio asked if the ESD Advisory Council was also appointed by, and served at, the pleasure of the Governor.
Again, Mr. Jones responded in the affirmative.
Senator Raggio suggested that appointment practice is a weakness in the system and opined independence should not be present in a matter as vital as determining and retaining the solvency of the fund.
Senator Raggio invited public testimony.
Greg Titus, Relationship Manager, Government Services, First Interstate Bank (FIB), came forward to testify. Mr. Titus declared several statements in the audit report appear as if FIB unjustly enriched itself at the expense of the ESD. "I can assure you we are not making hundreds of thousands of dollars per year on this relationship...," he insisted. "I do not know over what period the $800,000 in charges was," he said.
Senator Raggio offered the information, "I think it was $l8l,000 in unnecessary bank charges."
Mr. Titus replied, "That was a period for Fiscal Year l992, I believe. But there also was a comment about $800,000 earlier in that report."
Senator Raggio invited Mr. Spell to address the question.
Mr. Spell stated the referenced $800,000 is cumulative of the findings. He explained, "It would be $300,000 the state lost in interest since l989, $3l4,000 that could have been earned in the trust fund, and the $l8l,000."
Mr. Titus countered, "Those are not....unnecessary bank service charges. I can give you a little more up-to-date accounting of what is going on with this account." He recited:
We did cut the rates over a year ago on this account and we have reduced the fees the bank earns by over $50,000 per year. With regard to the $3l4,000 of interest, I would also like to see what the differential they're talking about is on that. Our total cost for service charges for handling this account for the last year was $246,000. This expense was paid for through a combination of compensating balances and actual fees. To say these balances could also be invested elsewhere, I think maybe we're looking at a little bit of double-counting.
Maybe there is a spread differential they're talking about. But I can tell you there is a comment in here that says the bank service charges now paid by ESD will be dropped if moved into the state's General Fund. I don't know of any bank that is going to process over one million checks per year, which is the volume this account has had in the last year, for no charge. Somewhere that charge is going to come through, whether it comes through in the form of an actual hard dollar cost, or whether it's paid for in compensating balances....
Due to time constraints, Senator Raggio asked all concerned parties to meet in an attempt to resolve the issues.
Plant Industry Fund - Page 459
Closing List 8, Exhibit D, was distributed to the committee.
Senator Raggio stated the subcommittee made the decision to retain the weights and measures function in this budget rather than transfer it to the Department of Transportation (DOT). Additionally, the subcommittee left aside the structure of some of the boards, he announced.
Steve Abba, Program Analyst, Fiscal Division, Legislative Counsel Bureau, summarized the department was asked to review the potential to impose a fee increase to offset some of the associated General Fund costs to retain the weights and measures inspectors in this budget. He acknowledged, "The closing list that is before you, [Exhibit D] incorporates those additional fees, but there would still be a General Fund requirement to support the program...."
Senator Raggio stated, "There would still be approximately $l80,000 and $l94,000 each year of General Funds required, but that is rather a false figure because it would still be required if we moved weights and measures over, according to the legal counsel."
Mr. Abba agreed.
Senator Raggio clarified, "Rather than having somebody suggest we're adding to the budget, we're correcting the budget because highway funding would not have been available for this purpose as suggested by the Governor."
Mr. Abba concurred. Continuing, he pointed out there are two positions designated as organizational savings in this account; the executive director and the accountant II position.
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY STAFF AND OUTLINED IN EXHIBIT D.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Office of the State Health Officer - Page 785
Mr. Abba testified the Governor recommended the health planning position titled bureau chief be targeted for reorganizational savings. He reported the health planning functions and planning positions were transferred into the Office of the State Health Officer budget by the l99l legislature. He cited the reason for that action was a better focus on health planning could be accomplished at the health division level, rather than the director's office.
Mr. Abba continued:
The division was able to identify a vacant position that could be eliminated [supervisor, health resources analyst], and that's what is recommended....using the salaries from that vacant position to retain the bureau health chief and delete the reorganizational savings in that budget....
Mr. Abba explained the effective date of the eliminated supervisor, health resources analyst position, would be July l, l993, and the reorganization savings would be implemented October l, l993. "So the first year of the biennium there is actually a savings with the recommendation to retain the bureau chief position," he declared.
Referring to Exhibit E, page 2, (Exhibit E - Original on File in the Research Library) he explained:
The other items you see under Section l, Adjustments to Expense, are all the actions that would incorporate the support cost for that position and deleting reorganizational costs that were associated with that....One of the funding sources is a cost allocation to all the other agency budgets, all their block grant fees and so forth. To balance this out, we could add the block grant monies and work with the division on that. They are well under their percent level that they could tack on to the block grant money and they also anticipate there will be a higher block grant award for the upcoming biennium.
Item number 2 is a recommendation to retain, within the health division, a computer programmer analyst position that had been added to this budget by the l989 legislature. The division...provided us with a list of backlogged projects. This particular position is very critical to the agency. They have a number of personal computers and local area networks that this position is responsible for maintaining. In our opinion, the backlog situation of this position to address this upcoming biennium would need a full-time body within the division, knowledgeable of the division's programs, in order to address those backlog projects. There is an additional expense to that, as you will recall, when consolidating the data processing functions and consolidating positions within the proposed Information and Technology Services Division, there was a cut in all the different salaries for positions that were consolidated....
Senator Raggio asked why the consolidation will not serve the same purpose without reinstating the position.
Mr. Abba explained:
We received a response from the budget office that indicated the cost for this position, monies transferred to the proposed division, would just take care of current duties. If there was any other project required, additional programming, or additional services, additional hourly fees at $62.50 per hour, would be tacked on....
Senator Raggio asked if the position were maintained could that scenario be expected.
Mr. Abba answered, "If we keep this position in here...all we do is pay for the salary, there won't be any additional costs." Continuing, he said:
As an example, some of the backlog projects, laboratory billing system, business office accounting personnel system...local area network system, state repository for immunization records, the trauma registry enhancement and the upgrade of the special children's clinic medical case management system....
It assumes the Bureau of Alcohol and Drug Abuse (BADA) division, which is recommended under the reorganization to be transferred to the Health Division, is retained within the vocational rehabilitation division. This would reflect under the assumption that BADA would go back to vocational rehabilitation. There had been a recommendation to transfer an accounting clerk position to the Office of the State Health Officer budget along with BADA. If that division is transferred back to vocational rehabilitation, this would reflect the transfer back of the accounting clerk....
Senator Raggio asked if that action would be necessary in development of the state health plan.
Mr. Abba answered, "They feel so. That is what was critical in retaining that bureau chief position...."
Mr. Abba announced the action taken by the Assembly Committee on Ways and Means was in concurrence with staff recommendation.
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY STAFF, (EXHIBIT E) PAGES 2 AND 3.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Vital Statistics - Page 790
Mr. Abba drew the committee's attention to the recommendation that reverses the Governor's recommendation to include reorganization savings representing the salary value of the bureau chief, health information and data management. The Health Division has identified additional block grant funds which can be used to retain the biostatistician position, it was reported. He recited:
The division has indicated they have no reservations regarding the use of grant funds for this purpose since the block grant's mandatory federal reporting requirements are very extensive, and the information is primarily compiled from the vital statistics program and statistically analyzed and prepared by the biostatistician.
He summarized the additional block grant funds will be apportioned to Nevada as a result of the new state allocation formula based upon the l990 census.
Mr. Abba stated the action taken by the Assembly Committee on Ways and Means was in accordance with staff recommendation herein.
SENATOR RAWSON MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY STAFF, (EXHIBIT E), PAGE 4.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Cancer Registry - Page 795
Mr. Abba recommended the budget be closed as recommended by the Governor and shown on page 5 of Exhibit E. He stated Assembly Committee on Ways and Means closed this budget in the same manner.
SENATOR RAWSON MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Health Facilities - Page 798
Mr. Abba stated the recommended adjustment in this budget is based upon reclassification of a position after completion of the Governor's Executive Budget. The Governor's recommendation for this budget is to make the agency entirely fee- and grant-funded. There will be no General Funds in this account after the first quarter of FY l994, and it will be completely self-supporting by FY l995, he narrated.
The subcommittee recommended to impose a one-time fee and increase the per-bed fee, Mr. Abba stated. He pointed out an adult care facility will thereafter double its per-bed fee. There is a potential impact on some state agencies because of the fee proposals recommended. The impacted agencies are the Department of Prisons, Mental Health/Mental Retardation and the BADA program, he clarified.
The recommendation to make the program self-supporting will save approximately $307,000 in General Funds over the FY l993-l995 biennium, Mr. Abba contended.
Mr. Abba explained the agency has agreed to bill for the fees and absorb the additional costs. He expounded, "The mental health/mental retardation budgets have...budgeted some of the fees. Not the total amount...and they have been paying at a lower level of per-bed costs."
Senator Raggio asked Mr. Abba to clarify whether all medical laboratories are currently licensed.
Mr. Abba responded in the affirmative and drew the committee's attention to page ll of Exhibit E, which outlines the fee increases.
Senator Raggio noted under the Governor's recommended budget, there are several facilities that are not currently paying fees.
Mr. Abba clarified:
These facilities are already paying fees....There will be a one-time fee, for example, on adult day care that would be proposed. Then there would be a per-bed fee after that. They're already budgeted for that. For example, adult day care, of $l2.50, the increase would be a doubling of that amount to $25.00.
Senator Glomb queried whether some of the patients admitted to adult day care centers were being paid from Medicaid funds.
Mr. Abba responded, "That's possible."
Senator Glomb asked if the fees for Medicaid bed charges were also being increased.
Mr. Abba explained the Medicaid program pays for the medical costs, while the facility will pay for the increased bed charges.
Senator Glomb voiced her understanding Medicaid rates are inadequate to cover the cost of adult day care homes.
Mr. Abba replied both medical facilities and providers have expressed the same opinion.
Senator Coffin asked if testimony was heard regarding the fee increases.
Mr. Abba explained initial testimony was presented during joint hearings on the budget and the proposal. "I don't believe at the time there was any industry...that came up and voiced their discontent with the proposal," he remarked.
Senator Coffin wondered if notification was sent to the industry advising them of the proposed fee increases.
Senator Raggio interjected to ask if the industry requested the fee increase.
Don Hataway, Chief Assistant Budget Administrator, Department of Administration, stepped forward to respond to both questions and declared he did not know the answers.
In summary, Mr. Abba stated Assembly Committee on Ways and Means closed this budget in the same manner.
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR IN ACCORDANCE WITH STAFF RECOMMENDATIONS, (EXHIBIT E), PAGE 6.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS GLOMB AND COFFIN VOTED NO. SENATOR CALLISTER WAS ABSENT FOR THE VOTE.)
* * * * *
Maternal and Child Health - Page 803
Mr. Abba referenced page l2, Exhibit E, and testified under the Governor's reorganization plan, the Maternal and Child Health Advisory Board (MCHAB), approved by the l99l legislature, was recommended to be consolidated with the State Board of Health. The budget closing proposal would continue the MCHAB as it currently exists, keeping it a separate board, and funding per diem and travel costs for the membership with additional Maternal and Child Health grant monies available for this purpose, it was reported.
Mr. Abba referenced Exhibit E, item 2, page l2, and explained the recommendation displayed would equitably distribute the Medical/Dental category funding between each Fiscal Year of the l993-l995 biennium. He disclosed the Governor's recommendation provides approximately $282,000 less in the Medical Care category for FY l995 than recommended for FY l994.
Drawing the committee's attention to Exhibit E, item 3, page l3 of the exhibit material, Mr. Abba explained the recommendation displayed provides for increased salaries associated with changing the effective date of the three new positions for the "Baby Your Baby" program from October l, l993, to July l, l994. He explained the Interim Finance Committee authorized two positions for this program at its April l2, l993 meeting.
Senator Raggio queried why three positions were necessary instead of two.
Mr. Abba explained the three positions consisted of one nurse, one clerical to respond to the hotline and one management analyst to conduct statistical tracking and analyses. Mr. Abba stated there is approximately from $800,000 to $l million available in private contributions.
Senator Coffin expressed concern the program is temporary. He commented:
At least the funding proposed from the private sector is temporary. We are going to have to assume it after the biennium. And now to find there is a thought about it coming in earlier worries me because it was initiated by the television stations...I'm curious if they're going to be contributing cash, or if it's going to be in-kind through the use of these commercials....
Mr. Abba answered there are four major contributing entities. He stated, "The cash is coming from...I think Summa [Corporation]....The NBC [National Broadcasting Company] affiliates, my understanding, is the in-kind type of activity through their public broadcasting efforts and media time...."
Senator Raggio defined, "The only thing we're doing here is accommodating the advisory board to continue as an independent...board." Senator Raggio stated:
I think we need to be concerned if we approve this budget and are then asked to continue the program, which certainly is a worthwhile program. But I think we need to indicate that our judgment on this is based upon the willingness of the private sector to continue the kind of contributions that they are committing to this. Too often we get lured into these programs that sound great and then we're asked to continue without the contribution that is made....So I want to make sure our record is clear on this....
In summary, Mr. Abba stated Assembly Committee on Ways and Means closed this budget in the same manner.
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR IN ACCORDANCE WITH STAFF RECOMMENDATIONS, (EXHIBIT E), PAGES 12 AND 13.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR CALLISTER WAS ABSENT FOR THE VOTE.)
* * * * *
Special Children's Clinics - Page 808
Mr. Abba stated waiting lists currently exist at both the Reno and Las Vegas facilities. He stated information was requested from the Health Division regarding the cost to deal with the issue of the waiting lists. One response suggested to eliminate the waiting lists and projected waiting lists and "that would run approximately $2 million over the biennium, of General Fund monies," he stated. Mr. Abba reported he also asked the division to look at the potential for minimizing the impact of existing waiting lists. The division responded the cost for that action would be approximately $850,000 over the biennium. He asserted:
So what this recommendation does here, is try to provide the clinics some ability and flexibility to deal with vacancy savings that had been built into the Executive Budget....This recommendation adds General Funds and reduces that vacancy savings level to a level the division feels they can live with.
Senator Raggio clarified $50,000 is being added to the budget and a reduction in vacancy savings would occur by a like amount.
In summary, Mr. Abba stated Assembly Committee on Ways and Means closed this budget in the same manner.
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR IN ACCORDANCE WITH STAFF RECOMMENDATIONS, (EXHIBIT E), PAGE 14.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR CALLISTER WAS ABSENT FOR THE VOTE.)
* * * * *
Community Health Services - Page 8l3
Mr. Abba stated the recommendation provides for the transfer of the community health nurse position, whose salary value was targeted for reorganization savings, to the family planning budget. He maintained that action will allow for the continuation of nursing services in the rural areas without the drastic reductions identified by the division. No general fund increases are necessary, he advised.
If this position were to be deleted, he stated, the family planning and adult immunization program would be eliminated. In summary, Mr. Abba stated Assembly Committee on Ways and Means closed this budget in the same manner.
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR IN ACCORDANCE WITH STAFF RECOMMENDATIONS, (EXHIBIT E), PAGE 15.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR CALLISTER WAS ABSENT FOR THE VOTE.)
* * * * *
State Health Laboratory - Page 8l8
Mr. Abba explained this budget had a reorganization issue regarding the state health laboratory supervisor being targeted for elimination. The health laboratory supervisor spends approximately 65 percent of his/her time either on the laboratory bench or performing water and milk certification inspections, Mr. Abba reported. The elimination of this position would exacerbate the problem in terms of generating fees, Mr. Abba contended. He explained, "In their biennial budget, there is $l.6 million in fees they have to generate. That's an increase of over $200,000 a year in additional fees." This recommendation would add the appropriate General Fund amount to maintain that position and delete the reorganization savings, he asserted.
Senator Raggio asked what amount of revenue could be raised from testing brothel workers.
Mr. Abba answered approximately $l25,000 annually.
Senator Raggio asked how the fee would be computed. He stated, "If we're going to raise fees on adult day care and everybody else, I suggest we take a look at raising these kind of fees." He asked for an estimation concerning the amount of fees charged to brothel workers.
Senator Coffin asked if Nevada brothel testing was conducted out-of-state.
Mr. Abba explained some Nevada laboratories send specimens to laboratories out-of-state for testing purposes. He maintained division regulations allow other certified laboratories to conduct testing.
Senator Coffin asked if Mr. Abba was aware of the charges imposed by those out-of-state laboratories.
Mr. Abba did not have that information.
Senator Raggio voiced his opinion testing should be done in Nevada "so the State of Nevada gets the fees."
It was decided to hold the budget until further information was received from Mr. Abba addressing the committee's aforementioned concerns.
Sexually Transmitted Disease Control - Page 824
Mr. Abba explained the adjustments for this budget, outlined on page l7 of Exhibit E, were merely housekeeping adjustments. He explained that after the budget was completed, the division was notified they would be receiving additional federal Comprehensive Care and AIDS (Acquired Immunodeficiency Syndrome) Surveillance grants for both Fiscal Years of the l993-l995 biennium. Additionally, it was reported, the Health Division recently submitted a request to increase one half-time federally funded clerical position to full-time status. Mr. Abba disclosed it appears the division, through an oversight, failed to request full-time status for the position during the budget development process. "It is possible the agency may lose the position's increased FTE [full-time equivalency] funding during the upcoming state/federal grant negotiation process," Mr. Abba disclosed.
In summary, Mr. Abba stated Assembly Committee on Ways and Means closed this budget in the same manner.
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR IN ACCORDANCE WITH STAFF RECOMMENDATIONS, (EXHIBIT E), PAGE 17.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Family Planning Project - Page 828
It was explained the Executive Budget recommended reorganization savings in the community health nursing budget, representing the salary value of the community health nurse position in this budget. This position has undertaken additional responsibilities to include oversight of the Health Divisions's family planning efforts, development of nursing protocol and backup support to the chief of nursing, Mr. Abba stated.
Mr. Abba disclosed, through informal discussions with the agency, it was indicated the Family Planning grant will cover the total cost for the nursing position. He asserted:
They have a reserve that will fund the position. If the position is funded totally with the Family Planning grant, there will be no reason to touch the reserve. The division wants to emphasize they will not increase fees to pay for this position.
In summary, Mr. Abba stated Assembly Committee on Ways and Means closed this budget in the same manner.
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR IN ACCORDANCE WITH STAFF RECOMMENDATIONS, (EXHIBIT E), PAGE 25.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)
* * * * *
Communicable Disease Control - Page 832
Mr. Abba recommended this budget to be closed as proposed by the Governor with one modification. He explained:
There is a clerical position in this budget that is funded with refugee health grant money. The Health Division had, in their initial request, requested that position to be continued, but with General Fund money, because they feared the grant would be lost. After the budget was completed...the refugee health grant federal authorities notified the division that the position would be funded. So it requests this budget be amended to keep that position and add refugee health grant monies. It is approximately $25,000 per year.
Senator Raggio asked the title of the position in question.
Mr. Abba responded it is a management assistance position.
Senator Glomb asked what were the long-term ramifications of note l, page 30, of Exhibit E.
Mr. Abba stated:
The communicable disease control program is actually the TB [Tuberculosis] program. There is a medical category where the division pays for eligible recipients, which are generally indigent clients. They pay for TB-related drugs...for residential care and hospitalization costs. The division, in the past biennium because of the budget [shortfall] and...increased caseload, had to prioritize exactly what they will fund. Their priority is to fund the appropriate drugs to put a TB indigent in some sort of state of remission, residential care is a second priority, and as a third priority, hospitalization. They have not paid for hospitalization this past biennium. This budget, as recommended, would require the division to continue their prioritization process when they have indigent clients come before them and request monies for the particular TB case.
Senator Glomb summarized, "What I'm hearing is there is not enough money in this budget to pay for the anticipated number of patients that will be diagnosed with TB...."
Mr. Abba answered, "Most likely it would be hospitalization. The drugs would most likely be paid for."
Senator Glomb pointed out restrictions may be placed on which drugs would be provided.
Mr. Abba said, "The restrictions would be the regular drugs that are prescribed for TB."
Senator Glomb proclaimed:
This budget is underfunded. TB is on the rise, and we know we're having more cases of this. In the long run it's going to cost us more money if we're not treating these patients. They're going to end up in hospitals infecting other people. How much would be needed to cover the anticipated number of TB patients?
Mr. Abba said:
It would all be a matter of caseload and the specifics of the particular client. As I indicated in note 2, [Exhibit E] the per-average cost for hospitalization for a TB patient is $2l,000 per patient. Residential care cost equates to approximately $2,95l per patient for an average stay of 4 months.
Senator Rawson asked, "Isn't there some supposition there will be federal grant money available in the interim where they can approach [the] Interim Finance [Committee]?"
Mr. Abba responded not with this particular program.
Senator Rawson requested the budget be held.
WIC (Women, Infants and Children) Food Supplement - Page 836
Mr. Abba testified the Health Division has been notified its WIC [Women, Infants and Children] grant award will be significantly higher for the next biennium than reflected in the Executive Budget. He reported the modifications provide for expenditures the division anticipates will be incurred with the additional grant funds. Most of the funds will be placed in the Aid to Individuals category. The division estimates it will serve approximately 24,000 participants monthly in FY l994 and 25,000 participants in FY l995. The current level is a caseload of 2l,000 annually.
The Clark County Health District has opened a health district at its new location in Las Vegas and that is the reason for the increase in the Clinic Operation category, Mr. Abba explained.
Senator Glomb said, "Last biennium we put in $600,000 in General Fund revenue. Is that included this go around?"
Mr. Abba stated there is no recommendation in the budget for General Fund appropriation.
Senator Glomb referenced her notes from previous testimony and declared "with this funding, we'd still only be serving 62 percent in l994...."
Mr. Abba explained the WIC program has priority listings at different levels of services. He declared, "Right now they are meeting each of those levels...I'm not aware of the 62 percent figure....I don't know of people out there who are not getting their applications processed and services rendered."
Senator Raggio offered the opinion, "I think they were referring to the poverty level and that was the comment they were reaching 62 percent of that population."
Senator Rawson said, "If they use a poverty standard of l85 percent of the poverty level, then theoretically, they would meet 62 percent of the need. But there isn't a waiting list at this point, so apparently we are meeting the need."
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR IN ACCORDANCE WITH STAFF RECOMMENDATIONS, (EXHIBIT E), PAGE 32.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Health Aid to Counties - Page 841
Mr. Abba stated the recommendation for funding in this budget be provided at the same level as FY l992, after the budget reductions were initiated. He stated, "I believe it is about $638,000 per year that will go to the counties and that will be divided out according to their population."
Senator Coffin asked:
Is there a statute...involved here that mandates that we require the counties to perform any service that this money would be paying for? I want to make sure we don't fall into the trap of the unfunded mandate accusation. If these are, in fact, programs that we are paying for that we are just doing because at one time or another we could afford to do it, I'll approve it. But I'm concerned it might be something we...statutorily required the county to do and then that we would not provide the money for.
Don Hataway, Chief Assistant Budget Administrator, Department of Administration, testified he was unsure whether a statutory provision was in effect.
Senator Raggio testified:
The two health divisions assume all of the health care for their respective counties...and this is the stipend that is paid by the state for those services. What you're saying is, we are reducing the amount that we have historically paid to the level that was reduced by the budget reduction program and I don't know what reduction that was.
Mr. Hataway responded, "It was about a half."
Senator Coffin repeated his concern, "I just want to make sure that we don't have ourselves up against the unfunded mandated accusation here in this budget."
Senator Raggio responded, "I think, in a sense, it does. There is no question we're cutting in half the amount that is given to the counties, is that right?"
Mr. Hataway responded, "We're cutting in half what was done in l992. I'm not sure what was prior to that time."
Senator Glomb interjected, "There's an implied mandate if we expect the two large counties to provide the public health services to the citizens of those counties. We're not funding the mandate."
Senator Coffin pointed out, "If it's a mandate."
Senator Glomb opined it is an implied mandate. She pointed out, "They are responsible for the delivery of public health services in the two large counties and the state covers the rest of the state...."
Senator Raggio opined, "The issue is one of a practical matter at this point because it would require an addition of another million dollars for the state to return to the level previously funded."
In response to Senator Coffin's question, Mr. Abba said:
That question was asked of the Health Division. They have three areas where they indicate there were state mandates requiring provisions of additional services by Washoe and Clark County Health Departments....
They also noted there is increased reporting requirements associated with the receipt of...block grant funds as required....The funding provided to the districts may be used for these purposes.
We also received information from the Health Division that the health aid to counties monies represents about 2 percent of their overall budget at the district level.
SENATOR O'DONNELL MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Immunization Program - Page 843
Mr. Abba testified while referencing Exhibit E, page 34, and explained the exhibit material reflects the projected vaccine needs based upon projections of the Health Division's immunization program.
Continuing his testimony, Mr. Abba stated there is additional Title XIX funding in the amount of $505,000 in FY l994 and $640,000 in FY l995 for vaccine purchases for Medicaid-eligible children. He stated, based upon the projected needs of the vaccine usage for the upcoming biennium, this budget is overfunded. Mr. Abba recommended the budget be reduced by $52,679 in FY l994 and $l29,369 in FY l995, accordingly.
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR IN ACCORDANCE WITH STAFF RECOMMENDATIONS, (EXHIBIT E), PAGE 34.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Emergency Medical Services - Page l476
Mr. Abba stated this budget is recommended to be closed as proposed by the Governor. Under the reorganization scheme, this program was recommended to be transferred to the proposed Department of Public Safety. Mr. Abba recommended this program be retained within the Health Division, however.
Senator Raggio polled the committee for its opinion regarding transfer of the agency to the proposed Department of Public Safety. It was the consensus of the committee to maintain the agency within the Health Division.
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR IN ACCORDANCE WITH STAFF RECOMMENDATIONS, (EXHIBIT E), PAGE 40.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Consumer Protection - Page l522
Mr. Abba testified this budget was recommended by the Governor to be transferred to the proposed Department of Environmental Protection. However, Mr. Abba did not recommend the agency be transferred to the proposed Department of Environmental Protection as part of the Governor's reorganization but that it be retained within the current health division.
The modifications recommended in Exhibit E, page 4l, include maintaining the Consumer Protection program in its existing state-owned space in the Kinkead Building which would result in a cost savings. It was also recommended to add the state-owned space rented at the Belrose complex and to add the reclassification which occurred subsequent to the development of the Executive Budget.
Mr. Abba testified the reduction in the General Fund appropriation to this budget is based on the level of plan review fees the agency indicated could be generated in their original budget submittal, versus what actually was budgeted.
SENATOR RAWSON MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR IN ACCORDANCE WITH STAFF RECOMMENDATIONS, (EXHIBIT E), PAGE 41.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Due to time constraints, the Senate Committee on Finance adjourned the meeting at l0:30 a.m.
RESPECTFULLY SUBMITTED:
Dee Crawford,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
??
Senate Committee on Finance
May 3, 1993
Page 1