MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
June 11, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:10 a.m., on Friday, June 11, 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
Jeanne Botts, Program Analyst
Dee Crawford, Committee Secretary
GUEST LEGISLATORS PRESENT:
Senator Raymond Shaffer, Clark County Senatorial District No. 2
Senator Leonard Nevin, Washoe County Senatorial District No. 2
OTHERS PRESENT:
Randy Day, Commissioner, Office of the Nevada Commissioner for Veteran Affairs
Donna Varin, Chief, Driver's License Division, Department of Motor Vehicles and Public Safety
Ray Sparks, Chief, Registration Division, Department of Motor Vehicles and Public Safety
Enrico Togneri, Captain, Forensic Science Division, Washoe County Sheriff's Office
Frank Barker, Captain, Las Vegas Metropolitan Police Department
Judy Matteucci, Director, Department of Administration
Due to lack of a quorum, the Senate Committee on Finance was called to order as a subcommittee by Senator Raggio at 8:10 a.m.
Senator Raggio opened the hearing on Senate Bill 414.
Senator Glomb joined the meeting at 8:l2 a.m., providing a quorum. Senator Raggio announced the Senate Subcommittee on Finance was meeting as a full committee of the Senate Committee on Finance .
SENATE BILL (S.B.) 414:Creates legislative committee on veteran affairs.
Senator Raymond Shaffer, Clark County Senatorial District No. 2, testified briefly in support of S.B. 414.
Randy Day, Commissioner, Office of the Nevada Commissioner for Veteran Affairs, testified in support of S.B. 414. He explained the bill creates a legislative committee, consisting of three members of the assembly and two members of the senate, appointed by the legislative commission to provide appropriate attention to the status of veterans. The committee's role is to study and evaluate issues concerning Nevada veterans as well as assist the Nevada Veterans' Advisory Commission in any capacity the committee deems appropriate. The committee may recommended appropriate legislation to the legislature, he summarized.
Senators Callister and O'Donnell joined the meeting at 8:l5 a.m.
Senator Raggio closed the hearing on S.B. 4l4 and opened the hearing on Senate Bill 415.
SENATE BILL (S.B.) 415:Requires department of motor vehicles and public safety to obtain certain information concerning veterans when issuing or renewing drivers' licenses or when issuing identification cards.
Senator Shaffer testified in support of S.B. 415. He explained the difficulty in keeping track of the number of veterans residing in the State of Nevada. This legislation would provide additional information concerning veterans at the time of issuance or renewal of drivers' licenses or when issuing identification cards.
Donna Varin, Chief, Driver's License Division, Department of Motor Vehicles and Public Safety, testified regarding the fiscal impact to this measure. She stated the bill would require the Driver's License Division to review identification cards of each applicant who has served in the armed forces. She explained it would necessitate a complete reprint of all division application forms. The information would be computer-filed and transmitted to the veterans' affairs commission, upon request.
Senator Raggio asked if $4,600 was a reasonable estimate to accomplish the task.
Ms. Varin responded the estimate would cover the initial one-time setup cost and the agency would absorb the printing costs.
Senator Raggio closed the hearing on S.B. 4l5 and opened the hearing on Senate Bill 332.
SENATE BILL (S.B.) 332:Requires redesign and reissuance of license plates for motor vehicles.
Senator Leonard Nevin, Washoe County Senatorial District No. 2, testified briefly from written text, Exhibit C, in support of S.B. 332. He explained Nevada has not reissued license plates since l983, and this bill would provide for the new design of motor vehicle license plates. Senator Nevin provided the information that reflector plates help to reduce rear-end nighttime accidents, a category accounting for 5 percent of all highway fatalities. He stated the license plate reissue proposes to take place in l995 with certain special plate category exemptions. Further, motorists would be able to retain the same alphanumeric legends they currently possess.
Senator Raggio asked for clarification if the bill envisioned a total reissue of all license plates.
Senator Nevin responded in the affirmative.
Ray Sparks, Chief, Registration Division, Department of Motor Vehicles and Public Safety, distributed Exhibit D, Disincentives to Vehicle Registration Compliance - Nevada l99l, to the committee. He testified in support of S.B. 332. Mr. Sparks opined the primary purpose of licensing a vehicle is to provide vehicle identification and proper registration. The secondary purpose of a license plate, he contended, is to provide for traffic benefits through reflectivity of the plate. To serve the purpose of an identification device, he stressed, the plate must be legible. He has found many of the license plates currently in use have far exceeded their life expectancy, are illegible, and have lost reflectivity value. He insisted the only way to solve the problem was to reissue new license plates entirely.
Senator Rawson joined the meeting at 8:20 a.m.
Senator Raggio expressed his concern the cost to the General Fund would be $2.6 million in the first year of the biennium, even though the department would realize additional revenue the second year of the biennium.
Senator Glomb asked if all license plates would be recalled and replaced with one standard plate.
Mr. Sparks responded in the affirmative and explained the exception would be the commemorative license plate.
Senator Glomb expressed her concern why all plates would have to be recalled.
Mr. Sparks contended the issue concerned standardization and legibility of the license plate. The safety issue is addressed by using reflective material on the plate, he avowed. Repeating testimony given by Senator Nevin, Mr. Sparks explained at night license plates serve as a reflective device, particularly if the vehicle is parked along the shoulder of a road in an unlit stretch of roadway.
Senator Raggio closed the hearing on S.B. 332 and opened the hearing on Senate Bill 459.
SENATE BILL (S.B.) 459:Makes conditional appropriations for establishment of forensic laboratories and purchase of specialized equipment.
Senator Rawson testified in support of the bill. He explained the measure makes an appropriation to Clark and Washoe counties for the establishment of forensic laboratories and purchase of specialized equipment for use in those laboratories.
Enrico Togneri, Captain, Forensic Science Division, Washoe County Sheriff's Office, testified passage of this measure would enable them to implement a program that was enacted by the legislature in l989 to conduct DNA [Deoxyribonucleic Acid] patterns on all convicted sex offenders so the data base can be searched when evidence is retrieved at a crime scene. He stated there was a possibility to secure grants in order to acquire matching funds. "But as far as the county funds, we are on a status quo budget....I doubt we would have matching funds for the $l05,000, unless we were able to obtain some federal grants," he stressed.
Frank Barker, Captain, Las Vegas Metropolitan Police Department, testified in support of passage of the measure. Captain Barker explained the forensic laboratory in Clark County is currently unable to conduct DNA testing. He explained the current procedure is to send the DNA samples to an outside laboratory at a cost of $550 per tested sample. He emphasized that approximately l0 case samples are conducted annually and stressed, "That's l0 cases, not necessarily l0 samples. Some of the testing requires multiple samples." He declared it would be a great service to the people of Nevada if the equipment could be obtained.
Senator Rawson pointed out more DNA testing would be done if the laboratory had the capability.
Captain Togneri declared Washoe County has been conducting DNA testing in-house for 3 years. Continuing, he explained, the laboratory is also contracting to conduct DNA testing for Alaska, Oregon, Idaho and Washington.
Captain Barker explained the application is extensive for the DNA testing in the areas of identification of missing children, sexual assault, and homicides. "We would be doing a great deal more if we could do it in-house in a more economical way," he urged.
Captain Togneri pointed out the most successful case in Washoe County was identification of a serial rapist which would not have been identified without the use of the DNA testing.
Senator Raggio closed the hearing on S.B. 459 and opened the hearing on Senate Bill 475.
SENATE BILL (S.B.) 475:Eliminates Nevada racing commission and transfers responsibilities to Nevada gaming commission.
SENATOR RAWSON MOVED TO AMEND AND DO PASS S.B. 475 WITH AMENDMENT NO. 882.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS CALLISTER AND O'DONNELL WERE ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL (S.B.) 19: Makes various changes to provisions governing water.
SENATOR RAWSON MOVED TO AMEND AND DO PASS S.B. 19 WITH AMENDMENT NO. 885.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS CALLISTER AND O'DONNELL WERE ABSENT FOR THE VOTE.)
* * * * *
Consumer Affairs - Page 428
Bob Guernsey, Principal Deputy Fiscal Analyst, distributed Exhibit E, Budget Closing Action dated June 6, 1993, to the committee and testified while referencing that document. He recommended to restore the commissioner position located in southern Nevada and offset that amount with vacancy savings. Mr. Guernsey referenced the commissioner position, the supervisory position in southern Nevada, and explained the Executive Budget recommends the former director of the Department of Commerce be moved to the Consumer Affairs Division and be retitled chief of consumer services, with a recommended salary of $68,687. He pointed out there would be two supervisory positions within the agency.
Continuing, he explained the half-time deputy director of the Department of Commerce would be reduced to .25 FTE (full-time equivalency). The remaining .75 FTE of the position would be shown in the Housing Division budget, to be supported as follows: .25 FTE from bond revenue transferred from Business and Industry and the remaining .50 FTE be supported from the Housing Division program. Action taken by the Assembly Committee on Ways and Means, he explained, was to move the deputy director of the Department of Commerce position with .50 FTE in the new Business and Industry budget and .50 FTE of the position with the Housing Division.
Senator Raggio asked if there would be any impact on the General Fund using either scenario.
Mr. Guernsey maintained there would be some impact on the General Fund if the position was funded 50-50, as suggested by the Assembly Committee on Ways and Means. Organizationally, he stated, "It may make more sense to put the position .50 FTE with the Business and Industry."
Senator Raggio voiced his concurrence with the suggestion by the Assembly Committee on Ways and Means.
Consumer Affairs Restitution - Page 432
Staff provided no recommendation on this budget account.
SENATOR RAWSON MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS CALLISTER AND O'DONNELL WERE ABSENT FOR THE VOTE.)
* * * * *
Insurance Fraud - Page 347
Exhibit F, Budget Closing Action dated June 6, l993, and Exhibit G, Department of Insurance dated February l, l993, were distributed to the committee.
Jeanne Botts, Program Analyst, explained the primary adjustment to this account reflected the legislature's recommendation to separate the Department of Insurance and the Department of Industrial Relations which were recommended by the Governor to be combined into a single agency.
There was a recommended increase of six new positions in the Insurance Fraud Unit which would have been the new Workers' Compensation Fraud Control and Quality Assurance Unit. Staff recommended this action not be taken in this budget account, she recited. Instead, she explained, it is recommended the Workers' Compensation Fraud Control be placed under the Office of the Attorney General and the Quality Assurance Unit be the responsibility of the Industrial Relations Division, as outlined in Exhibit F.
Continuing, Ms. Botts suggested:
...The transfer of responsibility for insurance fraud to the attorney general's office since the investigators and deputy attorney general in the unit and two secretaries are hired by and report to the attorney general, not the insurance commissioner. There are only three clerical employees actually in the budget and only one works within the insurance department, the other two are hired and report to the attorney general. Then there is the transfer of the money to the attorney general to hire the deputy attorney general and investigators.
This is a long-standing problem wherein the responsibility for the budget, collecting the money is with the insurance commissioner. But the attorney general hires and fires and supervises the employees....
There is no change in the insurance fraud portion of the budget, only in the workers' compensation portion....
In summary, Ms. Botts explained all but one employee will be under the auspices of the attorney general.
Judy Matteucci, Director, Department of Administration, interjected:
Probably the only reason some of this needs to stay under here is because of the assessment mechanism by which this is funded....But you can probably transfer the positions over to the AG [attorney general]....
SENATOR RAWSON MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY STAFF AND OUTLINED IN EXHIBIT F.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS CALLISTER AND O'DONNELL WERE ABSENT FOR THE VOTE.)
* * * * *
Senator Raggio recessed the meeting at 8:50 a.m. and reconvened the meeting at 9:00 a.m.
Distributive School Account - Page 642
Exhibit H, Subcommittee on K-12 Education dated June l0, l993, (Exhibit H - Original on File in the Research Library) and Exhibit I, Comparison of Agency's Request, Governor's Recommendations, Legislatively-Approved and Estimated Budgets, (Exhibit I - Original on File in the Research Library) were distributed to the committee.
Senator Raggio commended Ms. Botts and the subcommittee on education for their dedication to this issue.
Referencing both exhibits, Ms. Botts testified the subcommittee met several times and heard considerable testimony from parents, teachers and school administrators as well as staff of the department on the Distributive School Account (DSA) and the trust fund for class-size reduction.
She said:
Although we recognize how short funding is this session, there were some areas we looked at for adding money and we looked at it carefully to make sure there was adequate funding for the schools in the coming biennium.
I'll take you through the major decision and some issues that are still unresolved.
Senator Raggio asked does the Governor's recommended budget restore the per-pupil amount to the previous amount before the budget reduction.
Ms. Botts answered in the affirmative and informed the committee the legislatively-approved statewide aggregate basic support number for the current school year was $3,312 per pupil. That was reduced by S.B. 329 in an effort to recoup the $l8 million the Governor requested be saved over the biennium.
SENATE BILL 329: Makes supplemental appropriation to state distributive school account.
Continuing, she testified:
That took the basic support statewide down to $3,23l. But the Governor's budget did restore it back to the $3,312 level for each of the next 2 years.
The first issue is whether salaries should be adjusted if the retirement contribution is decreased. The Governor's budget recommended the contribution made to PERS [Public Employees Retirement System] on behalf of school district employees, and all employees, in the coming year be reduced by .25 percent from l8.47 percent to l8.22 percent of gross salary. This was based on their recent actuarial valuation of the retirement system. The PERS has indicated to our staff that if contribution rates decrease, an increase in salary equal to one-half of the amount of the reduction in contribution rate should be effected. This adjustment amounts to .l25...percent of gross salary. The additional cost to the distributive school account for doing this is $940,247 the first year and $994,373 the second year.
Senator Raggio asked Ms. Matteucci, "Is that a formula or policy which has been followed in the DSA? I'm not sure we understand the need for that."
Ms. Matteucci responded:
It is correct that when the retirement contribution is decreased that there is a corresponding increase in salaries if they are on employer-paid, which all the salaries in the DSA are. We have not in the past two bienniums made that adjustment in the DSA. There have been offsetting factors in previous years that we took into consideration. A number of high-level intermittent salaries and also other salary increases that were being proposed in the budget that more than offset the way the retirement contribution has been handled in the DSA. So historically, we have not made that adjustment in the DSA.
Ms. Botts continued her testimony by addressing item 2 of Exhibit H:
The subcommittee is recommending that roll-up costs be budgeted at a full 2 percent in each year of the biennium. Over at least the last three sessions I know of, I believe we've used a 2 percent roll-up figure for each year of the biennium and that, of course, is the cost of employees moving across and down their salary schedule....Although the figure may be a little higher, or a little lower in certain districts, statewide the 2 percent figure seems to have been pretty consistent over the last few years.
There was an error made in the calculation by the budget office whereby no increase was allowed for teachers hired in FY l994 as they moved into FY l995. So the subcommittee felt that should be corrected. There was also a transposition and small error in group insurance, so that explains the little adjustment in the first year. The total cost of these adjustments are $l2,755 in the first year and $527,656 in the second year.
Turning her attention to item 3 of Exhibit H, Ms. Botts stated:
We heard testimony that the school districts would like the 22 elementary school counselors hired in FY l992, pursuant to A.B. 268 [of the Sixty-sixth Session], to remain in a separate categorical fund in a separate account in the coming biennium.
ASSEMBLY BILL (A.B.) 268
OF THE SIXTY-SIXTH SESSION: Provides for the development of programs to aid certain pupils at risk of dropping out of school and to prevent substance abuse.
Continuing, Ms. Botts testified:
The Governor recommended they be rolled into the DSA. We did hear testimony that some school districts, if this is rolled into their basic support, would not continue these positions. However, the subcommittee is recommending that they remain in the DSA, that there is no reason to treat these 22 counselors differently than other counselors. This was started as a seed program with one-shot appropriations in the current biennium. There was also a recommendation that in the future, when new programs hiring permanent positions in the school districts are started, there should be some indication that school districts will be expected to pick these positions up in 2 years or 4 years....But eventually they will be rolled into the DSA. School districts will be expected to find funding, or continue funding, through their basic support. If these positions are eliminated from the DSA and placed in the school improvement account, where they currently are, basic support would be reduced by $4.l7 per pupil.
Turning to item 4, Exhibit H, Ms. Botts explained:
This also deals with a separate category of teachers and whether or not they should be rolled into the DSA, that's the class-size reduction teachers.
She testified school districts are finding it increasingly difficult to track those individuals that were hired as a result of the class-size reduction program. Accounting for teachers, or a representative number of teachers separately, has become an administrative burden, she stated. For these reasons, the department and the majority of the school districts would prefer to consolidate the positions into the DSA. But if this were done, the legislature might wish to establish strict requirements and safeguards to ensure the class-size, pupil-teacher ratios, are met, she cautioned. Penalties might also be established to help ensure school districts keep the required pupil-teacher ratios in those elementary grades.
Senator Rawson added:
Along with this, I think it might be nice to send a letter of intent and ask the school districts and state board to really look at this issue as rolling it in next time. But putting the appropriate cautions there so that can be tracked and appropriate penalties so we can bring money back to the state that isn't used in the appropriate way.
Continuing, Ms. Botts addressed item 5, Exhibit H, "Item 5 looks a little deeper into the class-size reduction program and at the number of teachers and the amount per teacher that should be budgeted." She reported the most recent estimates provided by the Department of Education indicate 971 teachers will be needed in FY l994 to maintain pupil-teacher ratios at l6:l in selected at-risk, kindergartens and first and second grades. She asserted:
This is 9.5 fewer class-size reduction teachers than are employed in the current year. Because enrollment increased at a lesser rate than had been anticipated in the current biennium, there are actually more class-size reduction teachers out in the school districts than necessary to reach l6:l, which is why our statewide average is less than l6:l at the moment.
When the department prepared their estimates, they asked school districts for the salaries of their current class-size reduction teachers and the number of pupils they expected in the coming year. When these estimates were developed, the [State] Department of Education is now using different assumptions. They are looking at a 4.5 percent roll-up cost, as opposed to the 2 percent, because these teachers are newly hired and are moving faster on the salary schedule than the average teacher. They are gaining one increment for experience in a year, which is usually 4 to 5 percent; and many of them are moving across the salary schedules for [completing] additional education as well.
There were also some different assumptions used on fringe benefits. For example, the retirement contribution for these full-time teachers is 18.47 percent. The rate we use in the DSA is...l7.3 because there are people employed by school districts that are not eligible for retirement benefits. Basically, what the [State] Department of Education came up with is there would be slightly fewer teachers needed next year than they are currently employing in the class-size reduction program, and fewer than the Governor had recommended, but they would be more expensive teachers than what the Governor had recommended based on the department's earlier projections....
I have an alternative projection of the cost for the class-size reduction program attached to back of this memo [Exhibit H]....
Ms. Botts reviewed the material in Exhibit H, and explained the alternative projection of costs for the class-size reduction program. She stated the projection incorporates many of the new assumptions suggested by the school districts, with funding provided from anticipated increases in estate tax revenue.
Senator Rawson offered the information:
I think we'd also make a recommendation that there be a letter of intent here that for future purposes that we consider the average cost of a classroom, statewide average cost, of a teacher in our roll-ups so that we don't get into concerns about difficulties. Or, we recognize that it's beyond the capability of the school districts to track an individual teacher because they move around. They may have been hired l0 years ago for fourth grade and they've gone to ninth grade and then back to third and finally in a class-size reduction program. It's very, very difficult to calculate what their actual cost is. You have to track them every year if you're going to do that. So we would just recommend that we pick the average salary for class-size reduction teachers and roll up with that.
Continuing, Ms. Botts outlined:
In the Governor's budget, different rates for inflation of utilities in certain school districts were included. But there is no existing mechanism within the formula for distributing those costs, at varying rates, to different school districts or regions. The Governor recommended a 2.5 percent increase statewide for FY l994 for heat. But increases were provided only in selected counties for electricity. Five percent in FY l994 in Clark, Lincoln and Nye counties [for electricity] and l0 percent per year in Washoe County only for water, sewer and garbage in recognition of Washoe's rapidly increasing water rates. The subcommittee felt, because of the mechanism for distributing these costs across all districts, that all districts should be treated the same and is recommending the following: The heat would continue to be a 2.5 percent increase in the first year only, statewide, as recommended by the Governor. So there is no additional cost there. Electricity would be increased 5 percent in FY l994 statewide. That adds $235,947 the first year and $295,l43 the second year. For water, sewer and garbage, there would be a 2 percent increase per year. That is no change in FY l994 recommended funding and a slight increase of almost $l3,000 the second year. That number was...[arrived] at based upon the fact that Washoe County has roughly one-fifth of the square footage of school facilities in the state and their l0 percent increase per year amounts to about a 2 percent [statewide] increase. The total cost would be almost $236,000 the first year and $308,000 the second year.
Senator Rawson noted that action did not penalize the districts by changing to a uniform basis.
Senator Raggio opined, "Actually, it's probably in excess of what really will be utilized for utilities, is it not....?"
Ms. Botts replied:
It's hard to tell. We did hear testimony from White Pine County, for example, that they had, I believe, a 6 percent increase. I did receive a letter from Washoe County that they had increases in all utilities, not just water.
Ms. Botts continued with item 7, Exhibit H, and noted the Governor recommended that school districts take advantage of the Medicaid reimbursement program to be reimbursed by federal funds for screening programs that they are already performing. An additional $2 million was recommended as an expense for the program and a corresponding $2 million adjustment in federal revenue was included in the DSA. She said:
Although placing this in the distributive school account in the Executive Budget did call attention to the availability of these funds, the subcommittee is recommending that in the coming biennium, these programs, if a school district chooses to undertake...[them], be tracked in a special revenue account and not within school districts' General Funds. At the moment, from the testimony we heard, it appears that only Clark County is doing it and they have already forged ahead and are working on it. But we are recommending those costs be kept separate and tracked separately....
Senator Raggio asked if that action would impact the formula used.
Ms. Botts responded:
It does not, because we are taking out the $2 million for [both] revenue...[and] the expenditure sides. Mike Alastuey of the Clark County School District testified that he has no problem with tracking those separately.
Continuing with item number 8, Ms. Botts testified:
The committee considered the question of tracking special education costs separately. Over the past interim, I did a study on special education funding...One of the tasks I was charged with was to develop an accurate figure for what special education expenses are in the State of Nevada. It's very difficult to do. School districts are not required to track those costs separately and, therefore, they don't.
Continuing, she addressed item 9:
Should basic support in upcoming 2 years be reduced below $3,312? The Governor is recommending the per-pupil support number remain at $3,312, which was the legislatively approved amount for this year, although it has been reduced in the current year to $3,231 and then restored back to $3,312 [for FY 1994). The revised projections of the revenue from the 50-cent portion of the property tax will save $2.2 million in the first year and $2.3 million in the second year. That would reduce basic support by approximately $l0 per year. So in recognition of this additional revenue which is considered outside the formula, basic support would be reduced by a little over $9, almost $l0 each year. The additions that we have gone through and I probably should go back a minute and summarize what each one of the changes does to basic support.
Number l...the retirement adjustment increases basic support by $4.l6 the first year, $4.l7 the second year. The adjustment to the roll-ups and other little corrections increase basic support 6 cents the first year and $2.21 the second year. Number 3 is no change. Number 4 and 5, because we are keeping the class-size reduction program in a separate budget account, it does not affect basic support. Had it been rolled in, it would have increased it by $l58 per year....Item 6, the utility change. That increases basic support by $l for the first year and $l.29 the second year. There is no change for the Medicaid program or special education costs being separately accounted for. The revision in the revenue projections on the 50-cent portion of ad valorem reduces basic support by $9.79 the first year and $9.87 the second year. So the net at this point, after we discuss number 9, is a reduction of $4.53 the first year and $2.20 the second year, up to this point.
Now I will continue and give you the amounts as I discuss each issue.
Senator Rawson said:
The state share of their support has gone down to that point, but the local share has gone up, so they are getting the same dollars. It's just there are fewer General Fund dollars that are going into it.
Senator Rawson explained his point, "That people don't misunderstand and think that overall funding in education has gone down because of that. It hasn't."
Continuing, Ms. Botts testified:
Number l0. Should ending fund balances of school districts be considered in calculating each district's basic support or statewide financial needs? The Governor recommends spending down school districts' ending fund balances by approximately $4.5 million over the biennium total. In the l99l session, the Governor recommended, and the legislature approved, spending down twice that amount over the l99l-l993 biennium. Historically, school district ending fund balances are approximately double the amount budgeted, and therefore, the budget director is recommending some of those funds be utilized to reduce state responsibility and the subcommittee agrees with that and did not make any changes in the Governor's recommendations on ending fund balances.
Ms. Botts referenced number ll of Exhibit H and testified estimates of net proceeds from mines are due from mine operators on June l5 each year, but school district budgets are due June l in non-legislative years. If the mine operators estimates were due on June l and school districts budgets delayed until June l5, and the budgets are delayed in legislative years, the (State) Department of Education would be able to utilize the most up-to-date estimates in calculating each school district's basic support. Currently, they use the Department of Taxation's estimates of April l.
She summarized, "In the past school year, had the department been able to use more up-to-date estimates, it could have greatly benefitted a couple of rural counties that were hurt."
Senator Raggio asked Ms. Matteucci if it would pose a problem if the dates were changed.
Judy Matteucci, Director, Department of Administration, declared it would not pose a problem to change the dates.
Continuing, Ms. Botts stated:
We held a meeting in January with the Department of Taxation representatives and invited school districts and we thought just two or three rural districts would come. Actually, l0 were there and were very interested in it. Perry Comeaux and Dave Pursell of [Department of] Taxation indicated that this should not be a burden upon the mines. They don't pay a fee at this time, they provide estimates. If they could do that 2 weeks earlier....
Senator Raggio interjected to ask if that action required statutory change.
Ms. Botts responded in the affirmative and continued:
Item l2. School districts should be required to report total compensation for teachers including fringe benefits and extra pay. Currently, school districts report the contract salary amount only and no fringe benefits or extra duty pay. It's very difficult to get that information....
Senator Raggio interjected to ask if that action would also require statutory change.
Ms. Botts responded in the affirmative and continued her testimony:
Number l3. This would be a requirement that the [State] Department of Education reconcile reports required under Nevada Revised Statutes, Chapter 387 to the state's accounting system. Last session, we added language requiring the school districts to report their expenditures to the [State] Department of Education on November l5 for compilation into a report that is due to the budget director and the fiscal division on November 25 of each year. All this item l3 asks is that the report be reconciled to the state's accounting system of what was actually spent in the distributive school account.
Senator Raggio asked if statutory change would be necessary to also effect that change.
Ms. Botts responded in the affirmative. She continued:
Item l4. If the method in which Eureka County School [District] funding is not changed, there will continue to be a shortfall each year. Due to the large number of gold mines located within its boundaries and the small number of students...slightly over 300 students, Eureka County School District receives more revenue from the two local sources that are recognized in the formula, the 2.25 percent local school support tax and 25-cent portion of the ad valorem tax on property, which includes the net proceeds of minerals, than is needed to cover the cost of educating its 300 students. The legislature calculates the state's responsibility by deducting all estimated local revenues from estimated statewide expenditures. Since Eureka's excess local revenue cannot be redistributed to other school districts, an adjustment needs to be made in the DSA to provide additional state funding for the other districts. In summary, not all of Eureka's local revenue is available to reduce the state's responsibility. This was not budgeted by the Governor because the Budget Division had forwarded a bill draft request prepared by the [State] Department of Education that would have, in effect, asked the Eureka County School District to write a check at the end of the year back to the DSA for the excess revenue. That has been determined to be unconstitutional by our legal division. If there is not another way to fix it, then we will need to put in another $l.6 million each year as we have the last 4 years to remedy this problem...I asked the [State] Department of Education to do a run with Eureka's true basic support and then what we've done the last few years, which is to plug $l00 in. Basically, the only way to remedy this would be to take a few dollars from each of the other districts. In a year where we are holding them flat, I think that would be painful to change the method of budgeting for Eureka at this point. I have provided in my work sheets this adjustment. The only solution the legal division and our division were able to come up with is if the property tax were levied at the state level, then that revenue could come into the distributive school account and this problem would be eliminated. But as long as the property tax is levied at the county level, there is a requirement in the constitution that the net proceeds revenue go to the benefit of or remain in the county from which the minerals are extracted. So that's the problem....
There is a bill in to require a study over the coming 2 years on whether or not we should continue having our county school district boundaries coterminous with the county boundaries. I don't know where that bill is or how that is progressing. Of course the other solution would be if Eureka County School District were combined with Elko, or something, then this problem would be eliminated. The subcommittee is recommending the adjustment be made and this be looked at over the next 2 years.
Senator Rawson noted there is a bill draft request regarding a study on the boundaries of school districts which may hold a potential solution to this problem.
Senator Raggio asked how the issue was handled in the previous session.
Ms. Botts explained:
We heard testimony last year from the department that said this was a one-time aberration, which it isn't. It's been going on since l989, and they were going to study it and come up with some solutions and they did. They provided a bill draft that would have asked Eureka County to write a check back, and they felt that would solve it. But it's been determined by our legal division that is not constitutional.
Continuing, Ms. Botts addressed item l5, Exhibit H. The question arose should increases be allowed in the adult high school diploma program. "No growth has been budgeted over FY l992 actual expenditures," she stated. In FY l992, school districts spent $7,798,934 on programs for adults earning high school diplomas. The Governor has recommended holding funding for those programs at $7,798,935 for both years of the coming biennium. In FY l993, school districts will actually spend less because some school districts reduced spending in these programs in response to the Governor's budget cuts. She stated the subcommittee is not recommending additional funding.
Ms. Botts reviewed item 16 of the exhibit material and suggested the committee may wish, by adding language to the statutes, to clearly provide authority to the Governor to reduce each district's basic per pupil support in times of emergency.
Senator Coffin disagreed with the concept and stated:
I could not agree on this at all because I felt like it's been almost l l/2 years since this happened and I think we're living with the results of this decision. The Governor apparently talked to leadership of the legislature at that time and asked, because he knew he didn't have the authority after he heard from the attorney general. He knew he didn't have the authority to cut the account, so we ended up with this arguably constitutional way of holding back school funding and then asking the legislature in l993 to ratify an act which I think taken by the school boards was not legal. I asked him to have a special session. Leadership was in disagreement. But I think the only answer is in the constitution. The Governor has the authority to call a special session....Once you put it in any part of the budget...allow the Governor to cut, without the legislature's concurrence, out of session, is an abrogation of legislation responsibility....
Continuing her presentation, Ms. Botts addressed item l7 of the exhibit material regarding whether additional funding should be added for instructional equipment and supplies to provide computer hardware and software for students. The recommendation was to increase the instructional supplies for software and hardware in FY l994 by $l,l00,000 and by $830,000 in FY l995. The increase in basic support per pupil would be $4.86 the first year and $3.48 the second year, she recited.
Turning to items l8 and l9, Ms. Botts briefly reviewed the revenue update and summary of changes to the basic support, as outlined in the exhibit material.
Senator Callister requested more time to review the material provided by the subcommittee before voting on the budget.
SENATOR RAWSON MOVED TO APPROVE THE RECOMMENDATION OF THE SUBCOMMITTEE AS OUTLINED IN EXHIBIT H AND EXHIBIT I, WITH THE EXCEPTION OF ITEM NUMBER 16.
SENATOR JACOBSEN SECONDED THE MOTION.
Senator Coffin asked if the subcommittee looked at "what occurs to the percentage of payroll that now consumes the dollar spent on education." He asked, "If we hold it steady, and the district costs continue to rise, where do we end up with payroll as a percentage of total?"
Ms. Botts responded the subcommittee did not look at that issue specifically.
Senator Callister drew the committee's attention to page 7 of Exhibit H and stated:
It indicates about a $2 million difference between Governor's recommendation projection on sales tax in the first year and $2.5 million in the second year. Which are we utilizing for purposes of your final calculations?
Ms. Botts responded she used the Governor's recommendation. "This committee has not taken any action on which revenue estimates they are going to use...," she stated.
SENATOR CALLISTER MOVED TO AMEND THE MOTION BY ADDING $16 MILLION WHICH WOULD GO BACK TO THE DSA TO OFFSET THE $18 MILLION APPORTIONED THAT WAS REDUCED FROM FISCAL YEAR 1992.
The chairman rejected the amended motion.
THE MOTION CARRIED. (SENATORS COFFIN, GLOMB AND CALLISTER VOTED NO.)
* * * * *
SENATOR RAWSON SOLICITED COMMITTEE AUTHORIZATION FOR A BILL DRAFT REQUEST TO CHANGE THE TESTING DATES FOR EIGHTH AND NINTH GRADE STUDENTS AND ALLOW THE DEPARTMENT OF EDUCATION TO ADMINISTER THE TESTS.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL VOTED NO.)
* * * *
Parole and Probation - Page l480
Exhibit J, Assembly Committee on Ways and Means Budget Closing Action, was distributed to the committee.
Senator Raggio reminded the committee the determination made by the Senate Committee on Finance concerning reorganization was the agency would remain under the auspices of the Department of Public Safety.
Mr. Miles referenced technical adjustments outlined in the exhibit material and explained:
There is a suggested increase in the vacancy savings. The reason for that is in the original budget there was some revenue recommended from the forfeitures' account. You can't use forfeiture monies for ongoing expenses and the Budget Division suggested we reverse the forfeiture out and just increase the vacancy savings, which would take care of that particular problem. There is some adjustment in the publication of periodicals they had budgeted for purchasing advance sheets and Nevada Revised Statutes reprints both years of the biennium and, of course, the legislature only meets once every 2 years, so we suggest taking that out in the second year....
In-State Travel and Operating Supplies and the printing and copying are all worker-driven expenses, and those are just minor adjustments to those amounts based on the number of positions they would actually have. There is also an adjustment in the non-state owned building rent based upon updated information from the Buildings and Grounds Division.....
Mr. Miles stated he had no further recommendations beyond that stipulated in the exhibit material.
SENATOR COFFIN MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY STAFF AND OUTLINED IN EXHIBIT J AND TO AUTHORIZE THE AGENCY TO REMAIN UNDER THE AUSPICES OF THE DEPARTMENT OF PUBLIC SAFETY.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR CALLISTER VOTED NO.)
* * * * *
Parole Board - Page l487
Exhibit K, Assembly Committee on Ways and Means Budget Closing Action, was distributed to the committee.
Mr. Miles provided a brief overview of actions taken by the Assembly Committee on Ways and Means as outlined in the exhibit material.
SENATOR COFFIN MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY STAFF AND OUTLINED IN EXHIBIT K.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Ethics Commission - Page 10
Mr. Miles testified:
In the attorney general budget, with General Funds, they are recommending two positions: a new deputy attorney general and a legal researcher that would be working for the Ethics Commission but are actually within the attorney general's office.
SENATOR COFFIN MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Tort Claim Fund - Page 24
Exhibit L, Budget Closing Action dated May 3l, l993, was distributed to the committee.
Mr. Miles offered no recommendation, but did bring to the attention of the committee this function has been transferred from the offices of the Budget Division and State Risk Manager to the Office of the Attorney General. The adjustment includes the transfer of two positions: a claims adjuster and management assistant.
SENATOR RAWSON MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Special Funds - Page 28
Mr. Miles offered no comments or recommendations to this budget.
SENATOR RAWSON MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Crime Prevention - Page 30
SENATOR COFFIN MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Extradition Coordinator - Page 34
SENATOR RAWSON MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR SUBJECT TO ANY ADJUSTMENT NECESSARY DUE TO PENDING LEGISLATION.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Consumer Advocate - Page 38
Mr. Miles offered no comments or recommendations regarding this budget.
SENATOR RAWSON MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Private Investigator Licensing Board - Page 42
Mr. Miles offered no comments or recommendations to this budget.
SENATOR RAWSON MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Legislative Counsel Bureau - Page lll
Legislative Interim Committee - Page ll3
Exhibit M, Legislative Fund, was distributed to the committee. Mr. Miles provided the following explanation:
You may recall the budget for the Legislative Counsel Bureau (LCB) was set at the exact appropriation level of the current biennium, after reductions were taken, without any restoration for maintenance items....Number l is a request to keep the video teleconference equipment which is not in the existing budget for the LCB.
It was pointed out the total cost for transmissions using the video teleconferencing unit would be $63,000 in the first year and $66,000 in the second year of the biennium. Mr. Miles explained the remaining balance in the amount of $9,000 is the cost of the Formetrics, Inc., revenue projection model.
Mr. Miles continued:
Number 2 is the request for new permanent and temporary positions. The first is a new attorney position in the legal division due to the work load of the administrative regulation portion of their work. The proposal here would be to add an attorney to deal with administrative regulations as they come from the executive branch. It has been a burden on the legal division and affects their ability to do other work including getting the NRS [Nevada Revised Statutes] after the session. The proposal is to share the cost of that between the state General Fund and non-General Fund agencies that require review of their regulations. The proposal is to have some bill charges going back to those agencies, which are not in the General Fund....You get a shared cost of that new position.
Mr. Miles continued:
The other is to restore the intermittent contract secretary for the research division. Based on a normal interim work load of interim studies, they were able to include that within the targeted amounts of the original budget of a flat General Fund appropriation....
The next item is to add and restore a handful of certain operating costs that do not fit within the targeted appropriations. The total of that is $7,800 the first year and $3,600 the second year....
In the audit division, the director has requested, both in the audit and fiscal division, that some training funds be added which had to be eliminated in the budget reductions. That's $l,000 in the audit division and $800 in the fiscal division in the first year, and $600 the second year. In addition, the reductions that took place because of the flat level of funding appropriation depleted a major portion of the fiscal analysis division travel fund. In the first year of the biennium, which is the major year between sessions when we have interim studies, and also trying to review and get to the agencies and see their programs, the request is to add $4,000 back for travel. We recently had to switch our maintenance contract on our printers back to a major supplier because our service was inadequate, and it's going to cost us some additional money for maintenance contracts. We are very equipment-dependent over there. We have also picked up free of charge another printer we will have to maintain, so there's $l,000 in there for maintenance contracts.
Mr. Miles distributed Exhibit N, memorandum dated April l4, l993, from John McCloskey, to the committee. He stated Senate Bill 389 would increase the state's contribution to group health insurance in the second year of the biennium.
SENATE BILL (S.B.) 389:Specifies amount to be paid by certain public employers for group insurance for public employees for next biennium.
SENATOR JACOBSEN MOVED TO ADJUST THE BUDGET AS RECOMMENDED BY STAFF AND OUTLINED IN EXHIBIT M AND EXHIBIT N, AS WELL AS THE AMOUNT NECESSARY TO PAY THE GROUP HEALTH INSURANCE COST AS OUTLINED IN S.B. 389.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY,
* * * * *
School Improvement - Page 650
Ms. Botts suggested to close this budget as recommended by the Governor.
SENATOR RAWSON MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL (S.B.) 429 Requires certain peace officers to complete training in procedures to be followed in detection and investigation of and response to cases of sexual abuse or sexual exploitation of children.
Senator Raggio distributed Amendment No. 803 to S.B. 429 to the committee.
SENATOR GLOMB MOVED TO AMEND AND DO PASS S.B. 429 WITH AMENDMENT NO. 803.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
There being no further information to come before the committee, Senator Raggio adjourned the meeting at l0:45 a.m.
RESPECTFULLY SUBMITTED:
Dee Crawford,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
??
Senate Committee on Finance
June ll, 1993
Page 1
Senate Committee on Finance
June ll, 1993
Page 1