The Committee on Ways and Means was called to order at 3:45 p.m., on Thursday, April 13, 1999. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List.

COMMITTEE MEMBERS PRESENT:

Mr. Morse Arberry Jr., Chairman

Ms. Jan Evans, Vice-Chair

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Vonne Chowning

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. John Marvel

Mr. David Parks

Mr. Richard Perkins

Mr. Bob Price

COMMITTEE MEMBERS ABSENT:

Mrs. Marcia de Braga (Excused)

Mr. Joseph Dini, Jr. (Excused)

STAFF MEMBERS PRESENT:

Mark Stevens, Fiscal Analyst

Gary Ghiggeri, Deputy Fiscal Analyst

Cynthia M. Cendagorta, Committee Secretary

Chairman Arberry announced the first order of business to come before the committee was A.B. 5.

Jon Sasser, Washoe Legal Services, spoke in support of A.B. 5, which would authorize an interim study regarding presumptive eligibility. Janice Wright, Administrator, Health Care Financing and Policy (HCF&P) Division, and her staff had prepared a fiscal note totaling nearly $63 million for the cost of the program. As a result, Mr. Sasser was offering an amendment to the bill, as contained in Exhibit C, which would greatly narrow the scope of the bill. The amendment would not utilize presumptive eligibility for the upcoming biennium in the Child Health Assurance Program (CHAP), but would use it only in the Nevada Check-Up Program. As a result, the fiscal note was dropped from the $63 million range to a more manageable $535,000 in the first year, and $45,000 in the second year of the biennium.

Ms. Sasser then attempted to explain what presumptive eligibility would do. If a person was sick and showed up at a doctor’s office, the office could ascertain whether or not the person was eligible for the program that same day. The provider was guaranteed payment if they treated the person on that day, even if down the line the person was found ineligible. The Nevada Check-Up Program was designed to sign children up as quickly as possible, so they could be covered by medical insurance at 65 cents on the dollar paid by the Federal Government. Many times low-income families did not think of signing up for the program in advance, but were faced with the problem when they actually had to go to the doctor. The doctor’s office was one place in the system where people were not being signed up as well as they could be. The fiscal note on the bill was basically the difference between people coming into the Nevada Check-Up Program somewhat earlier than they might otherwise. It would not effect the overall caseloads in the program, because Nevada Check-Up was not an entitlement program. At the present time, there were nearly 10,000 children budgeted for the Nevada Check-Up Program. The changes would simply allow the program to reach its 10,000^th child earlier. The joint subcommittee was also looking at funding more slots in the program, and Mr. Sasser said he would be delighted to see that happen.

Mr. Sasser referred to the packet he had provided the committee (Exhibit C), and said he had included a list of priorities his coalition was asking for that session. Also included in the exhibit was the amendment to A.B. 5, which Mr. Sasser had addressed earlier in his testimony. Mr. Sasser called attention to the pages in Exhibit C, entitled "Original Cost of Health Priorities (Approximate State Dollars)," and "Cost of Health Priorities (State Dollars)," which depicted the original costs of the health priorities as determined by the interim committee, and the costs as included in the proposed amendment. He asked for the committee’s support for the amended and less expensive version of A.B. 5, which promoted the goal of signing up children for the Nevada Check-Up Program as soon as possible.

Chairman Arberry referred to the section in Exhibit C entitled "Conclusion," which discussed the possibility of tapping into the "Rainy Day" Fund or possibly deferring the problem regarding the Medicaid budget to the 2001 Legislature. He stated he was a firm believer in not deferring funding decisions which might obligate the following legislature to provide funding that was not available. Mr. Sasser noted that idea came from a hearing in which Perry Comeaux, Director, Department of Administration, mentioned the "Rainy Day" Fund, or deferring to the next legislative session as possible options for the Medicaid budget deficit. Mr. Sasser advised he would not advocate one option over the other.

Chairman Arberry then referred to the cost sheets contained in Exhibit C, noting Mr. Sasser advised the cost would be reduced to $500,000, however, the figure shown on the "Cost of Health Priorities (State Dollars)" page indicated the figure for FY 2000 was $1.4 million. Mr. Sasser indicated the figures for implementation of A.B. 5 were included on that page under item 2 (b), indicating that for the first year of the biennium the cost would be $535,484, and $45,539 for the second year. The overall figures included costs related to additional bills from the interim committee.

Mr. Marvel asked how many children were currently enrolled in the Nevada Check-Up Program. Mr. Sasser estimated that approximately 5,000 children had signed up for the program, however, felt Ms. Wright could better answer that question. Janice Wright, Administrator, HCF&P, related that to date the division had enrolled 5,100 children, but had sent out 500,000 applications, and over 11,000 children had applied for the program.

Chairman Arberry asked what would be achieved if the committee passed A.B. 5 in its amended version. Ms. Wright indicated that would advance payments from a later to an earlier period. That would be the fiscal impact for the General Fund portion of the bill only. Ms. Wright explained the actual fiscal note the division prepared was $1.5 million in the first year and $130,000 in the second year of the biennium. However, since the program was funded with 65 percent federal Title XXI funds, and 35 percent state General Fund monies, the figures provided by Mr. Sasser were correct. She noted $535,000 in the first year of the biennium would place the division at that limitation if it only enrolled 10,000 children. As Mr. Sasser indicated, when children went to the doctor they would get signed up at that point. The difficulty with that information was that those children would still have to be enrolled on the first day of the next month for the Health Maintenance Organization (HMO) they signed up for.

Ms. Evans noted on the last page of Exhibit C the figure for FY 2001 of the amended version of A.B. 5 was $45,000, however, on the second page of the narrative, the figure used was $29.8 million. Mr. Sasser answered the correct figure was $45,000, and he had discussed the issue with Ms. Wright, and she had prepared a revised fiscal note based on the anticipated amendment. Ms. Evans said the sentence that caught her attention on page 2 of the exhibit read, "The chief advantage of adopting presumptive eligibility in Check-Up is that it captures kids when they’re sick." She asked Mr. Sasser to describe what would happen if a family came in under the current rules with a sick child. Mr. Sasser said currently the way someone signed up was to mail an application to the Carson City office, which would take roughly 30 days to process. If a person was sick and trying to deal with an illness that day, they would not be able to. Under Medicaid a person could receive treatment the same day, but the Nevada Check-Up program did not take effect until the person was signed up and approved.

According to Mr. Sasser, the change in the program would be that the person could receive services that day based on a preliminary determination of eligibility by a provider. Ms. Evans then said a person’s options were to go to the emergency room or other urgent care facilities, which were the most expensive options available. Ms. Evans said then one way or another the public would pay. Mr. Sasser agreed, and noted that if the Nevada Check-up Program was funded the Federal Government put up 65 cents on the dollar, and if the county was paying, there was no federal match at all.

Mr. Marvel asked what the original projections were for the number of children eligible for the program. Ms. Wright stated a study was done by the Census Bureau that indicated there were approximately 43,000 uninsured children in Nevada. Of those, the Urban Institute estimated approximately 27,000 children would be eligible for Medicaid or Nevada Check-Up. The study was further refined to make the determination that 17,000 children would actually be eligible for Nevada Check-Up, while the other 10,000 would be at a lower income level and would be eligible for Medicaid. Mr. Marvel asked what the fiscal impact would be if the state provided services to 17,000 children in the Nevada Check-Up Program. Ms. Wright answered there were options to deal with that. If the state put in an additional $1 million to $5 million General Fund monies, the division would be able to serve approximately 5,000 additional children. The total would be $6 million to $7 million in General Fund monies in order to arrive at the level of serving 17,000 children.

Mr. Beers asked if the program was 2 years old. Ms. Wright answered the program started in October 1998. There was some discussion of starting it at the end of the previous legislative session, but the Federal Government had not prepared the rules at that time, and the program was not able to be up and running, because there had not been a decision made regarding Title XXI funds. The program came about from the Social Security Balanced Budget Act of 1997, which gave the division the authority to establish the program. During the interim, the division went to the Interim Finance Committee (IFC), and received approval for the start-up costs, and to add staff people into the program. The division started out with three individuals running the program, and had since supplemented that number by two additional staff. The division was able to go from zero children in October 1998 to the 5,100 children presently in the program. Mr. Beers asked if part of the funding the division was looking for was for marketing. Mr. Wright stated that was correct, and one of the individuals hired was a Marketing and Outreach Coordinator, whose job it was to go out to community based organizations, school districts and other programs to get the word out to those people who were eligible. To date the division had distributed over 500,000 applications for the program. Mr. Beers asked what the count of enrollees was at the start of the legislative session, February 1, 1999. Ms. Wright estimated the number was approximately 3,500 to 4,000. The program was currently adding 300 to 500 per month. Ms. Wright explained there was an initial "crunch" of persons who had heard about the program before it was up and running, and during the first month 700 to 800 persons signed up, but that number had tapered off slightly since that time. Further, she explained, the division found that people began thinking about health insurance for their children right before the school year began, because that was when immunizations were required for school age children. Ms. Wright explained enrollment cycled from month-to-month, but usually ran to several hundred each month.

Jan Gilbert, representing the League of Women Voters of Nevada, and the Progressive Leadership Alliance, spoke in support of A.B. 5. Both organizations supported the amendment as well. Ms. Gilbert advised she was troubled by the fiscal note the committee received regarding presumptive eligibility for pregnant women. She added that presumptive eligibility saved money in the long run, yet those savings were never calculated in the fiscal notes. Ms. Gilbert remarked that prenatal care was an essential need, which changed the health of the child for its entire lifetime. It changed the child’s mental capabilities for a lifetime as well, yet the discussion was never entered into in terms of the savings for the state due to women receiving prenatal care. At some point the state was going to have to address the problem, because it was a serious one, which caused the state more problems down the line by not addressing it. Ms. Gilbert wanted to see the savings entered into the fiscal note.

Rocio Lopez, an intern at Nevada Empowered Women’s Project, said presumptive eligibility was a great idea because people did not really think about Medicaid or Nevada Check-Up until their children were sick. She said she had to take her daughter to the doctor twice in one week for an ear infection, which she had to pay for out of her own pocket since her daughter was not insured. She could not wait 45 days for the application to be processed. Ms. Lopez noted that many people could not afford to pay doctor bills, and she supported the bill, as did Nevada Empowered Women’s Project.

Bobbie Gang, Nevada Women’s Lobby (NWL), spoke in support of A.B. 5, and noted her organization had supported presumptive eligibility for many years. The NWL was in support of the list, and in the amended version of A.B. 5 which would provide presumptive eligibility for children in the Nevada Check-Up Program. The NWL did understand the financial constraints facing the state, and funding presumptive eligibility for pregnant women at the current time was impractical, but they would be back, and hopefully in future sessions it would be made possible. Ms. Gang said in addition to being able to get children into health care programs earlier, a child could be signed up for Nevada Check-Up when he was admitted into an outreach health clinic. The bill would also enhance the outreach by bringing the enrollment process into community-based settings, which was a place parents and families frequented for a variety reasons. The families were more likely to discuss the health problems of their children and file an application in that setting, due to their comfort level at outreach centers. Ms. Gang urged the committee to fund presumptive eligibility for children during the upcoming biennium.

Alicia Smalley, President of the National Association of Social Workers, Nevada Chapter, spoke in support of the amendment to A.B. 5. She added that social workers would be pleased to see that people had an easier time getting into those programs.

Chairman Arberry declared the hearing on A.B. 5 closed, as no further testimony was forthcoming.

Chris Giunchigliani, Assembly District 9, said A.B. 372 was split out from another bill and that was why the bill was initially referred to the Committee on Health and Human Resources. While working on A.B. 373 she found individuals with mental illnesses were not necessarily covered in terms of abuse. That was solely what A.B. 372 was attempting to accomplish. She indicated there might be some issues the Division of Mental Hygiene - Mental Retardation (MHMR) wanted to review. A total of three to four individuals would be needed to staff the program, which might fiscally impact the division. Basically, explained Ms. Giunchigliani, the bill assured the rights of the mentally ill who were also elderly when abuse and exploitation were reported. The division had some concerns regarding the language changes that occurred when the bill was split out. The issue was that referrals could be made without the knowledge of the person’s mental status, which she did not want to occur. The agency was also concerned with having only 72 hours to complete those investigations. If there was a willingness, Ms. Giunchigliani stated she would work with the division, but overall she felt the division supported the concept of the legislation.

Debbie Hosselkus, Deputy Administrator, MHMR, indicated she would be happy to work with Ms. Giunchigliani on the bill. The division’s concerns centered around the issue of staffing, in order to investigate allegations of abuse and neglect. The division did submit a fiscal note to include four social workers and one support staff to provide those services on a statewide basis.

There being no further, Chairman Arberry declared the hearing on A.B. 372 closed.

Sheila Leslie, Assembly District 27, testified that through her work with the Children’s Cabinet, she had been aware of the value of peer mediation and conflict resolution techniques as models to address school violence for many years. The idea behind the bill came about because of a recent study conducted by the Nevada Institute for Children at the University of Nevada, Las Vegas (UNLV). Ms. Leslie stated the preliminary results showed Nevada schools were experiencing a significant level of violence. Peer mediation had been studied at length around the country and had proven to be very successful at teaching conflict management skills to youth, and helping them learn to manage problems or conflicts without violence. Typically, Ms. Leslie noted, those programs stressed communication, cooperation, respect for others, understanding, and agreement as solutions to conflict rather than relying on confrontation and violence. Ms. Leslie referred to a handout she had provided to the committee (Exhibit D).

Ms. Leslie stated the typical peer mediation goals were to provide a positive alternative to violence, to increase student achievement and to focus on academics by resolving conflicts as they occurred, and to facilitate and promote the use of mediation in schools and communities. In Nevada, peer mediation programs at school facilities were very fragmented and highly dependent on individual teachers or school staff, who often funded the programs out of their own pockets. It was Ms. Leslie’s experience in Washoe County that the programs thrived when the individual teacher was on site, but then failed when the teacher moved to a different school or tired of funding it out of their own pocket. Ms. Leslie said the bill asked for $50,000, which would be awarded on a competitive grant process through the Department of Education to schools who wanted to establish or expand a program. No grant would exceed $2,500 and the funds could be used for student incentives, training materials, and related costs. The funds could not be used for administrative salaries. Without those funds, the programs would continue to struggle along, and the difficult reality of the lack of funding meant some schools that desperately needed the programs would not have them. In conclusion, Ms. Leslie said those programs were proven violence intervention strategy, and would make a big difference in decreasing school violence. The program also had the added benefit of teaching the children important life skills. She advised the committee there were persons present from Billinghurst Middle School, who would present testimony regarding the program.

Mrs. Chowning wondered how widely used the programs were in Washoe County, since she thought they were more frequently used in Clark County. Ms. Leslie said Clark County did have more peer mediation programs than any other part of the state. In Washoe County the system was more fragmented, and the rural areas in particular had very few peer mediation programs.

Mr. Marvel asked if that would be an ongoing expense or a one-time appropriation. Ms. Leslie replied she was currently asking for a one-time appropriation, with the hope that it would continue to be funded in the future. Billinghurst Middle School found parents were very excited about the program and were people of means, so they were able to fund the program through the parent group. Ms. Leslie hoped in many of the schools the program would be sustained by parent groups once the program was up and running. She stated she was more concerned with the low-income areas and schools that did not have the resources.

Mrs. Cegavske asked if the programs were for Kindergarten through 12^th grades. She was curious as to what the program’s targets and goals were. Ms. Leslie answered that research had shown peer mediation to be successful at all age levels. The bill did not specifically define the age groups the program would affect. The program would look at the schools that had the highest level of violence and give priority to those schools. In Washoe County, the level of violence in some of the schools might surprise parents, since some of the schools with the worst problems were in more affluent areas.

Mr. Beers said his concern was envisioning the Department of Education having to read 400 grant applications. He inquired if there was any way to push that duty out to the districts and instruct them to organize volunteers and parents. Ms. Leslie said that was an excellent idea and was a very viable alternative.

Ms. Giunchigliani said she had taught at a school that had a peer mediation program, but the school she was at presently did not. She wondered if there was a listing of the types of violence grants that came into the state, in order to ascertain if some type of matching program could be initiated.

Jessica Gannon, a teacher at Billinghurst Middle School, stated she was an advisor for the peer mediation program at that school. The program had been operational for eight years and had been extremely successful. The program was funded from the parent club, for which they were very fortunate. The program was reviewed by the club every year when funds were requested in order keep it running. The school supported A.B. 382. Ms. Gannon added being able to apply for grants would be extremely helpful.

Kim Schulte, a peer mediator at Billinghurst Middle School, said peer mediation was about peers helping other students to solve their conflicts. That really helped the students because instead of going to adults to tell them what to do, the students could talk about their problems without feeling intimidated. Ms. Evans asked if there was a special time or place those students were brought together, and how the peer mediators knew the students were having a problem. Ms. Schulte said the program had an advisory period in the morning. Also, if teachers noticed two students having a conflict, they would refer the students to the peer mediators.

Mrs. Cegavske stated one of the concerns facing parents was the question of confidentiality. She asked how the teachers who trained the peer mediators addressed that issue. Ms. Schulte indicated that at the beginning of the year student mediators signed a form, which stipulated they would keep all information regarding peer mediation confidential. Also, during mediation, all participants signed a form which outlined the "ground rules" for mediation.

Mr. Beers asked how many cases a week the peer mediators reviewed on average. Ms. Schulte advised that during the 1998-99 school year they had processed approximately 84 cases. Mr. Hettrick asked Ms. Gannon how much money the program was receiving from the parent group. Ms. Gannon answered the program asked for $500 per year, which covered just about every aspect. To initiate a new program up it would cost a bit more, since videotapes and other materials would need to be purchased.

Sarah Swatzberg remarked that she felt peer mediation really helped her school because it kept conflicts from getting too large. When students went into mediation, they knew someone would listen to them and take them seriously. It was better to talk to peers, rather than adults, who would tell the student what to do. Peer mediators would not tell the student what to do, but instead listened and provided ground rules and guidance, but the students were the ones who actually solved their problems and came up with solutions. Ms. Swatzberg indicated a good use for additional funding would be to train counselors at schools, and to pay for transportation for persons traveling to other schools to train students.

Mrs. Cegavske asked if the students had found the training they received as peer mediators helped them at home with conflicts with parents or siblings. Ms. Schulte said it had. She added she understood after the training what people had to go through to solve their problems, which helped at home and at school. Mrs. Cegavske asked if time was lost from school to conduct the mediations. Ms. Gannon said at Billinghurst the students who were referred to mediation the day before were then seen during the 20-minute morning advisory period. In the past it had been done during the lunch hour, and in the morning it did not take away from any academic time from any student. Advisory period was a place where a small group of students were one-on-one with their advisor, where they did many different activities, not including academic activities.

Ms. Giunchigliani asked if Ms. Swatzberg would like to see the trainers train other individuals with the money allocated to the program. She asked if the mediators would feel comfortable going to train students at high schools as well as at middle schools. Ms. Giunchigliani asked how many students were in the program at the current time. Ms. Gannon said there were 22 students in the program. She added that during the past year the program did train others at the high school level, and it was extremely beneficial. Ms. Giunchigliani asked if any of the parents had ever been trained. Ms. Gannon replied they had not but that it was a good idea and possibly another resource.

Mrs. Evans asked if the entire student body knew the peer mediation program existed at Billinghurst. Ms. Schulte answered there were signs and advertisements posted throughout the school, and the program had a commercial on the school’s news network, which students watched during advisory in the morning. Mrs. Evans asked if some students came to the mediators voluntarily, or if they were referred. Ms. Schulte said students could sign themselves up for mediation, or their friends or parents could sign them up.

Keith Rheault, Deputy Superintendent with the Department of Education, supported A.B. 382, and said the incentive funds provided in the bill would help to get more schools interested in peer mediation programs. The department had similar concerns about 400 schools applying for $50,000. If those grants averaged $1,000 each, the maximum number of schools to receive funding would be 50. The wording of the bill might allow the department to show a tiering of schools based on either the accountability report or the report Ms. Leslie mentioned. That would allow the schools who were on the bottom of the priority list to spend their efforts on other funding sources if they so desired. Staff at the department had committed to take on the additional work, which was part of the reason the department was awarded the extra .25 full-time employee for the drug and violence consultant position.

Mrs. Cegavske asked what type of funding the department looked at for those programs, and additionally questioned how many grant writers there were at the department. She added that many officials indicated Nevada was one of the weakest states in terms of applying for grants. Mrs. Cegavske asked what the goal of the department was, and if there was any movement towards getting more federal grant money. Mr. Rheault stated the department did try to apply for grants that had a direct impact. If the grants were marginal, many times the department would not apply for them. In a number of cases, the department had applied, but Nevada did not fare well in particular for competitive grants. Usually the money went to the larger states first. The department was, at the current time, writing seven federal grants for teacher recruitment and quality. That effort had taken most of the staff’s time. The department had one consultant in the drug and violence area, but no grants had been awarded in that area to date. It was a dilemma, and if the department had a full-time qualified grant writer, there was a great deal of money available through grants.

Ms. Giunchigliani said there were grant writers at the state level in several departments, and in particular she remembered one in the Department of Administration who was not doing what the committee wanted them to do. Don Hataway, Deputy Budget Director, Budget Division, said that person did not write grants, but researched through the Internet for agencies to determine what was available in terms of grant funding. Ms. Giunchigliani noted perhaps there was an appetite to take that position for one biennium and have that person write grants and see what revenue could be generated. At that point the committee could reevaluate the decision. Mr. Hataway said it would probably require more than one person to write those grants, since it was a team effort. Clark County, for example, had a team that wrote grants. Ms. Giunchigliani asked if interlocal agreements were an option.

Mrs. Cegavske asked if the program was in any way aligned with or related to the Jury by Peers Program in Las Vegas. Ms. Leslie said she thought Mrs. Cegavske was referring to the teen court model, which had never been initiated in Washoe County.

With no further testimony to come before the committee regarding A.B. 382, Chairman Arberry closed the hearing.

Robert Hadfield, Executive Director, Nevada Association of Counties (NACO), indicated A.B. 386 was an association-sponsored bill. He added there was a critical need for the appropriation, along with the change in the law.

Michelle Gamble, NACO, referred to a letter that had been provided to the committee (Exhibit E), which detailed the long-term care program, established in 1989. At the 1997 session, NACO partnered with the state and the Governor’s Office, in order to pass legislation which created a board of trustees to monitor a fund which would provide financial assistance to counties who were unable to make their long-term care payments. In addition, Ms. Gamble noted that the state’s responsibility was put into statute at 155 percent of the Supplemental Security Income (SSI) level. That amount was increased to 156 percent in January 1999. The Department of Human Resources’ budget request increased the state contribution by an additional 1 percent effective January 1, 2000. Unfortunately, due to the budget situation facing the state, that 1 percent increase was not included in the Governor’s budget. Ms. Gamble stated A.B. 386 would accomplish two things. First, it would increase the state’s responsibility for the long-term care program up to 157 percent of SSI, beginning January 1, 2001. That would mitigate the fiscal impact to the state by including the increase for only the second year of the upcoming biennium. That fiscal impact was about $506,000 to the state. From that point on, the state’s eligibility would go up by 1 percent each January. In 143 years, the state would be at 300 percent of SSI.

Ms. Gamble stated secondly, the bill would create an appropriation of $300,000 to the fund that was established last session to assist counties who could not make their long-term care payments. According to Ms. Gamble, many of Nevada’s counties were experiencing severe financial difficulties. Mineral County, for example, had a declining assessed value and an increasing long-term care caseload. Since the fund began, Ms. Gamble had been providing the IFC with semiannual updates regarding the actions of the fund.

Mr. Marvel asked how many counties would have trouble meeting their match. Ms. Gamble said she had not received official notice from any county to date, but had conversed with Mineral and Lyon Counties.

Ms. Giunchigliani noted the bill was similar to a bill passed by the committee last session. She added the bill was a very reasonable approach to offset some of the impact on the local jurisdictions. The institutional history was that the committee agreed to do that since it had cost shifted the long-term care costs to the counties, and the bill was just one way to ease some of that burden.

Mr. Hettrick commented if the committee did not fund the counties that could not make the match, then all of the federal matching funds would be lost, since federal regulations required all counties to participate in the program.

David Fullstone, Lyon County Commissioner, stated Lyon County had been a recipient of part of the funds that had been appropriated. The county was uniquely situated near the population centers of northern Nevada, and had a high amount of less fortunate older people who moved to Lyon County to retire because of the low cost of living and inexpensive lots and homes. Mr. Fullstone indicated that tended to give the county a higher rate of older indigent care residents to take care of. At that time, Lyon County was not at the property tax cap, but was experiencing some of the highest growth in the state. The county was looking at passing school bonds in the year 2000, and was expecting many other costs to go up. The commissioners were assessing the indigent care property tax to the maximum, which was 10 cents, and were also adding approximately 4 cents of taxpayer’s dollars to indigent care as well. Mr. Fullstone advised that after a review of all sources of funding, the county was still anywhere from $75,000 to $150,000 short.

May Shelton, Director, Washoe County Social Services and Chairperson of the Nevada Association of Human Service Administrators, spoke on behalf of A.B. 386. She indicated the state Medicaid program was responsible for clients in nursing homes whose incomes were less than $775 per month, or 156 percent of SSI. Currently, that level was $496 per month, which was paid from the state General Fund and federal dollars. Ms. Shelton noted, as a person’s income increased, local governments in the county match program paid one-half of the cost for individuals with income up to $1,482 per month. The 17-county agreement was very important because if one county defaulted, the whole program would collapse. In Washoe County that meant it could cost over $3 million to pick up the 50 percent cost funded by the Federal Government, and in Clark County, that amount could be more than double. Ms. Shelton remarked it was very important to have that appropriation for $300,000, in order to bail out any county experiencing financial difficulties. For anyone in a nursing home whose income did not cover the cost of nursing home care, the county paid 100 percent of the cost. Ms. Shelton said Washoe County taxed the indigent levy to the maximum, which was $.2087 within the $3.64 maximum property tax. That totaled almost $16 million, but was necessary since many people were not eligible for Medicaid and did not have health insurance. Ms. Shelton stated she hoped the committee would consider both parts of the bill, which were a $300,000 appropriation as well as a 1 percent increase in state responsibility each year.

Marilyn Dempster, Assistant Director, Clark County Social Services, stated she supported A.B. 386. Ms. Dempster indicated she had been involved in the original process in 1989 when the counties contracted with the state for the Medicaid match program. At that time, Clark County was able to shift costs to the state Medicaid program. The county shifted 165 of its nursing home patients at a cost to the county of $850,000, and 10 years later, there were 580 nursing home patients from Clark County in the Medicaid match program. The county had budgeted $8.5 million for the Medicaid match program alone. If the program defaulted, Clark County’s portion would go up to $17 million. In addition, the county had between 85 to 100 patients whose expenses were paid 100 percent by the county. It was very important for the county to be able to place some of its patients on the Medicaid match program. Ms. Dempster indicated social services calculated that for the upcoming biennium there would be approximately 15 patients taken off the county rolls and added to the state rolls. Also, the agency did pay administrative costs of approximately $17.30 per patient for each of the patients on the county match program, which totaled approximately $120,000.

Mary Walker, representing Carson City, Lyon and Douglas Counties, stated all three boards of county commissioners fully supported A.B. 386. Currently, Lyon County was the only county that had withdrawn any money from the emergency fund, however, Ms. Walker believed it was simply the first county to do so. In the past 4 years, 6 rural counties suffered a decline in their assessed values in at least 1 of those 4 years. That was exclusive of the net proceeds of mining, and was a decline in their base assessed valuation. As assessed valuation declined, the 10- cent indigent levy brought in fewer dollars. The assessed values in those counties declined due to mining, and also centrally assessed properties. In most rural counties the population was still increasing, even though the assessed value was decreasing, and the population was often increasing with retirees since those areas were often more economical areas to live. That left many rural counties in a difficult situation since long-term care costs were rising greater than their assessed valuation. For example, in Mineral County in FY 1997-98, the assessed valuation decreased by 28 percent, while the long-term care costs increased by 79 percent. In White Pine County in FY 1997-98, the assessed valuation decreased by 6 percent, while the long-term care costs increased by 24 percent. Ms. Walker noted that Lyon County’s assessed valuation had increased 87 percent over the last 8 years, but its long-term care costs had increased by 531 percent during that time period. Lyon County was using the entire 10-cent ad valorem for indigent long-term care, which left nothing to support hospital costs. The county had to levy additional ad valorem tax dollars in order to pay for hospital costs. Lyon County’s assessed valuation was approximately $550 million, while Carson City’s was $900 million, however, the long-term care costs were almost equal. Ms. Walker emphasized that Carson City had the assessed value to support those costs, while Lyon County did not.

Ms. Walker said there was also the dilemma facing rural hospitals that needed to be addressed. In FY 1997-98, nine of the ten rural hospitals had operating losses, which affected long-term care. For example, some of those hospitals had to participate and actually provide long-term care in order to keep their hospitals open. The other problem was that county welfare dollars were one funding source, and that 10 cents ad valorem was used to pay hospital care and long-term care. As more and more of those dollars were being shifted to pay long-term care, there was less money available to pay hospital costs. In the late 1980’s, Ms. Walker had to make a decision whether she would pay a hospital or long-term care bill, when she worked for Carson City. She explained if she had not paid the long-term care bill there literally would have been elderly people checked out of care facilities, because there were no funds for them since they were above the federal and state matching amounts. Ultimately, she paid the long-term care costs, and the hospital did not get paid the full amount it was due that year. That was the dilemma facing the counties. Holistically, there were a number of serious ramifications to not having the funding to deal with long-term care.

Mr. Marvel asked if the drastic decrease in assessed valuation in Mineral County was due in part to the leaseholder refusing to pay the Army depot. Mr. Hadfield indicated that was correct, as well as the issue of a school bond passed by the county. A large decline in the assessed valuation was related to the Army base. Mr. Marvel asked if there was any litigation involving that issue. Mr. Hadfield said Mineral County had signed an agreement with the Federal Government, but Nye County was still in litigation on that same issue.

Mr. Arberry asked Ms. Wright if the state’s portion on the fiscal note (Exhibit F) was one-half of each of the two figures, $2.6 million and $7.8 million. Ms. Wright answered the fiscal impact of the bill in the first year of the biennium would be $300,000, which was all state General Fund money, and would replenish Budget Account 3246. That account was appropriated during the 1997 session, and at the time the money was drawn out of the Intergovernmental Transfer Account. Ms. Wright stated the current balance of that account was approximately $140,000. Two distributions had been made, including one in 1997 for $18,000 to Lyon County and one in 1998 for $148,000 to Lyon County once again. Ms. Wright reiterated there was a balance of approximately $140,000 in that account. In addition, the division shifted the burden of an additional 1 percent from the county obligation to the state obligation in the second year of the biennium, which would cost $506,794 of General Fund dollars. She noted there was a small piece of Title XIX funding for $1,906, and the reason for that was alluded to in earlier testimony, and that was a $17.30 per case amount that was paid by the counties for administration of the program. There would be approximately 92 cases that would shift from county to state obligation.

Chairman Arberry asked if those numbers were correct. Ms. Wright said the correct numbers were $300,000 in the first year of the biennium to replenish the fund, and the shift of 1 percent to 157 percent in the second year of the biennium just for the last 6 months, which totaled $506, 794.

Stephanie Licht, Elko County Board of Commissioners, supported A.B. 386, and provided a letter dated April 13, 1999 from Cash A. Minor, Elko County Chief Financial Officer to the committee for its perusal (Exhibit G).

Ms. Shelton indicated she wanted to make the correction that SSI income was just raised from $496 to $500, and so 156 percent would be $780. She added recipients of SSI, and retirees were granted cost of living increases, and when that happened, they "bumped up" to the next level. When this occurred, the state’s responsibility decreased while the county’s increased. Ms. Shelton said if the committee approved the 1 percent increase it would simply keep up with the cost of living increase. During the current year, the cost of living increase was 2 percent, which was low, and Ms. Shelton noted that some years the cost of living raise was 4 percent.

Ms. Giunchigliani said that was based on the local assessed value, and even though the fund was allegedly a state fund, if that valuation went up, the state reduced its obligation instead of covering other additional costs.

With no further testimony forthcoming on A.B. 386, Chairman Arberry declared the hearing on closed, and adjourned the committee.

RESPECTFULLY SUBMITTED:

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Cynthia M. Cendagorta

Committee Secretary

APPROVED BY:

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Morse Arberry Jr., Chairman

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