MINUTES OF THE meeting

of the

LEGISLATIVE COMMISSION’S BUDGET SUbCommittee

 

Seventy-First Session

January 24, 2001

 

 

The meeting of the Legislative Commission’s Budget Subcommitteewas called to order at 8:47 a.m., on Wednesday, January 24, 2001.  Chairman Morse Arberry Jr. presided in Room 1214 of the Legislative Building, Carson City,

Nevada.  Exhibit A is the Agenda.  Exhibit B is the Guest List.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau. 

 

ASSEMBLY MEMBERS PRESENT:

 

Mr.                     Morse Arberry Jr., Chairman

Ms.                     Chris Giunchigliani, Vice Chairman

Mr.                     Bob Beers

Mrs.                     Barbara Cegavske

Mrs.                     Vonne Chowning

Mrs.                     Marcia de Braga

Mr.                     Joseph Dini, Jr.

Mr.                     David Goldwater

Mr.                     Lynn Hettrick

Ms.                     Sheila Leslie

Mr.                     John Marvel

Mr.                     David Parks

Mr.                     Richard D. Perkins

Ms.                     Sandra Tiffany

 

SENATE MEMBERS PRESENT:

 

            Senator William J. Raggio, Chairman

            Senator Raymond Rawson

            Senator Lawrence E. Jacobsen

            Senator Joseph Neal

            Senator Bob Coffin

            Senator Bill O’Donnell

            Senator Bernice Mathews

 

COMMITTEE MEMBERS ABSENT:

 

None

 

STAFF MEMBERS PRESENT:

 

Mark Stevens, Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Gary Ghiggeri, Fiscal Analyst

Robert A. Guernsey, Principal Deputy Fiscal Analyst

Larry Peri, Senior Program Analyst

Georgia Rohrs, Program Analyst

Linda Smith, Committee Secretary

 

 

 

 

 

DISTRIBUTIVE SCHOOL ACCOUNT BUDGET OVERVIEW

 

Don Hataway, Deputy Director, Budget Division, distributed a Legislative Briefing on Executive Budget Recommendations for Distributive School Account (DSA), Exhibit C.  The briefing contained three sections:  1) normal operating projections; 2) enhancements; and 3) one-time appropriations.

 

Mr. Hataway stated the methodology used in preparing Part One was identical to that used in the past.  Six fundamental sources of information were used to construct the document:

 

·        Audited actual FY2000 revenues and expenditures for each school district were forwarded to the Department of Education (NDE) and were summarized and then disseminated to the Department of Administration (NRS 387 Report).

 

·        Actual FY2000 salaries -- Because payroll was such a large part of the DSA, actual average salaries that appeared in the audited reports were used in building the budget.  For licensed instructional personnel the average salary in FY2000 was $40,511 and the average salary including fringe benefits was $52,255.

 

·        Actual average starting salary of licensed instructional personnel during the current year -- The average starting salary provided by the NDE was $29,833.

 

·        Student-employee ratios -- To arrive at the number of new personnel required by the districts for the next two years, student-employee ratios that existed in FY2000 were used to arrive at the number of new personnel needed by the local school districts for FY2002 and FY2003.  The student per teacher ratio for FY2000 was 19.08, slightly higher than the 19.01 used for FY2000 and FY2001 budgets that were based on FY1998 data. The ratio fluctuated about eight-tenths of a point over the past ten years, basically around a 19 to 1 ratio.

 

·        Enrollment growth -- For FY2002 the districts had projected 4.86 percent growth, and for FY2003 4.68 percent growth.   Percentages had declined as a percent of total since numbers were driven off of a larger base.  However, the number of students did not go down in projections for individual years.  For FY2000 and FY2001 there were 14,033 and 14,660 additional students.  Districts projected 15,994 new students in the first year and 16,127 in the second year of the biennium.  Mr. Hataway explained that in the past, districts had done a reasonably good job of projecting enrollment growth, and the budget office had used districts’ estimates to build the budget unless there was an unusually abnormal number.  Districts normally had come to the 99 percentile as far as actual versus projected enrollments.

 

·        Building square footage -- For FY2000 the actual square footage was 32,704,927 square feet and was projected to grow to 37,533,287 by FY2003, almost a 15 percent increase in square footage. 

 

Mr. Hataway asked the members to apply these six fundamental sources of information as they reviewed the adjusted base budget.  Actual FY2000 revenues and expenditures were utilized with two adjustments: 1) the salaries were increased by 2 percent (roll-up) for each year of the next biennium based on FY2000 average salaries, and, per the budget instructions, all one-time costs were removed from the base.  All one-time equipment costs districts reported were removed from the base.  With those two exceptions actual FY2000 revenues and expenditures were utilized.            The M-100 category covered some inflation elements--for school districts inflation was recommended for heat, electricity and postage.  In the M-100 category,  $5,259,928 was recommended in the first year of the biennium and $10,866,254 in the second year.  The department had questioned how Mr. Hataway extended the postage inflation adjustment into the second year of the biennium and he stated the formula used this time was the same as what had been used for the past ten years.  Mr. Hataway indicated he would be happy to work with staff on the issue.  However, the recommended inflationary adjustments were the numbers reported (see Exhibit C). 

 

Mr. Hataway indicated the budget attempted to address the growth in a unified, fair, and equitable manner and there were four basic elements in the M-200 growth area:

 

• The first element was personnel.  The 19.08 ratio of students to licensed instructional personnel had been divided by the projected enrollment less the personnel that districts had, or were projected to have, in FY2001.  The budget office was projecting a need for 838.4 new teachers in the first year of the biennium and 845.4 in the second year.  Approximately two-thirds of the new teachers would be employed by Clark County School District, the largest school district.

 

• The second category was operating expenses that districts incurred in maintaining facilities.  The expenses had been reduced to a per unit cost.  Mr. Hataway presented three examples: 1) An average of $61.61 per student had been expended for instructional supplies in FY2000 ($61.61 times the number of students projected less the actual expenditures equaled the budgeted amount for growth); 2) An average of 14.1 cents per building square foot had been expended to heat the buildings (14.1 cents times the projected 35 million square feet less the 32 million square feet was budgeted for growth); and 3) An average of $88.24 per employee had been expended for travel ($88.24 times the number of projected employees less actual expenditures).

 

• The third category was equipment.  Mr. Hataway explained a similar process had been used for equipment, although actual expenditures  districts had incurred in FY2000 were billed back.  Also, growth had been  built in for equipment.  The example was $50.60 per student had been expended for pupil transportation.

 

• The fourth category was revenue.  The base included the actual revenues that districts had realized both internally and externally.  M-200 was used to drive the projected increases in revenues for the districts.  The Department of Taxation provided projections of assessed valuation for FY2002 and FY2003.  A 7.9 percent increase had been projected between FY2001 and FY2002 and 9.3 percent between FY2002 and FY2003.  Motor Vehicle Privilege Tax was projected to increase at 12.03 percent per year.  The Local School Support Tax (LSST) represented the largest revenue source for the districts.  The Economic Forum’s projections had been used for LSST projections.  Slot Tax estimates were provided by the Gaming Control Board.  The investment income was from the Permanent School Fund return on investments.  The budget had been built on anticipated revenue from the Estate Tax of $13.8 million per year. 

 

Mr. Hataway stated the M-300 decision unit was an adjustment for fringe benefit rates based on actual rates identified in FY2000.  For FY2002 and FY2003, $12,985,195 and $13,692,089, respectively, were built into the budget for increased fringe benefit rates and costs for the districts. The E-710 decision unit reflected the return to the budget of equipment expenses eliminated in the base budget ($34,300,617 per year).

 

 Mr. Hataway stated Part 2 provided information on the enhancements.  E-325 contained the expansion of three existing programs:

 

• Remediation -- An additional $3,775,629 was budgeted for FY2002 and $4,071,199 for FY2003.  These represented amounts recommended by the Legislative Committee on Education and would serve schools that were failing in two or more of the four subjects.  The Legislative Committee also recommended an allocation of funds for schools that were failing in one or more subjects and that was not funded.  The cost to add the recommendation was $1.8 million.

 

• Professional Development Centers -- An additional $1,717,255 in FY2002 and $2,611,972 in FY2003 was recommended.  The numbers represented the total amount recommended by the Legislative Committee on Education at their November 2000 meeting.

 

• Early Childhood Education -- An additional $4,000,000 was added for each year of the biennium.  Mr. Hataway indicated that early childhood education was a high priority of the State Board of Education.

 

E-326 established the Nevada Early Literacy Intervention Program for all school districts at $5,000,000 in each year of the biennium.

 

Mr. Hataway addressed the non-funded decision units requested by NDE that were not reflected in the budget: 1)  $144 million for a 3 percent cost of living increase for each year of the biennium; 2) $1.3 million to provide a grant to 15‑20 schools to develop, pilot and implement research-based models for English language learners; 3) $47 million for enhanced state support for special education; 4) $8.3 million for caseload reductions in special education in speech, resource room and early childhood programs.  This request was related to the new class-size standards adopted by the State Board of Education last year.  The Interim Finance Committee (IFC) approved the standards with the understanding that any additional federal funds would be used first.  Mr. Hataway noted that in another NDE budget there was $14 million a year of additional federal funds that would go to the districts for that purpose; and 5) $22 million would have moved the basic support one-fourth of the way to the average of all states.  The NDE proposal was a four-year process that would get the state to the national average.

 

Mr. Hataway requested members turn to the first two spreadsheets in Exhibit C.  Line 5 contained the basic support recommended to increase from $3,805 per student in FY2001 to $3,896 per student for each year of the biennium.  Line 6 was the total dollars related to total basic support.  Mr. Hataway noted that in the teachers’ tax initiative the definition of total basic support was the amount on line 6.

 

Line 8 was the Class-size Reduction (CSR) amounts.  The projected allocations increased from $86 million in FY2001 to $91.8 million in FY2002 and $97.7 million in FY2003.  The same process had been used to build the CSR projections as that used for regular classroom teacher projections, except the districts’ projections for individualized grades were used.  The projection for student enrollment increased by 4.86 percent in FY2002 and 4.68 percent in FY2003.  The districts projected an increase of 4.27 and 4.4 percent for first grade, 5.26 and 4.19 percent for second grade, and 4.97 and 4.86 percent for third grade.

 

Line 9 was the special education allocation recommended.  The allocation grew from $67 million in FY2001 to $72 million in FY2002 and $77 million in FY2003.  Lines 52 and 53 indicated the per unit allocations.  For FY2002, 2,402 units were recommended at $29,977 per unit; for FY2003, 2,514 units were recommended at $30,576 per unit. The units were driven by the growth that districts projected and the salaries were increased (roll-up) in the same manner as all other salaries.

 

Line 10 was the special gifted and talented program that was adopted last legislative session.

 

Line 11, Adult Diploma Education, was also calculated using the same method.  It grew from $13.7 million in FY2001 to $14.6 million in FY2002 and $15.6 million in FY2003.

 

Remediation, line 14, grew from $4.3 million in FY2001 to $8.1 million in FY2002 and $8.4 million in FY2003.  Professional Development grew from $3.5 million in FY2001 to $5.2 million in FY2002 and $6.1 million in FY2003.  Student assessment was included during the current biennium as a one-shot appropriation.  No funding was recommended in the DSA for the next biennium.  However, the ongoing costs for the operation and maintenance of the tests were built into the NDE proficiency testing budget.

 

Line 17 contained $5 million for each year of the biennium for the new Nevada Early Literacy Program.

 

Line 19 was a one-time allocation in FY2000 that adjusted how local school districts reported net proceeds of mines.

 

Line 20 was the Statewide Management of Automated Record Transfer (SMART), a student records system.  The $2 million in FY2000 and FY2001 was to complete the initial development of the program.  Funding for ongoing costs related to SMART were included in the NDE’s other state education budget account.  No developmental dollars were requested.

 

Senator Mathews asked if the SMART program was online in the Clark County School District.  Mr. Hataway replied that it was his understanding that more work needed to be completed in Clark County for the system to be completely operational, but local funds were going to be utilized to complete the project.

 

Mr. Hataway continued the discussion of the DSA budget summary.  Line 21, Education Technology--there was $1.9 million approved in FY2001.  Nothing was recommended in this budget for the next biennium, however, there was a one-shot appropriation recommended that included funding for technology and textbooks. 

 

Line 22, Distance Education/Satellite Downlink, nothing was recommended for the next biennium.  Funding in the current biennium was a one-time appropriation to assist with the conversion of those systems and nothing was requested.

 

Line 23, School-to-Careers program was tied to the five-year federal program that would go away in FY2002. 

 

Line 24, the additional enhancement for early childhood education was recommended to increase from $500,000 in FY2001 to $4.5 million in each year of the next biennium.

 

Senator Raggio asked if this was the program the Governor referred to that provided children not leave third grade without the ability to read.  He asked Mr. Hataway if he was going to discuss what was actually proposed.  Mr. Hataway stated he would discuss that proposal, but this was not the program the Governor referred to.  He indicated the Governor’s program was the early literacy program on line 17.

 

Senator Raggio asked how the early childhood program differed from the early literacy program.  Mr. Hataway indicated the early childhood program was a pre-school/pre-kindergarten program. 

 

Line 25--$850,000 was funded in FY2000 and FY2001 for school counselors.  It was recommended that the program continue in FY2002 and FY2003.

 

Line 26 was the special transportation costs authorized by statute.  Mr. Hataway explained that the funds provided for transportation of students from one county to another for school purposes and Lyon County School District was the only district that requested the funds.

 

Mr. Hataway addressed line 29, and indicated it represented the amount the state guaranteed and represented an increase from the current biennium to the next biennium of $352 million of total new expenditures that would be available to the local school districts to meet their needs.

 

Line 39, the state General Fund contribution to the mix, totaled $1.2 billion for the biennium and on line 54 the net increase in the General Fund appropriation was approximately $87.7 million for the biennium.

 

Mr. Hataway asked if there were any general questions he could respond to.

 

Senator Neal asked what percentage of the DSA was funded through the General Fund.  Mr. Hataway responded that the General Fund portion of the DSA was 29.5 percent for FY2000, 29.1 percent for FY2001, 28.2 percent for FY2002 and 27.4 percent for FY2003.  The CSR appropriations were not included in the percentages because historical comparisons did not include them.

 

Mr. Hataway went on to explain that as long as the non-General Fund revenues, most notably LSST (sales tax), the property tax, and motor vehicle privilege tax, continued to grow more than the general enrollment growth, the state would continue to see the amount required from the General Fund decline.  Also, this year the proposal (refer to line 44) of $29.5 million per year was recommended to be transferred from the Fund for School Improvement for estate taxes.  The two factors drove the percent of General Fund share down.  Mr. Hataway stated that if the recommendations on the Estate Tax were accepted, based upon current projections, by the end of the biennium approximately $8 million would still be in the Fund for School Improvement at the end of FY2003. 

 

Senator Neal said Mr. Hataway had answered his question, but it disturbed him that the General Fund portion was decreased.

 

Mr. Hataway stated that the General Fund was the ultimate guarantee for funding. The budget office took into consideration all of the additional revenues that districts received.  Growth in the Local School Support Tax (line 32) was several percentages higher than the General Fund—this had not been the case in the past.  As long as the non-General Fund revenues continued to grow at the rate they were growing the impact on the General Fund was mitigated.  If those revenues slowed down, the General Fund share would go up.

 

Senator Neal asked what percentage of the General Fund was the overall education budget. Mr. Hataway stated that in the education function, which included K-12, the University System and Cultural Affairs, the total was 13.6 percent growth in the first year and 13.3 percent in the second year.  Mr. Hataway indicated that the University System budget was recommended to increase by 18.5 percent in FY2002 and 21.7 percent in FY2003 and for K-12 the overall the budget provided for an increase of 12.2 percent in the first year and 8.76 percent in the second year.

 

Ms. Giunchigliani disclosed for the record that she was a public school special education teacher with the Clark County School District.  She asked Mr. Hataway to provide a list of student enrollments by county.  Mr. Hataway stated that student enrollment by district was contained in the NRS 387 Report prepared by the NDE.

 

Ms. Giunchigliani also asked Mr. Hataway to explain the rationale for keeping the per pupil amounts flat over the biennium.  Mr. Hataway stated that was the nature of the calculations.  He did not do anything with line 5, which reflected the average statewide basic support guarantee -- whatever the math comes out to be, it comes out to be.  Ms. Giunchigliani asked if more students were anticipated, would basic support be increased.  Mr. Hataway stated the $3,986 was a calculation of the total basic support divided by the projected number of students.  Once expenditures were calculated, then new growth in revenue was determined that reduced the amount.  The two big revenues outside the DSA were the 50-cent ad valorem tax and the motor vehicle privilege tax—if those were not growing as fast as they were, then the amount of $3,896 would be different.  Ms. Giunchigliani understood that the numbers would be reduced commensurately based on the numbers that would come in, however she thought it was irresponsible not to build the actual increase in dollars into the second year of the biennium.  Mr. Hataway stated the increase was built in but the revenues that the districts would be receiving were taken into consideration in the formula.

 

Ms. Giunchigliani noted that in The Executive Budget 15 percent and 16 percent was built in for inflation projected in electrical and heating costs.   News reports indicated that natural gas costs could increase as much as 40 percent and she asked how the increase would be addressed.  Mr. Hataway explained that any rate increases had to go through the rate hearings structure of the Public Utilities Commission (PUC).  It was not known what the actual increase would be, however, in previous testimony, Mr. Comeaux alluded to the fact that the fallback position the Governor was considering was the “rainy day fund.”  A Bill Draft Request (BDR) was being considered for submission.  Mr. Hataway explained the rainy day fund was accessed only if total actual revenue fell short by a certain factor, or if the Governor and the legislature declared a fiscal emergency existed.  The budget office would like to have approval of the legislature and the Interim Finance Committee so that if the energy costs continued to rise by some factor beyond what was built into the budgets, administration would have a vehicle to additional funds.  The IFC Contingency Fund could not be accessed since it would not have sufficient funding.  Mr. Hataway explained that increased energy costs would not just affect the DSA, but all of the budgets.  The budget was built using what the budget office thought they could afford.

 

Ms. Giunchigliani asked if she were to separate the increase built into the budget for the heating and electric costs from the actual growth, what percentage would actually be tied to student enrollment.  Mr. Hataway stated   his worksheet listed the per unit costs, or per unit value, and was relative only to how the budget had been constructed.  For the first year of the biennium that inflation rate represented $15.29 per student and in the second year $30.11 per student.  Mr. Hataway cautioned that it was not a factor of the difference between the $3,896 and $3,805, because equipment was pulled out of the base.   Under the scenario it would be $3,674 per student.  Mr. Hataway indicated he would deal with the issue in more detail in the subcommittee hearings. 

 

Ms. Giunchigliani asked how long 2 percent had been used for rollup costs. Mr. Hataway indicated 2 percent had been used since he began preparing the budget except for class-size reduction that was calculated at 3 percent.  Ms. Giunchigliani asked if the subcommittees had ever looked at the rollup issue.  Mr. Hataway stated roll-ups had been reviewed in 1995, but no change was recommended.  The roll-up was based on staff at the top of the pay scale versus new staff.  The difference in steps was approximately 4 percent, but the overall average was 2 percent.  Ms. Giunchigliani thought there might be an appetite to again look at the roll-up issue to determine if 2 percent was truly reflective.  Mr. Hataway agreed it should be revisited periodically.  He indicated next biennium the CSR roll-up would probably drop to 2 percent rather than 3 percent because as the program matured the average salaries were very close to the average salaries in the DSA.

 

Ms. Giunchigliani noted that Mr. Hataway had commented that the department had asked for special education dollars to fund the increased costs for the reduced caseloads, but those costs were not included the budget.  Mr. Hataway stated that was correct. He indicated the budget had an additional $14 million per year in federal funds that would be available in the next biennium for caseload reduction.  Ms. Giunchigliani stated it appeared to her while the actual dollar amount had increased for K-12 funding, the percentage of expenditure on the budget had actually declined. 

 

Mr. Hataway stated again that the General Fund portion had decreased but referred to line 29 of the summary that showed a $352 million dollar increase--a 12 percent increase.  However, Ms. Giunchigliani stated that if she backed out many of the other costs it was not really a per pupil increase.  Mr. Hataway explained the whole picture needed to be looked at since that was how the budget was constructed.  She stated that was true and could be debated later, but in her opinion the whole picture revealed that K-12 education was not funded adequately.

 

Mr. Goldwater asked if the special education unit funding was combined in the budget with the guaranteed basic level of support and Mr. Hataway responded it was not.

 

Senator Rawson asked about supplies.  He recalled in 1995, when supply expenditures were closely reviewed, there were two places set aside for supplies, and costs exceeded $100 per pupil. Mr. Hataway explained there was a separate operational line for textbooks, library supplies, instructional supplies, and other supplies.  Perhaps some of those line items were combined. Mr. Hataway stated he used the costs of instructional supplies as the example.  Senator Rawson stated probably the biggest complaint the legislators received from their constituents was that students did not have textbooks and asked Mr. Hataway if he had any idea how much was actually spent on supplies and textbooks.  Mr. Hataway explained the FY2000 work program amount was used as a general guide, and it mirrored the amount actually expended.  For textbooks the legislature approved $17.3 million in FY2000 and the actual expenditures in FY2000 were $13.6 million.  Senator Rawson understood more was appropriated.  Mr. Hataway explained that school districts did not buy textbooks in a uniform manner.  They might buy reading one year, skip a year, and then buy science books the next year.  The Budget Division dealt in a global fashion to allow districts to determine how funds would be expended.

 

Senator Rawson explained districts operated local special education units in addition to the state-funded units.  He asked if the DSA was making progress in funding the local units or if the additional new numbers were based on growth. Mr. Hataway stated the new units would keep up with projected enrollment growth.

 

Mr. Hataway addressed the last three pages of his handout--spreadsheets related to three of the more significant new items recommended for the subcommittee’s consideration.  The first was related to the Nevada Early Literacy Intervention Program.  Mr. Hataway indicated the bill draft was still being finalized, but the allocations would be based on the percentage of enrollment in each district.  Clark County School District, being the largest, would receive 67.86 percent of the funds.  In the past, some allocations provided a base amount for each district, and the Governor was not adverse to changing the allocation method. 

 

The second new item was the allocation for training, textbooks and technology.  Again, using enrollment as an allocation factor, Clark County would receive 67.86 percent.  The point Mr. Comeaux had emphasized at an earlier meeting was funds would be allocated directly to the districts, and it would be a local decision based on local need as to how the funds would be used.  If Clark County wanted to use the entire $13.5 million for technology, they could.  Senator Raggio asked Mr. Hataway to clarify if this would be a one-time appropriation.  He asked how it tied into the line in the DSA that included textbooks.  Mr. Hataway stated it would be in addition to that line item.  Senator Raggio indicated the amount included in the DSA for FY2000 was $43.43 per pupil. The Governor recommended the same amount in the DSA line item again.  An audit had been conducted that indicated the average amount expended by school districts over a ten-year period had never reached what was included in the budget.  Senator Raggio expressed annoyance with school districts, teachers, and others who indicated that appropriate funding had not been provided for textbooks. However, the districts never expended what was included in the DSA for textbooks.  Senator Raggio wanted the public to be aware that if the Governor’s one-shot for technology, training and textbooks was approved, the amount included in the basic support per pupil would not be lowered.

 

Senator Raggio asked about the maintenance line item reported in the NRS 387 Report.  In FY1999, expenditures for maintenance were $5.2 million and actual for FY2000 jumped to $14.6 million.  The budget included $16 million for FY2002 and $16.7 million for FY2003.  Mr. Hataway stated that the districts needed to be questioned about the numbers. Senator Raggio asked Mr. Hataway to clarify the difference since the increase was so significant.  Mr. Hataway indicated many districts had a great deal of deferred maintenance and funds might have been used to catch up in this area.

 

Chairman Arberry stated the $20 million for the training, textbooks and technology was like a moving target--yesterday the funds could have been used for training, today for technology and tomorrow for textbooks. Chairman Arberry asked how the expenditures would be tracked, and Mr. Hataway indicated that the districts would be required to report how the dollars were actually spent.  Chairman Arberry again expressed concern about how the funds would be used and how the districts would be held accountable.  Mr. Hataway stated that the districts would be required to budget for the funds separately from their general fund and submit a final report detailing how the dollars were utilized.  

 

Senator Coffin asked about the charter schools.  He recognized that some had rocky starts but survived.  Senator Coffin was concerned the $20 million for training, textbooks and technology would not be enough for training.  He asked if charter schools had input on how much of the funding they would receive.  Mr. Hataway responded that the allocations were based on actual enrollments and noted  some of charter schools had more students enrolled than some of the smaller school districts.  He went on to state there might be an appetite to provide a minimum base allocation and then a general allocation based on enrollments.  Senator Coffin said it appeared that allocations were not firm and could be changed.  Mr. Coffin indicated again that some of the charter schools, not all, were doing a very good job and he wanted to make certain sufficient funds were provided to them for training in addition to what they would receive from basic support.   Mr. Hataway stated it would be up to each local education entity to determine how the funds would be used. 

 

Senator O’Donnell questioned why the funding was not recommended for satellite distance learning.  Mr. Hataway indicated that the allocation provided last biennium was one-time funding that allowed for conversion from analog to digital.

 

Senator O’Donnell asked if the Technology Commission was still intact, and Mr. Hataway affirmed it was and had requested $108 million from the legislature.    Senator O’Donnell asked if the $20 million recommended for training, textbooks, and technology would go through the Technology Commission.  Mr. Hataway explained the $20 million would be disseminated directly to the school districts, and no funding had been included in the budget for the commission. Since the NDE had responsibility for maintaining technology in the state, Mr. Hataway indicated funding to cover meetings might have been built into their budget.  Senator O’Donnell said in the past the legislature allocated $29 million to bring the schools up to a certain level of technology and some schools were still not at the level they should have been.  Some of the smaller districts required more funding for technology than the larger districts.  Senator O’Donnell was concerned allocations based on enrollments would not address the technology needs of each district.  Mr. Hataway recalled the Technology Commission did take into consideration the needs of the rural districts as well as the urban districts in the initial allocations.   He also indicated federal technology funds were built into the NDE budget. Senator O’Donnell again expressed concern that funding for technology would not go directly to the Technology Commission.  Mr. Hataway stated the Governor believed there was a pressing need for additional training, textbooks and technology in the local districts and felt it should be a local decision how the funds would be spent.

 

Mr. Goldwater asked if one-shot appropriations had been utilized in the past and Mr. Hataway indicated they had.  Mr. Hataway explained the first items included in building the budget were basic support and ongoing enhancements, then an effort was made to make certain the districts would be covered in terms of growth and inflationary needs.  Mr. Goldwater asked why the $20 million was to be distributed in the manner presented.  Mr. Hataway responded the funds were surplus dollars, and the alternative would have been not to use the additional funds.  Surplus funds were also used to provide the initial $29 million for technology.  Mr. Goldwater indicated he was not comfortable with the method and hoped the issue would be revisited.  Mr. Hataway explained the surplus funds could not have been included in the operating budget since the Governor had to present a balanced budget.  Mr. Hataway referred to the final spreadsheet and stated it had also been built using the same method.  Mr. Hataway explained the $194 million surplus was recommended in the budget for one-shot appropriations and had nothing to do with balancing the budget for ongoing expenditures.

 

Mr. Hataway presented the last spreadsheet (Exhibit C) that detailed the $57.5 million one-shot appropriation proposed for the cost of living bonus for school district employees.  The salary amounts included in the first four columns (General, CSR, Adult and Other) were audited FY2000 numbers from the NRS 387 Report for each of the employee categories included in the various budgets. Salaries totaled $1.15 billion statewide, and Clark County School District total salaries were 65.29 percent of that total.  Under the formula they would receive $37,541,883.  The allocations, based upon FY2000 audited numbers, would provide for an approximate 5 percent bonus.  The percentage would probably be somewhat less than 5 percent when districts applied their FY2001 salaries.

 

Ms. Leslie asked if new charter schools opened during the next biennium would be eligible for the funds recommended for training, textbooks, and technology.  Mr. Hataway stated that once the bill was passed the dollars would be allocated based upon current enrollments.  If a new charter school opened in 2003 they would have to wait for the next legislative session.  Ms. Leslie also asked if the districts would have the option of choosing a literacy program or early childhood program and if there would be requirements about using research-based models.  Mr. Hataway stated the Governor did not want to dictate specific programs.  The literacy program funds were to be used to train K-3 teachers.  Ms. Leslie explained many districts had already trained teachers and wondered if the funds might be used to provide teacher aids or bilingual staff to conduct additional literacy training.  Mr. Hataway stated using the funds for anything other than training teachers could be discussed with the Governor.  Ms. Leslie thought expanding the use of the funds should be considered.

 

Senator Neal asked Mr. Hataway to review the cost of living bonus spreadsheet.  Mr. Hataway reiterated the numbers in the spreadsheet were the actual FY2000 audited salaries and the bonus allocation was 5 percent of the total salaries.  Mr. Hataway also explained the funds were recommended from the $194 million surplus allocated for one-time appropriations.  Senator Neal commented that the teachers had asked for a salary increase, not a bonus.  Mr. Hataway stated that the NDE had calculated a 3 percent salary increase would cost $144 million and funds were not sufficient to provide for salary increases. 

 

Senator O’Donnell observed each biennium the surplus funds available had increased and thought a direct appropriation to the DSA for teacher salaries would be better than a bonus.  Senator O’Donnell noted if teachers were polled, they would prefer a $2,000 raise.  Mr. Hataway stated that the Governor was on record saying if additional dollars were included in the Economic Forum projections in May, teacher salary increases would be his first priority.  Additionally, if revenues developed during the interim he would support a special session of the legislature.   Any raises had to be incorporated into the basic support per pupil allocation and required passage of a bill.

 

Senator Raggio indicated everyone would like to see raises using ongoing revenues, however, the surplus contained dollars that were only available for the current biennium.  Senator Raggio stated a suggestion had been made to raise the gaming tax.  He indicated the current Governor suggested in the Fundamental Review that all areas of the present revenue sources be revisited.  Senator Raggio explained that most of the growth had been in the property tax and most of that was earmarked for local governments. 

 

Mrs. Chowning asked if the recommendations made by the various interim committees; i.e., the Academic Standards Council, the Legislative Committee on Education, the State Board, etc., were included in the budget.  Mr. Hataway indicated that many of the interim committees’ recommendations were incorporated into the budget.  He explained that one key recommendation that came out of the Academic Standards Council was an additional day for teacher training and that was not built into the budget.

 

Ms. Giunchigliani asked Mr. Hataway if anyone had tracked how many teachers had elected to leave the teaching profession during the last five years and he stated he did not have the information.  Ms. Giunchigliani indicated she would ask the NDE for the information.

 

Mr. Hataway stated that the textbook amount included in the budget was the total amount districts expended for textbooks.  Ms. Giunchigliani noted textbook expenditures were included in the DSA budgets and local boards might have allocated the funds for textbooks, however, districts differed on the method of distributing the funds and advising the schools sites how funds were to be used. Ms. Giunchigliani also indicated there was a “hole in the budget” and thought it was time to consider the possibility of increased taxes.  Mr. Hataway indicated it was his opinion there was not a hole in budget.

 

Chairman Arberry commended Mr. Hataway for an excellent presentation.  Chairman Arberry reminded the members the Governor’s budget was not “set in stone” and members could elect to take the recommended 5 percent bonus and turn it into a salary increase.

 

Senator Neal asked the percentage of the General Fund allocated to all of education in the proposed budget.  Mr. Hataway replied it was 52 percent.

 

Chairman Arberry recognized Keith Rheault, Deputy Superintendent for Instructional, Research and Evaluative Services, Nevada Department of Education.

 

Dr. Rheault began with an overview of the major issues that impacted the DSA funding.  He referred to a handout that was distributed to members and requested they note the contents of the handout (see Exhibit D).

 

The following documents were included in Exhibit D:

 

·        A brochure that included the State Board of Education bill drafts and the board’s accomplishments over the last two years;

 

·         A one-page handout titled Education Spending In Nevada.  The document was compiled by WestEd, a non-profit regional laboratory, that serves California, Nevada, Utah and Arizona;

 

·        A one-page comparison of expenditures of Nevada school districts beginning in 1997 through 2000.  It listed percentages of growth in various categories;

 

·        A copy of the department’s “Power Point” presentation;

 

·        A one-page summary that listed all of the department’s budget accounts; and

 

·        A one-page synopsis on Budget Account 2610, Distributive School Account.

 

The final two items in the packet were informational items: 1) the Research Bulletin which contained student and licensed personnel information by district, by grade and ethnicity; and 2) a listing of all of Nevada’s public schools, school addresses, administrators, telephone numbers, facsimile numbers, grade spans, and enrollments.

 

Dr. Rheault proceeded with the “Power Point’ presentation.  He reported seven major issues that affected DSA funding:  1) enrollment and growth; 2) class sizes; 3) diverse populations; 4) higher expectations; 5) need for remediation; 6) professional development and technology tied to higher standards; and

7) facilities and operational expenses.

 

Dr. Rheault indicated that enrollment statewide had increased steadily since the 1986-87 school year.  Growth last year was 4.7 percent in  total enrollments, the growth for the current school year was 4.4 percent, slightly lower than the previous year.  However, the number of new students had increased from 311,063 to 325,610 and the current year enrollment had increased another 15,000.  The increase was higher than the enrollment of Elko County School District, the third largest district in the state.  The growth each year compared to adding one large school district every year.

 

Dr. Rheault testified only six school districts showed some growth in student enrollment in the 1999-2000 school year:  Clark at 6.7 percent, Nye at 3.4 percent, Washoe at 3.2 percent and Lyon at 3 percent, Churchill at 0.5 percent, and Carson City at 0.1 percent.  Only five districts had increased enrollments in the 2000-2001 school year. Dr. Rheault noted Esmeralda County School District had increased 1.9 percent, but the percentage of increase represented two additional students--the enrollment had increased from 105 students to 107 students.

 

Mr. Beers asked about the recent trend in distance learning.  It was his understanding White Pine County School District advertised distance learning and pulled students from Clark County.  Mr. Beers inquired where those enrollments were reported.  Dr. Rheault stated students from Clark who were enrolled in White Pine’s Nova Center would not be reported since most of the students were either dropouts or home-schooled students.

 

Dr. Rheault addressed declining enrollment.  The first year of the biennium there were 11 school districts that lost over 12 percent of their student enrollment.  In the past the legislature had provided funding to White Pine and Lincoln Counties for facilities; Mineral County had assessment problems and received emergency funding.  The current fiscal year many of the same school districts had declining enrollments.  Eureka County had experienced major cuts due to a 13.8 percent enrollment decline.  Dr. Rheault emphasized districts with declining enrollment still needed the same amount of funding for heat, electricity, and transportation.  The “hold harmless” provision in statute required payment to a district based on the current year’s enrollment, or the previous year’s enrollment, whichever was higher.

 

The class-size ratios for the prior year remained constant.  Nevada received an “F” for school climate in a recent Education Week report, “Quality Counts,” primarily due to the average class sizes in grades 4 and 8. In kindergarten through grade 3, Dr. Rheault indicated Nevada was one of the leaders in the country as far as small class sizes.  Those class sizes had remained constant from last year to this year.  The percent of team teaching during the 1999-2000 school year was 25.7 percent in grade 1 and 30.6 percent in grade 2.  The only difference in the figures for the 2000-2001 school year was a reduction in team teaching in grade 2 down to 26 percent.

 

Senator Neal asked what Dr. Rheault meant by percentage of self-contained.  Dr. Rheault explained a self-contained classroom had only one teacher in one classroom.

 

Mr. Beers asked if the percentage of self-contained classrooms was the sum of each districts’ percent of self-contained divided by 17, or if it was the number of students overall.  Dr. Rheault stated each classroom was added for each grade and divided by the total number of teachers reported by the districts as teaching in self-contained classrooms.  Mr. Beers asked if there was a county-by-county breakdown of CSR ratios and classroom configurations and Dr. Rheault indicated there was, and he would provide Mr. Beers with a copy.

 

Dr. Rheault again referred to the “Quality Counts” report and explained the criteria used were the average class size statewide for grade 4 and the average reading class size in grade 8.  In the ranking, Nevada ranked last among the states having only 35 percent of the classes with 25 or fewer students.  The national average was 71 percent.  In grade 8 reading classes the only state that came in lower than Nevada was Alabama.  Nevada’s average was 33 percent.  Finally, of the 50 states in the report, Nevada ranked 48^th in the percentage of students in elementary schools with 350 or fewer students.  Only 6 percent of Nevada’s elementary schools were under 350 students, the other elementary schools were quite large compared to the rest of the nation.

 

The number of special education students increased by 7.6 percent during the first year of the biennium.  The general population increased by 4.7 percent.  There were 35,847 special education students in the previous fiscal year.  As of December 1, 1999, 11 percent of Nevada’s public school students were enrolled in special education classes.  There were 3,681 at-risk early childhood students (ages three, four, and five) enrolled as of December 1, 1999.  Federal special education regulations were changed eight or nine years ago and there was a big jump in special education enrollments.  The last few years’ growth had been fairly constant.

 

Ms. Giunchigliani asked if the special education units proposed by the Governor reflected the 7.6 percent increase.  Dr. Rheault thought the budget office had used 4.5 percent enrollment growth, not the special education growth. Ms. Giunchigliani expressed hope the K-12 committee would address that issue in addition to the issue of whether special education was fully funded.

 

Ms. Giunchigliani also asked if special education was categorical in the recommended budget or was it rolled into the basic support per pupil.  Douglas Thunder, Deputy Superintendent for Administrative and Fiscal Services, Department of Education, responded special education was within the DSA, however, it continued to be calculated on a per unit basis.

 

Mrs. Cegavske asked what effect the federal increase in special education funding would have.    Dr. Rheault responded one of the largest increases in federal funding was in special education.  The increase was approximately $14 million in additional funding over what would be received in FY2001 and would go a long way to support and supplement what had been provided in the budget.

 

Mrs. Cegavske stated the Education Commission of the States would have resolutions for increased funding for special education from every state.  The resolutions would be forwarded to the federal government. She hoped the NDE would be supportive and would send letters to the Commission. Dr. Rheault indicated the NDE would forward a letter of support.

 

Mr. Goldwater asked if the districts would be able to differentiate between the regular basic support and the special education units.  Mr. Thunder responded each quarter when districts were paid from the DSA they were notified of the amount of special education unit funding and the amount of the basic education program.

 

Dr. Rheault continued with his presentation.  The English language learners represented about 10.6 percent of the total enrollment, approximately 34,000 students.  Mrs. Chowning stated Nevada had the fastest growing population in the United States in this area.  She asked how this growth compared to last year and the rest of the nation.  Dr. Rheault indicated he did not have all of the figures with him, but the growth had declined slightly.  For a few years Nevada had grown at 20 percent. Dr. Rheault would provide the requested figures.

 

Approximately 40 percent of the state’s elementary students were identified as being economically disadvantaged—a factor that required additional remediation.  Last year, 11,040 of Nevada’s students were enrolled in gifted and talented programs and those programs also required additional resources.  Another area noted by Dr. Rheault was Nevada’s high rate of transiency—the state average was 38 percent, with Clark County having the highest rate at 43 percent. The adult education population had increased consistently.  During the 1999-2000 school year the English language learners made up 43.8 percent of the total enrollment in the Adult High School Diploma Program and 67.7 percent of the Adult Basic Education Program.  Additional funding was included in The Executive Budget for adult education.

 

Ms. Leslie asked if the department had used the Free and Reduced Lunch Program counts as the criteria for determining that 40 percent of the students were economically disadvantaged.  Dr. Rheault responded that was correct.

 

Dr. Rheault testified the dropout rate declined last year to 7.8 percent due in part to legislation passed that placed Nevada more in line with the method other states used to report dropouts.  Nevada was always at the top of the dropout list.  Previously Nevada students who dropped out and enrolled in adult education programs were included in the dropout counts.  Through changes in the federal requirements and the way other states reported numbers, students who left a traditional high school and enrolled in adult programs were no longer considered dropouts.

 

Mr. Thunder added there was a recent report that Nevada was third in the nation in dropouts.  Mr. Thunder did not think the importance of that report should be underestimated; however, only 38 states were included in the report, and the 12 states not included contained over half of the population of the country.

 

Dr. Rheault stated that the dropout percentage rates by ethnicity were highest among Hispanic (11.9 percent), black (11.2 percent) and American Indian (9.1 percent) students.  Many of the school districts were working hard on new programs to reduce the number of dropouts.  The next dropout report would be completed by late March or early April.

 

The Educational Reform Act required higher standards for all students: 1) new academic standards in English, mathematics, science, social studies, health, physical education, computers and technology, and the arts; 2) increased accountability for student achievement through statewide assessments. The legislature paid for criterion-referenced tests that would be implemented in the spring in a pilot format for grades 3 and 5 along with all the other assessments paid for by the state; and 3) the expectation that all students would achieve through increased remediation.

 

Dr. Rheault referred to the assessments.  The TerraNova performance for the last three years indicated that grade 4 students were doing well in language and math, however, in reading Nevada was at the 48, 49, and 50 percentile.  Dr. Rheault indicated the $5 million included in the biennial budget for early literacy could result in improvement in grade 4 reading.  In  grade 8, math needed improvement.  In grade 10, Nevada students were above the national average in all areas.

 

Dr. Rheault discussed the chart on page 10 of the presentation that detailed approximate passing rates among grade 12 students enrolled at the end of the school year having sufficient credits to graduate.  Members were reminded the new standards would not be included in the high school proficiency tests until next year.  In writing, 99.5 percent of the students passed in 1999 and 99.8 percent of the students passed in 2000; in reading, 99.4 percent and 99.5 percent; and in math, 95.6 percent and 93.4 percent passed.  Six and one-half percent of seniors did not receive a diploma in FY2000 due to failing the math test.  Dr. Rheault again indicated a great deal of money had been spent in this area on remediation.  Mrs. Chowning asked how the percentage compared to the percentage reported in the 1999 session.  Dr. Rheault responded he did not have the 1998 figures with him, however, he recalled that was the first year that had moderate growth and thought the 1998 percentages were close to the 1999 numbers indicated on the graph, approximately 5.5 percent. Dr. Rheault indicated the numbers were available and he would provide the information to Mrs. Chowning.

 

Senator Raggio reminded everyone that testing was currently conducted on the old standards and asked when students would be tested on the new standards.  Dr. Rheault responded the test was in the development process and the full exam would be field tested in the spring of 2001. The test based on the new standards would be administered to juniors enrolled in the fall of 2001 who would graduate in 2003.  Senator Raggio indicated the public needed to be apprised of the new timelines.

 

Dr. Rheault presented statistics related to college entrance scores.   He indicated more students had taken the American College Testing (ACT) exam and the Scholastic Aptitude Test (SAT) and scores had been maintained or increased slightly more than the national average.  He commented the new Millennium Scholarships might encourage more students to take the ACT and SAT.  In the 1999-2000 school year, 5,474 students took the advanced placement exams, an increase of 7.8 percent over the prior year.  Additional federal funding was received in FY2001 that covered the cost of the exams for at-risk students.

 

Mrs. Cegavske asked how many times students could take the practice tests and if they were encouraged to take the ACT and SAT more than once.  On the ACT and SAT tests Dr. Rheault deferred to the school districts.  Mrs. Cegavske said it was interesting that in the 1998-1999 school year several of the students she spoke with at some of the high schools had taken the tests two to three times.  Then in the 1999-2000 school year the majority of the students had taken the tests only once.  It was Dr. Rheault’s opinion that taking the test in the fall of the junior year was too early and students would do much better waiting until their senior year if they were only going to take the tests once. Mrs. Cegavske said the theory originally had been for students to take the test early and get used to the test, look at some of the questions, and then go back and test again.

 

Dr. Rheault addressed school remediation.  Of the 485 public schools 20 were identified as having high achievement, exemplary achievement or needing improvement.  The remaining schools were adequate or average.  In April of 2000, eight of the schools were designated as having high achievement—40 percent of students tested in grades 4, 8 or 10 were in the highest quartile of tests in all four subject areas.  Two schools were designated as having exemplary achievement—50 percent of the students were in the top quarter.  Ten schools were designated as needing improvement—over 40 percent of the students tested scored in the bottom quarter of all four testing areas: reading, language, science and math. 

 

Dr. Rheault indicated the remediation funding recommended in the budget was based on testimony of the Legislative Committee on Education.  Dr. Rheault indicated the commission’s testimony was what districts had requested except schools that were short in one of the four subject areas would not receive funding.   Last biennium $1 million was provided each year for remediation for individual students.  Most of the funds had gone directly to school districts to support remediation for the high school proficiency test.  Ms. Giunchigliani agreed that most of the funds went to the high schools.  The funds were also intended to go to students who would have qualified for summer school needs or intersession needs to make certain they graduated from grade 8.  She asked if there was a breakout on how many districts actually used the funds to assist those students.  Dr. Rheault stated he did not have that information with him, but the funds were distributed to the districts based on district applications.  The NDE would be requesting a final report from the districts that would detail expenditures and the population served.  Ms. Giunchigliani indicated it was better to help the students on the front end rather than waiting until the back end.  Dr. Rheault continued discussing students who were not enrolled in schools designated as needing improvement.  Of the students who took the grade 4 TerraNova test, 20 percent of the students were in the bottom quartile in reading; 26 percent of the grade 8 students and 24 percent of grade 10 students were in the bottom quartile in math.

 

Dr. Rheault addressed school staffing and indicated in FY2000, 10 percent of  Nevada’s public school teachers were new to the state.  Additional training was needed for the new teachers to enable them to teach to Nevada’s standards.  Of the licensed personnel in FY2000, 1.1 percent was American Indian, 1.6 percent was Asian, 4.2 percent was Hispanic, and 4.6 percent was black.  The student ethnic percentages were much higher in the same four categories.  The average salary reported in the bulletin (see Exhibit D) in FY2000 for all licensed personnel was $41,708 and was reported slightly lower in the DSA budget.

 

Ms. Leslie asked about the minority staff issue.  Given that the dropout rates were also highest in those minority categories, did the NDE have the school districts report efforts made in recruiting and retaining minority staff and was   special help provided to the districts in this area.  Dr. Rheault responded the state had not provided any special assistance to districts since the 1995 legislative session, which had provided funding for recruiting and retention of minority teachers.  Dr. Rheault also stated the state had not collected any data from the districts related to recruiting and retention of minority staff.  He indicated the districts collected the information, but it was not collected or compiled at the state level.  Ms. Leslie asked if the NDE had requested any funding for this area and Dr. Rheault responded they had not, but would support any effort for a bill draft.

 

Senator Neal asked what the average salary would have been if all non-classroom personnel were extracted from the average salary amount.  Dr. Rheault indicated that the Research Bulletin (see Exhibit D) provided salary information for the various staff assignments: superintendent, principals, directors, etc.  Doug Thunder stated licensed staff personnel information was based on contract data received from the districts.  The number referred to earlier by Mr. Hataway was based on the total salaries paid divided by the total FTEs.

 

Senator Coffin asked if the districts reported ethnicity in a uniform manner.  Dr. Rheault stated the ethnic numbers had been collected for the past 20 years and he would find the answer and provide the information to Senator Coffin.

 

Senator O’Donnell asked if there was quantifiable data indicating why teachers did not renew contracts and if the districts tracked that information.  If teachers left due to a lower than normal salary and made career moves because they could not afford to teach, was it wise to spend $16 million for a new college to teach teachers who would turn around and leave.  Dr. Rheault stated a speaker at a recent meeting he attended reported the salary issue was third on the list.  The first reason was lack of support received from the district and at the school site, and the second reason was discipline/classroom management issues.

 

Senator Neal asked if having large numbers of new teachers lowered the average salary.   Dr. Rheault indicated average salaries stayed fairly consistent because of the large number of employees. 

 

Ms. Giunchigliani asked Dr. Rheault to provide a breakdown of all licensed personnel: superintendents, principals, deans, facilitators, counselors, etc.  She also asked Dr. Rheault to request from the districts data on the exit interviews or whatever information they had collected on why teachers were leaving.  Ms. Giunchigliani indicated to her knowledge districts were not conducting exit interviews and should be. 

 

Mr. Beers asked Dr. Rheault to provide the same data from other states as far as the number of teachers who had decided to leave the profession.  Dr. Rheault indicated he would check national data reports to see if Mr. Beers’ question was addressed.

 

Dr. Rheault stated that during the last two biennia, state appropriations specifically earmarked for educational technology were approximately $40 million.  In 1997 the computer to student ratio in Nevada was 28:1 and in  1999 the ratio was reduced to 12:1; however, the state currently was still above the national average of 19.8:1.  Internet access had also increased since 1997 when 53 percent of schools had access compared to 81 percent in 1999.  The national average in 1999 was 90 percent.  Districts’ concerns included need for additional staff in areas of technology and funding for equipment maintenance and upgrading of software.

 

Mrs. Cegavske asked if special education had a difficult time getting technology funding more so than gifted and talented classrooms or the regular classrooms.  Mr. Thunder indicated the standards the Commission on Education Technology established emphasized the needs of special education students.  Mrs. Cegavske stated funding for technology was not a high priority for special education based on her discussions with special education staff at many of the schools.  She emphasized that special education students did very well on computers and asked that the issue be addressed.

 

Ms. Tiffany asked if there was a state or district philosophy on whether the hardware being added in the schools was located in classrooms or labs.  Mr. Thunder stated that the location of the hardware was a local school district option.  Ms. Tiffany also asked if anyone had information on all of the programs that had been implemented, not just the hardware.  She asked Mr. Thunder to provide a hardware report in a timely manner so the information could be used in the K-12 subcommittee hearings.

 

Dr. Rheault stated that at a recent meeting of the Superintendent’s Finance Committee many concerns had been raised, and the greatest concerns were the rising energy costs and rising group insurance costs.  The districts were very hopeful that the legislature would address the two areas.

 

Dr. Rheault also listed the major issues that were addressed in The Executive Budget:  1) growth, 2) class-size reduction, 3) special education/early childhood education/literacy, 4) adult education, 5) inflation, 6) professional development, technology and textbooks, 7) student assessments, and 8) facilities and operational expenses.

 

The NDE addressed issues that needed additional attention:  1) Adequate long-term funding for K-12 education--the number one priority of the State Board of Education was a graduated method that increased Nevada per-pupil expenditures closer to the national average; and 2) even though facilities and operational expenses were addressed in the budget, the NDE indicated the 15 percent increase in heating and 16 percent increase in electricity expenses within the budget were insufficient.

 

Chairman Arberry questioned if a bill should be requested to prevent the power companies from selling the power plants.  Mr. Hettrick indicated that Sierra Pacific Power Company indicated that contracts had been signed and it would have been in violation of the contracts to stop the sales.  He continued that unless the state wanted to assume the liability of the violation of the contract the power plants would probably be sold.   Ms. Giunchigliani felt the Consumer Advocate had acted and the members needed to take a position on not allowing those power plants to be sold. 

 

Mr. Goldwater pointed out the school districts were consumers and discussion should be limited to determine if the amounts included in the budget needed to be higher or lower.

 

Senator Neal stated Nevada’s constitution was different in terms of contracts than the U.S. Constitution.  Nevada’s constitution allowed, if public purpose had been damaged by a contract, that contract could be terminated.

 

Al Bellister, Nevada State Education Association, focused his remarks on the salary portion proposed for the DSA.  He reminded members of a report commissioned by the National Education Association (NEA) authored by Hal Hovey on the structural deficit.  The report indicated Nevada had the largest structural deficit in the nation.  Mr. Bellister indicated for the third time in less than ten years public schools were not recommended for a salary increase in either year of the biennium.  Funds had not been sufficient for meaningful, sustained salary increases for public school employees.  Nevada had trouble attracting and retaining staff in public schools.  Mr. Bellister noted there was a salary gap between salaries of public school employees and private sector salaries for positions that required the same type of training and education.  The “Quality Counts” report published by Education Week discussed a gap for teachers in Nevada of about $13,000 with a bachelor’s degree and $22,000 with a master’s.  Clark County School District’s starting salary for teachers was $26,847.  Of the 20 largest school districts in the nation, of which Clark County was one, Clark County was nineteenth in terms of starting salaries.  The average scheduled starting salary for a teacher in that same urban school district group was $30,800.  Mr. Bellister also stated Nevada was having trouble attracting and retaining teachers.  Of the teachers in Clark County, only 31 percent had ten years or more experience.  In the 1997-1998 school year, Clark County hired 1,600 teachers, of those 28 percent had left, an average of 7 percent per year.  The National Center for Education Statistics (NCES) annually compiled an attrition rate report and the national average was approximately 6 percent.

 

Mr. Bellister continued, the one-shot bonus proposed by the Governor, did not solve the problem. If salaries were currently $26,847 they would be $26,847 in two years.  The state salary survey cited by Mr. Comeaux at the hearing on January 23, 2001, indicated city and county employees over a five-year period increased 23.4 percent, state employees increased 16 percent, school district employees increased 14.8 percent.  Mr. Bellister stated in terms of total spending K-12 was 17.7 percent of total spending during the current biennium and next biennium it would be down to 16.2 percent.  It appeared that K-12 education, in terms of total spending, was no longer a priority.  Mr. Bellister encouraged the members to revisit the issue.

 

Ms. de Braga asked Mr. Bellister if the statistics indicated how many teachers left teaching or left Nevada.   Mr. Bellister stated he had reviewed some of the exit interviews and the reasons indicated were lack of support and low salary. 

 

Mr. Hettrick told Mr. Bellister the statistic that 31 percent of teachers with ten years or more of experience was skewed and the number was not meaningful.
The number of 28 percent retention was perhaps far more meaningful, however, more background was needed.  Mr. Hettrick asked, of the 20 urban districts mentioned how many had income tax and if cost of living was factored in.  If the other districts had income tax, Nevada was ahead of the curve, not behind it.  Mr. Bellister stated he had only compared salary schedules.  Mr. Bellister said of the 12,000 teachers in Clark County, 45 percent had less than four years of experience.  Mr. Hettrick stated that was a factor of growth--because of the huge growth a large number of new teachers had been hired.

 

Mrs. Cegavske had spoken with representatives of other states through her membership in the Education Commission of the States and explained every other state had the same problems Nevada experienced.  Nevada was one of the states accused of “stealing” other teachers.  She wanted everyone to be aware that recruiting and maintaining teachers was a national problem.

 

Mr. Beers asked if the percentage of teachers with less than ten years of experience was skewed by the fact that we did not give credit to someone who had taught ten years in another state.  Mr. Bellister indicated he did not adjust for out-of-state experience; his numbers were based strictly on the number of years teachers were employed by the Clark County School District.

 

Senator Raggio asked Dr. Rheault to provide teacher salary information including retirement benefits.  He asked if Nevada was still the only state that did not include the employee portion of retirement paid by the employer.  Mr. Thunder stated NDE had indicated the amounts on national reports and was not certain if they had been successful in having the amount incorporated.   Senator Raggio asked Mr. Thunder to confirm if the amount was or was not included in the national reports.  Senator Raggio wanted the NDE to report on how the retirement affected both the average starting salary and the average salary of $40,511.

 

Senator Raggio took exception to Mr. Bellister’s statement the average beginning salary would be the same in two years.  Teachers still had the ability to bargain at the local level.  To provide a clear picture, he asked the department to provide, by county and statewide, the percentage of increases actually received by teachers during the last three biennia as a result of legislative action and a result of collective bargaining.

 

Senator Neal remarked for the first time in Clark County they had over 500 teachers turn down moving to Vegas because they could go elsewhere and get better salaries.

 

DEPARTMENT OF HUMAN RESOURCES

DIRECTOR’S OFFICE BUDGET OVERVIEW

 

Chairman Arberry recognized Charlotte Crawford, Director, Department of Human Resources (DHR).  Mrs. Crawford introduced the department’s leadership team and then referred to the handout, Nevada Department of Human Resources, Overview of Budget Presentations to the Money Committees of the 2001 Legislature, (Exhibit E).  Mrs. Crawford indicated that DHR was Nevada’s health and human services agency. 

 

Mrs. Crawford referred to the organization chart on the first page and explained DHR was organized into six major divisions: 1) Aging Services, 2) Division of Child and Family Services, 3) Health Division, 4) Mental Health and Developmental Services, 5) Welfare Division, 6) Health Care Financing and Policy.  The Nevada State Public Defender’s Office and the Indian Commission were also under DHR.  Mrs. Crawford defined Community Connections; a grouping of services that coordinated funding that flowed to community programs.  Mrs. Crawford explained the boxes on the organizational chart merely defined the programs within the department.  Operationally, the boundaries did not define the programs.  The health and human service programs interfaced and coordinated with each other, and formed a fabric of services that promoted the well-being and health of Nevada citizens.  The funding streams also formed a matrix.  Funding streams such as Medicaid and Title XX had funded multiple programs and crossed the boundaries of the programs.

 

As requested by Governor Guinn last biennium, DHR had formed a management team concept within the agency that had provided a more centralized department. The three management structures formed were: 1) the leadership team, made up of the director, the deputy administrator, and the division administrators; 2) a fiscal analysis team (FAT), made up of the chief financial officers within DHR, and 3) the chief personnel officers.  A caseload group was added, the fourth structure, which projected caseloads across the agency.  Each group met weekly and worked as a department steering committee, a management committee, and a leadership committee.  The structure allowed each program and the department to perform in a more coordinated fashion.   The teams worked closely in the budget development that began with the fundamental review process.  In accordance with Governor Guinn’s request,  DHR closely evaluated their budgets, determined what their mission was and who was the target population, evaluated their effectiveness, and reviewed other ways to deliver services.  The proposed budget reflected many of the fundamental review concepts.

 

Mrs. Crawford acknowledged that the Interim Health Care Committee, the Long Term Care Committee, the Access to Public Health Care Committee, and the Healthy Nevada Fund Task Force had also assisted in forming the budget.  Each of those interim committees had had contact with a variety of recipients of services of DHR, defined the needs, provided input on the needs, and sometimes provided criticism of DHR.

 

Mrs. Crawford addressed the achievements of DHR:

 

• Nevada Operations Multi-Automated Data Systems (NOMADS).  A federal review team had forwarded a letter that indicated certification of NOMADS had been recommended. At the same time the Welfare Division substantially reduced the food stamp eligibility error rate.

 

• Temporary Assistance to Needy Families (TANF) caseload was reduced by approximately 60 percent from an all-time high in 1995.

 

• Efforts made by the Welfare Division in getting TANF participants to work and the participants retaining their jobs earned the agency a high performance financial bonus for the past two years.  

 

• A pilot program was conducted with Washoe County to explore county-based operations of the child welfare system.

 

• The Medicaid waiver was received for physically disabled individuals and expanded services as well as the number of individuals who received services.

 

• Complaints related to long-term-care services had been received from 12,000 senior citizens and were investigated.

 

• Over 52,000 families were served through Family Resource Centers and provided close to 84,000 referrals to other services.

 

• Over 7,800 women were screened for breast and cervical cancer.

 

• The Dini-Townsend Psychiatric Hospital was completed in Sparks.

 

• The Desert-Willow Juvenile Treatment Facility located in Las Vegas received accreditation by the Joint Commission on Accreditation of Health Care Organizations (JCAHO).

 

• Summit View Juvenile Facility was opened.  Oversight was provided by DHR to the privately operated 96-bed facility.

 

• There was a 20 percent increase in mental health services.

 

• A Senior Rx program was developed.  Over 14,000 applications had been received and currently 93 were enrolled.

 

• Monthly, an average of 9,000 families were assisted with child care costs.

 

• Support to individuals with mental retardation and related conditions was expanded over 30 percent.

 

• A total of 577 individuals with Acquired Immunodeficiency Syndrome (AIDS) had received access to treatment.

 

 

Mrs. Crawford moved to the next page in the overview (Exhibit E).  The first page detailed the breakdown of the $11 billion total budget for the next biennium. Human Resources represented 29 percent of the total budget, and 2 percent represented Employment, Training and Rehabilitation, for a total of $3,183 million, an approximate increase of 19 percent over the current biennium.  The next chart broke down the state General Fund expenditure.  Human Resources represented 28 percent of the General Fund budget and totaled $1,081 million.  Page 4 reflected the breakdown of revenues by major source.  For FY2003, 53 percent of the Governor’s proposed budget for the Human Resources function would be federal funds, approximately a 5 percent increase.  State General Fund also reflected an increase of 8.6 percent.  The “Other” category was reduced by approximately 4 percent.  The shift was primarily due to the change in using General Fund for Medicaid; in the past the intergovernmental transfer account funds had been used.  The breakdown in federal funds required DHR to pay careful attention to federal programs.  State matching funds were required for many of the federal programs, and federal requirements often dictated how the funds could be used.

 

Mrs. Crawford referred to page 5 of the handout that detailed revenues and percentages of the constituent divisions.  For the next biennium, Health Care Financing and Policy received 57 percent of the revenue, a $1.8 billion biennium budget.  There was a 9 percent increase in the Health Care Financing and Policy and a 10 percent decrease in the Welfare Division.  The decrease was largely due to the reduction in caseload and the transfer of Welfare-to-Work from the Welfare Division to the Department of Employment, Training and Rehabilitation (DETR). The proportion of the remaining programs remained  relatively stable.

 

Page 6 of the handout reflected DHR personnel distribution across the various divisions as well as the change in distribution from biennium to biennium.  The net increase in personnel was 91 full-time equivalent positions (FTEs) across DHR.  There had been no major expansions in any one area.  The greatest area of reduction was in the Welfare Division and was due to a reduction of child support enforcement staff.  There were additions to the Child and Family Services staff, approximately 12 FTEs who would be information technology staff assigned to work on the Unified Nevada Information Technology for Youth (UNITY) program.  Nine additional positions were added to the Desert Willow Treatment Facility to address growth and five and one-half FTEs to the southern programs for increased financial staff.

 

Mrs. Crawford referred to the next page that contained a comparison of revenue increases to FTE increases from FY1980 through FY2003.  Since FY1980 the budget had increased 12.2 times and there was less than a doubling of staff.  There had been changes in staff configurations, however, current DHR  staff continued to be similar to FY1980 staffing.  DHR changed the way business had been conducted and searched for alternative methods of delivering services at the local level through contracting and privatization.  An effort had been made to accomplish tasks that were not ongoing with non-ongoing staff.

 

Mrs. Crawford stated the next chart demonstrated the distribution of resources relative to the recipient populations and primarily showed service funding.  Approximately 40 percent of the funding went to children and families, 26 percent to individuals with disabilities, 12 percent to senior citizens, 14 percent to adults and 8 percent to the “all others” category. 

 

Mrs. Crawford referred to another document titled Budget Highlights, 02-03, Department of Human Resources, Exhibit F.  She explained the document did not line up with specific budget line items or a specific program; it was a summary document that captured new and expanded areas in DHR.  Many of Governor Guinn’s initiatives and priorities were used in developing the budget.

 

Health care was the first area Mrs. Crawford addressed in the handout.  The agency had proposed elimination of the assets test in the Medicaid Child Health Assurance Program (CHAP) and expedited a seven-day eligibility determination for pregnant women.  It was anticipated approximately 2,247 families previously eligible for Nevada Check Up coverage for their children would become eligible for full family coverage under Medicaid.  Mrs. Crawford indicated that the funding shift would also be covered by the Title XXI match rate for children, so that children would not be moved from Nevada Check Up to Medicaid without also being able to use the 65/35 match rate to pay for Medicaid costs for those children.  The second area provided expanded support for the Nevada Check Up program.  The expansion would increase the number of children who would receive the health care coverage to 24,625 in FY2003.  In FY2001, 15,000 individuals participated in Nevada Check Up.  Mrs. Crawford indicated the dollars listed in the handout reflected the total costs and were combined state and federal funds.

 

Mrs. Crawford stated Governor Guinn proposed $5 million to support health care costs to cover uninsured families.  Funding would be targeted to families of children currently covered by the Nevada Check Up Program, as their income level was just above current Medicaid coverage. Expansion was also recommended in the four Medicaid Home and Community Based Waiver (HCBW) services:  1) an 88 percent expansion was recommended for individuals with physical disabilities; 2) a 16 percent expansion was recommended for individuals with mental retardation and related conditions; 3) the Senior Group Care Waiver was increased by 99 percent; and 4) the senior Community Home Based Initiative Program (CHIP) was expanded by 34 percent. 

 

The next area Mrs. Crawford addressed was the Breast and Cervical Cancer Coverage Program.  Governor Guinn proposed to implement the Medicaid option that would provide, through Medicaid, at the 65/35 Title XXI match rate, coverage to treat breast and cervical cancer for women diagnosed through the federal screening process.  It was projected treatment would be provided for 100 women each year. The Women’s Health Connection, which had provided  screening, was recommended for funding through the biennium.  Support for the Mammovan was also recommended.  Mrs. Crawford continued, $1 million was requested to support the Senior Rx program.  The premiums would be fully paid for lowest income seniors for their pharmacy products.  Community services related to mental health programs would have continued expansion into the communities.  A 13 percent increase was projected for FY2002 and a 6.6 percent increase in FY2003.  Funding in the amount of $75,000 was also recommended to support the Alliance for the Mentally Ill of Nevada, and $2 million was recommended to assist in the establishment of treatment clinics for individuals with HIV/AIDS in Reno and Las Vegas.  The Aids Drug Assistance Program (ADAP) had assisted 577 individuals with AIDS with access treatment in FY2000 and was also recommended for continuation.  Expansion of Medicaid caseload growth was recommended.  It was expected that an increase in average monthly Medicaid participants in the next biennium would be 25 percent above FY2000.

 

Mrs. Crawford continued with the overview.  Funding had been included in the budget to support Medicaid provider rate increases that would assure availability of the essential health care services.  Funding, in the amount of $1 million, was also provided for a rural health loan pool to provide loans on a revolving basis to rural health care providers and safety net providers.  The last major area under health was $1.8 million provided for the long-range strategic health care plan.  The plan included $550,000 to evaluate, study and develop a long-term blueprint for individuals with disabilities.

 

Senator Neal asked if Medicaid dollars and the breast and cervical cancer funding required state match and Mrs. Crawford indicated in the affirmative. The match for Medicaid was projected at 50/50 and the match for breast and cervical cancer was 65/35, which was the Title XXI match rate.  Senator Neal asked about the option the Governor chose in the cancer program. Mrs. Crawford indicated it was an option that was available under Medicaid, and if the Governor had not exercised the option, uninsured women with breast or cervical cancer would not be eligible for Medicaid.

 

The Chair recognized Ms. Leslie who asked about the waivers of individuals with physical disabilities.  Mrs. Crawford had testified earlier there would be capacity to serve 205 individuals, and Ms. Leslie asked how many were actually being served, and questioned if this was the waiver DHR had so much difficulty implementing.  Mrs. Crawford stated the waiver had been expanded this biennium--new positions were added and benefits were expanded.  Funding was originally appropriated to DETR two sessions ago.  Ms. Leslie queried if Mrs. Crawford was confident DHR would be able to serve the clientele.  A waiver had been finalized and was in the expansion process and individuals were being served.  Ms. Leslie indicated she did not want to spend $1.8 million on a long-range strategic health care study that stated the obvious.  She continued, many members had also expressed concern why the study would cost $1.8 million.    Mrs. Crawford stated in addition to the $550,000 for disabled individuals there was a component for seniors that was funded at $500,000.  Rural health concerns and domestic violence would also be included in the study.  The proposal would identify needs of current and future populations, provide a method for fund distribution, and recommend a plan to provide the best services to individuals.   Additionally, a blueprint would be developed that would indicate future needs. Mrs. Crawford indicated ten-year projections were necessary to determine alternative ways of providing services to senior citizens. An environment needed to be provided that allowed seniors to be independent.  Different delivery models and assisted living environments needed review.  Mrs. Crawford stressed a comprehensive evaluation was needed in each of the areas addressed. She felt the recommended budget would meet today’s needs and also paved the way to develop a plan for tomorrow.

 

Mr. Goldwater asked for more information on the provider rate increases.  Mrs. Crawford stated the rates varied and were driven by the major rate increases—hospital and long-term care.  Mr. Goldwater inquired if the rates had been increased in the interim and Mrs. Crawford stated the long-term care and hospital rates were both increased the first year of the biennium.  The rates were frozen for FY2001.  Mrs. Crawford explained the dollar amounts included in the handout included state and federal funds.

 

Ms. Leslie indicated the dollar amounts for the long-range plan still did not add up and more clarification was required.  Mrs. Crawford stated $550,000 was for disabled, $500,000 for seniors, $200,000 for rural health, and $550,000 to conduct a comprehensive rate study of all human services rates.  She explained a variety of different rates had been paid for a variety of different services.  A sound methodology for establishing rates had not been developed.  Ms. Leslie inquired, and Mrs. Crawford confirmed, the dollars would be contracted out for the study due to lack of resources within DHR.  Ms. Leslie asked if the plan met the requirements of the Olmstead Decision.  Mrs. Crawford indicated the plan would meet part of the act and would be Nevada’s Olmstead Plan.

 

Chairman Arberry indicated he had reviewed the handout (Exhibit F) and, due to the short time frame, requested Mrs. Crawford highlight the pertinent items between pages 5 and 16.

 

Mrs. Crawford stated the family foster care rate increase represented an approximate 47 percent increase to foster care families.  She highlighted the subsidized adoption expansion that allowed for the adoption of more children; the continuation of the non-needy caretaker; the expansion of Medicaid for children’s services that represented children who were the responsibility of the Division of Child and Family Services; the child welfare improvements that reflected a lower ratio of worker to child as well as the conversion of the child welfare system to a county-based system; provision for an expansion of children’s mental health services.  Mrs. Crawford then summarized the family programs.  Child care assistance received a 27 percent increase in funding that would support costs and the quality of child care.  A change in the TANF grant rate brought individuals temporarily unable to work due to illness or incapacity up to the same rate as non-needy caretakers.  The Family to Family program budget redefined the target from all families of newborns and infants to families located in at-risk neighborhoods.  Grant funds would support services to 50 percent of the families of newborns in at-risk neighborhoods and would be allocated to southern, northern and rural Nevada.  The governing board of the Family Resource Centers (FRC) would award the funds.  Senator Neal asked why the Family to Family funds were not awarded to the Lifeline Pregnancy Center.  Mrs. Crawford responded Governor Guinn proposed $200,000 to fund the Lifeline Pregnancy Center.  She said the Family to Family program was initiated four years ago and was downsized last biennium and would now be focused on at-risk neighborhoods.

 

Ms. Leslie indicated the Fundamental Review Committee had recommended Family to Family be combined with the Family Resource Centers, however, it appeared that would not occur, but would instead be run through local governing boards.  In response to a question from Ms. Leslie, Mrs. Crawford indicated the resource centers would not be the only entities eligible to receive the funds. She explained the method of awarding funds enabled locals to design programs and choose services. Ms. Leslie asked if funding for administrative costs would be provided to the FRC governing boards.  Mrs. Crawford responded administrative costs would be provided to the FRC, but those funds would be in addition to the dollar amounts listed in the handout (Exhibit F) for Family to Family.   Since funding had been cut so dramatically, Ms. Leslie questioned if the program was worth continuing.

 

The Chair recognized Mr. Beers who asked if a Family to Family program that was not located in an at-risk neighborhood would be closed. Mrs. Crawford responded Family to Family was distributed through 13 support districts and the programs competed for available funds.  The distribution of funds would be different because funds would be awarded relative to the distribution of at-risk births, therefore programs that were currently in areas where there were not at-risk births would not be in an area to provide services.

 

Mr. Hettrick stated he served on the Fundamental Review Committee and they had reviewed the Family to Family program.  When the program was first implemented, testimony indicated if $200,000 had been allocated to Clark County and $100,000 to Washoe County, the same services could have been provided to 98 percent of the births in Nevada.  The final award was $13 million.  Mr. Hettrick then recalled a Ways and Means Committee hearing where a discussion ensued about five computers that had been sent to Winnemucca for their Family to Family program and they had only 35 clients, seven clients per computer.  There was concern whether or not services needed to be provided to at-risk people in true need situations or initiate a complete new social services organization.  Mr. Hettrick emphasized the program had, in fact, been cut back, but available funding would be directed to people in at-risk neighborhoods.

 

Chairman Arberry asked Mrs. Crawford to begin the review of the DHR budget due to the limited time.  Mrs. Crawford agreed and encouraged members to review the handout (Exhibit F). 

 

Mrs. Crawford referred to the organizational structure on the second page of the Director’s Budget (Exhibit E).  Two new organizational areas were the Grants Management Unit and the Office of Disability Resource Development and Planning.  The Grants Management Unit would provide consistency in grants management throughout DHR and was recommended by the Fundamental Review Committee. The unit would provide administration and management of the multiple grants awarded through DHR to local entities.  Some of the major funding that would be included was distribution of Title XX, Community Services Block Grant, Family to Family, Family Resource Centers, and various domestic violence funding streams.   The unit would also have responsibility for the development and maintenance of a comprehensive grants management tracking system and a comprehensive evaluation and reporting mechanism of the performance of the funds passed through to the communities.

 

Mrs. Crawford referred to the second area under Community Connections, the Office of Disability Resource Development and Planning and indicated it also was a suggestion that came out of the fundamental review process.  The unit integrated three programs that served individuals with disabilities: 1) the Office of Community Based Services located in DETR, 2), the Developmental Disabilities Program located in DETR, and 3) the IDEA, Part C Program located in DHR.  IDEA served individuals ages zero through three with identified developmental delays.  Current functions and current organizational structure had been maintained, but would be combined within the director’s office in DHR.  An additional task had been added to focus on the development of a comprehensive long-term plan for individuals with disabilities.  The $550,000 funding in the strategic plan would be used as part of the overall planning process.  Also there was the Ticket to Work and Work Incentive Improvement Act of 1999 (TWWIIA) grant of $600,000 in the first year for development of a health care policy and work policies and programs that would enable individuals with disabilities to work and have continued health care coverage. Mrs. Crawford apprised members the proposed organizational structure had not been intended as the final structure, but was created as an interim structure to develop a long-range plan and determine the best methods for providing services to the disabled.  

 

Senator Raggio stated he and some of his constituents had received input that best interests might not be served if developmental disabilities was moved from DETR to DHR. He understood the plan, as proposed, was an interim plan, however, he was concerned federal regulations might be violated. Senator Raggio thought there needed to be a public hearing to receive input from the public.  He asked Mrs. Crawford to enlighten the members if the concerns had been addressed.  Mrs. Crawford deferred to Myla Florence, Director, Department of Employment, Training and Rehabilitation.

 

Ms. Florence stated the concerns had been brought to their attention; however, the concerns were raised very late in discussions and she did not believe there was a problem.  Ms. Florence explained the designated state agency was the office of community-based services within DHR, the units and functions remained intact, and the Developmental Disabilities Council remained in the office of community-based services.  The only change had been that the program moved from DETR to DHR.  The public comment would be by virtue of the legislative process.  The designation by the Governor would be made as a result of the outcome of the legislative process.  The issue had been jointly proposed because the services aligned, and the Fundamental Review Committee heard testimony on the proposal, with other programs within DHR.  DETR had been employment-focused while the office of community based services and developmental disabilities had been more into policy, advocacy, and service strategies, not necessarily related to employment.  Ms. Florence thought the Governor had given the agencies and the disability community a wonderful opportunity.  She indicated the state had never before had available the resources for services and planning.   Ms. Florence stated that currently there appeared to be opposition to the process and support of a plan that also had not involved the state agencies impacted or the other constituent groups being proposed, i.e., mental health, the developmental disabilities community, and senior citizens.  Neither the legislature nor the Governor should be placed in the position of having independent plans created without a great deal of input and without careful deliberation for a service configuration that made sense and had been based on good research.  Ms. Florence expressed hope that one constituent group pitted against another constituent group would not destroy the current opportunity.

 

Senator Raggio asked Ms. Florence to confirm the proposal would not violate any federal requirements.  Ms. Florence concluded, based on her interpretation of law and regulations, it did not. The question had also been posed to the department’s deputy attorney general who would also provide a response.

 

Mrs. Crawford interjected that the council originally had been located in DHR and subsequently had been transferred to DETR.

 

The Chair recognized Mr. Goldwater who stated DHR had indicated at the beginning of the presentation that the agency was doing well.    Mr. Goldwater explained this was his fourth term and he knew somewhere along the line the department had conducted planning for the future.  Mr. Goldwater questioned the need for even more planning during the upcoming biennium.  Mrs. Crawford responded it was always easy to say we should not plan, but we live with the result of not planning.  A strategic plan for long-term care services for seniors did not exist, and we do not have a vision of how the system should look in ten years.  What type of living arrangements do we want for seniors, how do we want to array those services, what do we want our seniors to have and how do we want them to live?  Mr. Goldwater stated Mrs. Crawford hit on his exact point.  In the past, during the budget process a ten-year plan had not been presented and that was why the legislature met every other year to approve a two-year budget.  Are we saying we will sacrifice a dollar that could finance programs to do a ten-year plan that may or may not be followed?    Why should we have to take resources away from other areas for planning?  Mr. Goldwater remarked that Mrs. Crawford had been with DHR for a long time and asked if she had lacked ten years of vision.  Mrs. Crawford responded that in many ways there had not been long-range planning, and the recommended funding was supported by one-shot funds.  Currently rural communities were at risk regarding health care.  Steps had been taken, but there was not a ten-year strategic plan that assured health care services in Nevada would be sustained.    Mrs. Crawford continued, DHR had planned biennium by biennium and changed based on the revenue situation, but Nevada had grown too large to continue with no strategic plan.  Nevada needed to determine how resources would be allocated in the coming decade, not in the coming year.  Mrs. Crawford wondered if there had been a vision for our seniors, and if senior needs were understood. The recommended funding would allow DHR to have a clear vision of where they were going in the next ten years.

 

Ms. Leslie stated she would have many questions on the grants management unit that would be raised in subcommittee meetings.  Because the new office was quite different from what had been presented to the Fundamental Review Committee, Ms. Leslie asked if the community had been involved in the process, and, if the community had not been involved, was there an intent for involvement in the future.  Mrs. Crawford stated she and Ms. Florence had met with the Office of Community Based and Developmental Disabilities and the IDEA staff and had requested their feedback on the plan and also had requested a list of individuals and groups within the disability community to be included in meetings.  Mrs. Crawford advised no response had been received, however, meetings with the community were still planned.    Part of the strategic planning had been to fund that type of input from consumers and develop strategic planning based on input.

 

Senator Raggio indicated other items needed to be addressed before the Welfare Division testified and asked about the increased budget and the new positions.  Mrs. Crawford deferred to Ms. King, Administrative Services Officer IV, DHR.   Senator Raggio understood no MAXIMUS funding was included in the budget and Ms. King verified all MAXIMUS funding had been removed from the base budget.  If MAXIMUS identified additional funding opportunities, a work program would be brought forward.  Senator Raggio indicated there was reversion authority in the budget for Maximus in FY2001, approximately $2.3 million.  Ms. King stated there was work program authority of $2.3 million and currently $131,000 had been collected so there was not much chance of the $2.3 million being reverted.

 

Senator Raggio moved on to the enhancements, E-276 through E-280.  Ms. King explained that E-276 added three management analyst positions to the director’s office that would allow the director to be more effective in tracking and providing management oversight to the divisions.  One of the analysts would focus primarily on performance measures and caseloads; one would coordinate department-wide audits and follow-up on the audits; and one would assist in the budgetary review and oversight at the department level.  E-277 recommended an agency loss control coordinator for worker’s compensation. The position had been recommended by the Department of Administration, Risk Management Division, and was strongly supported by the department’s personnel committee.  E-278 recommended a personnel analyst who would assist in “difficult to recruit” and the rural position issues.  The funding included advertising and travel.  Ms. King indicated that it was difficult to recruit in Nevada and California, however, Nevada’s salary structure for social work positions was very competitive in other states.  E-279 funded a management analyst position and associated costs.  The position would be a professional position and would act as assistant to the director of DHR, the largest department in Nevada and the only one without an assistant to the director position.  DHR currently had a position that would, after the salary structure change, be classified as an executive assistant, however, the position was a clerical-type position.  E-280 recommended an employee development manager and a training officer to staff a training unit within the director’s office, which would be coordinated with all the departments and would not be a duplication of the training offered by personnel or the divisions. 

 

Mrs. Crawford testified E-806 recommended an upgrade of the current classified Administrative Officer IV position to an unclassified Deputy Director position.  The change recognized the oversight responsibility of the lead fiscal position within DHR. 

 

Ms. King referred to the next budget, the Healthy Nevada Fund.  Two existing positions, a management analyst and an auditor, would be transferred to the new grants unit.  Senator Raggio asked, and Ms. King responded, this budget would be funded with the tobacco settlement money.  Senator Raggio also asked if the new positions requested for the director’s office would be funded with any federal funds and Ms. King indicated they were not.  Ms. King stated the Healthy Nevada Fund had the Senior Rx program and the two pools of funds that were allocated by the Task Force for the Fund for a Healthy Nevada.  Those were grants that would improve the health of children and the disabled and reduce, eliminate, and treat the use of tobacco.  Senator Raggio asked what was proposed on the $1 million appropriation for the marketing efforts and subsidy enhancements for the senior prescription program.  Mrs. Crawford responded the $1 million provided a supplement to the subsidy and provided the lowest income seniors, those with incomes below $12,700, additional funding to cover the entire premium for the pharmacy insurance.  Senator Raggio stated the $1 million for the seniors was only included in FY2002 and asked if the funds would be carried through the biennium.  Ms. King responded, based upon projections, the $1 million would carry through FY2003.

 

Ms. King indicated Budget Account 3237, Purchase of Social Services, would be eliminated.  The programs and 1.5 FTE position would be transferred into the grants management unit.  No enhancements were recommended.  Senator Raggio asked if the $1.9 million included in E-350 was a transfer of TANF funds.  Ms. King indicated yes and it was permissible.  Title XX had been decreasing and the budget recommended a 5 percent reduction in Title XX funding.  TANF regulations allowed the transfer of TANF money into Title XX and the funds could be used as though they were Title XX.  In lieu of requesting enhanced General Fund to reflect the reduced Title XX funding, TANF funds were transferred so the federal funding at the division level remained constant.

 

The next budget referred to was the Community Services Block Grant with 1.51 FTE.  It was recommended the budget and positions be combined in the grants management unit.

 

Ms. King referred to the Family to Family Connection Program,  Budget Account 3278.  The budget had seven FTE; four were child care development block grant specialists proposed to be moved to Welfare along with the program responsibility.  The three remaining positions were eliminated and the grants management unit would assume the function.  As indicated earlier, funding had been refocused to at-risk only and pass-through funding was approximately $627,000 per year.

 

Funding for the Family Resource Centers, Budget Account 3294, remained constant.  The current FRC positions would be included in the grants management unit.  Senator Raggio asked where the Family Coordination Program would be located and Mrs. Crawford responded the program would be located in the Governor’s Office.  Senator Raggio then asked what the connection was between the Family Coordination Program and the Family Resource Centers.  Mrs. Crawford indicated the FRCs were not directly related to the Family Coordination Program.  She explained the family coordination positions had been created in the Governor’s Office to provide a higher profile and would facilitate coordination to families in accessing services across DHR.  The FRCs were not proposed to change and would continue under the existing structure.  Senator Raggio expressed interest in learning more about the two areas.

 

Ms. King indicated the grants management unit was a new budget with a total of 16 positions.  Those positions were associated with ongoing programs such as Family Resource Centers, Family to Family, Title XX, CSBG, and were projected to begin on July 1, 2001.  The positions in the grant tracking unit would begin in October of 2001.  She noted one of the advantages of the grants management unit was that previously the grants proposed to be in the new unit had administrative costs ranging from 1 percent to 15 percent.  Under the grants management unit the administrative costs would be less than 5 percent across each grant.  Senator Raggio asked if the expectation was that the proposed new structure would be cost effective.  Ms. King responded it was anticipated grant funding pass-through would be increased to the direct service providers and administrative costs would be cut.  Fifteen positions had been cut from other budgets and 16 were added, a net gain of one.  Of the 16 added, 3 had been included in the grants management unit, and would be funded by the state General Fund.  By refocusing the grants management position into a position that would have both fiscal and accounting responsibility, there would no longer be a need for two positions.  The grants management unit positions would have responsibility for grants management, and would manage both fiscal and programmatic responsibilities. By providing cross-training and additional training in grants management,  DHR would operate more effectively.

 

Ms. Giunchigliani asked Ms. King to explain further.  The narrative stated 10 positions would be cut, not 15.  Ms. King apologized; the 15 positions also included the 4 child care block grant specialists that would be transferred from the Family to Family budget to the Welfare budget.  Ms. King indicated a detailed schedule of recommended staff changes was available and would be provided to members.  Ms. Giunchigliani also asked the agency to provide a reorganization chart that detailed position additions, movements, and expansions for the past 10 or 12 years.  Senator Raggio inquired if the proposed organizational changes would decrease costs.  Ms. King testified in the affirmative.  She indicated efficiency would be increased and costs would be decreased.

 

Ms. King referred to Budget Account 3276, State and Community Collaboration Account (IDEA).  It was proposed that direct service providers in the account would be transferred to the appropriate budget.  Remaining staff would remain within the current budget but would be incorporated into the Office of Disability Resource Planning and Development. 

 

The budget recommended the Office of Community Based Services be transferred intact from DETR to DHR.   Some modifications had been included in the enhancements.  Previously the budget had been funded through a cost allocation in DETR.  Because DHR did not have an overhead cost allocation,  one accounting clerk position and one administrative assistant had been requested.  The positions would provide accounting, fiscal, and personnel oversight. 

 

Ms. King reiterated The Executive Budget recommended the Office of Developmental Disabilities be moved to DHR from DETR.

 

Ms. King indicated both the Public Defenders Office and the Indian Affairs Commission were status quo budgets.

 

Mr. Marvel asked if DHR would have oversight of the Indian Commission or would it continue to stand alone.  Mrs. Crawford testified the commission had sought a legal opinion that would determine if the agency was placed appropriately.  The Governor was aware of the commission’s request, but had not indicated how he wished to proceed.

 

Mr. Marvel asked if the commission had requested enhancements.  Ms. King indicated the Governor’s budget instructions were provided to the Indian Commissioner and the budget recommendations developed by the commission provided some information, however, did not comply with the Governor’s request to submit budgets with no additional state General Fund dollars over FY2001 levels.

 

Ms. Leslie advised a bill draft had been created that would have eliminated the Indian Commission and questioned if the BDR had been withdrawn.  Ms. King indicated she did not recall seeing the BDR.

 

Mrs. Cegavske had a brief question on the mental health facilities and their capacities.  Senator Raggio indicated the Welfare budget needed to be heard due to limited time.  This hearing was intended as an overview of the budgets, and more detail would be provided in subcommittee hearings.

 

 

 

 

WELFARE DIVISION BUDGET OVERVIEW

 

Chairman Arberry moved into the Welfare Division’s overview, Exhibit E.

 

Mike Willden, Administrator of the Welfare Division, began with an introduction of his administrators. Due to limited time, Chairman Arberry requested that Mr. Willden address the pertinent areas in the Welfare budget.

 

Mr. Willden referred to the third tab in the handout (Exhibit E) and asked members to refer to the first chart.  Welfare’s budget was approximately $410 million of the DHR biennial budget.  He noted that two important fiduciary responsibilities within the division were not reflected in The Executive Budget.  In addition to the $410 million, almost $60 million per year in food stamp coupons had been distributed.  The program was run through the federal government, but the Welfare Division had fiduciary responsibility.  The Welfare Division also had responsibility for child support and collection disbursement activities within the state -- approximately $100 million each year.  In total, Welfare’s responsibility would be almost $730 million in the next biennium.  Mr. Willden indicated he would quickly review the 13 pages of narrative and 15 pages of overviews.

 

Mr. Willden articulated Welfare’s mission was to provide quality, timely, and temporary services that enabled Nevada families, the disabled, and the elderly to achieve highest levels of self-sufficiency. The Welfare Division was organized into three operational areas: the administrator and deputy administrator for program and field operations; a deputy administrator for fiscal; and a deputy administrator for automated systems.  Welfare had over 1,000 positions in the division last biennium and had been downsized to 986 into the next biennium.  The downsizing was primarily related to the reorganization of the Child Support Enforcement Program, the transfer of the Welfare to Work Program to DETR, internal reorganization and elimination of additional positions.  Mr. Willden referred to the Welfare tab in Exhibit E, and asked members to refer to charts 1 and 2, located behind page 13.  Chart 1 listed staff by functional area, and an analysis by budget account was included.  Chart 2 provided position changes and a budget account summary.  Welfare to Work was downsized from 6 positions to 2 positions going into the new biennium.  Welfare Administration increased from 116 to 119—two positions for a new project on electronic benefit transfer and one transfer in from another budget account.  In the largest budget, field services, staff located in the field services offices, who provided direct client services, had been increased from 686 last biennium to 761 positions in FY2003.  The increase was primarily due to 52 positions transferred from the Employment and Training budget into field services; job duties in field services were more directly related to the TANF program.  The Employment and Training budget would include only the child care budget.  Additionally, the positions included 20 new eligibility worker positions related to initiatives to eliminate the child health assurance program assets test and expedited eligibility for pregnant women.  The Child Support Enforcement Program was downsized in FY2001 from 138 positions to 91; 47 of the positions were eliminated due to reorganization in the Clark County Family Support Division and because of a funding crunch in the program.  Eleven positions would have responsibility for child care programs.  Finally, the Interim Finance Committee approved the elimination of one position in the Low Income Energy Assistance Program and the funds had been used for contract dollars.

 

Mr. Willden detailed the programs administered by Welfare: 1) TANF, 2) the Child Support Program, 3) three employment and training programs; New Employees of Nevada (NEON) related to TANF clients, Food Stamps Employment and Training program, and Welfare to Work, 4) social services were provided through licensed social workers, 5) Child Care Development Fund, 6) all eligibility determinations for the Medicaid program -- approximately 116,000 medical cards were issued per month, 7) the Food Stamp program, 8) the Low Income Home Energy Assistance program, and 9) the Homeless Grant recommended in the budget to be transferred to the Housing Division. 

 

Mr. Willden reiterated the Governor’s Office had directed agencies to look at each budget and look for some efficiency and reorganization needs.  The Welfare Division identified three primary areas.  First, the Welfare to Work budget was recommended for transfer to DETR; the Homeless budget was recommended for transfer to the Housing Division; and the Individual Family Grants budget was recommended for transfer to the Emergency Management Division.  The transfers had been negotiated with the administrators of those divisions and agreements had been signed in each area.  Mr. Willden stated the Fundamental Review Committee had taken a hard look at the field services budget and would be making significant recommendations.   Welfare’s Exhibit E, chart 3, contained performance indicators for the division.  Mr. Willden pointed out The Executive Budget could only hold limited performance indicator information and indicated the division tracked several hundred indicators.

 

Mr. Willden explained charts 4 through 10 related to caseload history.  Chart 4 included caseload growth rates.  Highlighted areas reflected declined caseloads.  TANF grants had declined, down 60 percent since they peaked in March of 1995, and a flat caseload trend had been projected.  The largest growth area had been the TANF medical-only population, typically TANF families who had received medical-only assistance.  Explosive growth occurred and would continue in this area.  Mr. Willden felt the growth in the program was good because it resulted from families leaving the welfare rolls, going to work, and getting  transitional medical services.  The Child Heath Assurance program and the Food Stamp programs had declined.  There had been a great deal of concern about the status of the TANF program and chart 5 depicted program trends to the end of the biennium.  The chart detailed legislatively approved and actual amounts.  Chart 6 detailed Medicaid eligibles and total Medicaid caseload growth—a 14 percent increase had been projected in the biennium for total Medicaid eligibles.  Mr. Willden referred to the next chart, food stamp caseload history and projections.  Then Mr. Willden referred the committee to chart 8, and explained part of the success of putting people to work had been the ability to work with families and to develop a plan for them to move from dependency to self-sufficiency.  The chart showed the past record of the number of people who needed to be served and Welfare’s ability to serve them.  In 1999 services had been provided to only 75 percent, and, due to additional funding provided by the 1999 legislature, services had been provided to 92 percent.  The child care history was detailed on exhibit 9.  The number of children who received child care each month increased from 6,300 each month in FY1999 to the current number of over 9,600 per month in FY2001.  The Governor’s budget included additional funding and projected 11,500 children per month.  The final exhibit outlined child support collections that had increased to over $105 million annualized in child support collections, over $9 million per month.   Between 2,200 and 2,500 child support collections had been received daily, the checks were turned around and mailed out to recipients the following day.  Checks had not been held until the end of the week or the end of the month.

 

The Chair recognized Mrs. Chowning who indicated she had made a statement in an earlier hearing that child support collections were up and had been told the system was working.  After that hearing many workers had called and stated the system was not working, and because of the system and the inadequacies therein, people had not been receiving child support payments and that collections were not up.  Mrs. Chowning asked if things were better now.  Mr. Willden responded child support collections fluctuated from month to month, but overall last year collections were up about 5 percent.  Timeliness of clients receiving the funds was the important issue.  The state child support collection and disbursement unit in Welfare received the checks, and, as required, processed the checks within 48 hours.  Mr. Willden tracked the process every day and determined that 98 percent of the checks were mailed out within two days.  There had been a number of complaints many checks had been held up.  A policy existed to hold checks received from the Internal Revenue Service for six months because the “other spouse” would have the right to file an appeal or grievance.  Many checks received by the agency could not be identified, i.e., no case number, conflicting names, etc.  Additionally, checks had been received with no existing court order.  Before a check could be released, the case had to be placed into the system.  However, Mr. Willden reiterated the majority of checks had been processed in a rapid fashion.  Mr. Willden stated he would be happy to provide the month-to-month details on check status.

 

Mr. Hettrick stated his grandson received child support checks and indicated that three or four months ago there had been some delays.  However, over the past two or three months the checks arrived like clockwork, and it appeared to be working pretty well.  Mr. Willden confirmed problems were encountered in the initial months of August and September, but since then things had become smoother.

 

Mr. Willden stated Welfare had received a letter of certification from the federal government on January 18, 2001, for NOMADS, and Nevada was out of the penalty box.  A commitment had been made to refund  $3.6 million in penalties to the state prior to April 14, 2001.  Mr. Willden did not claim the NOMADS system was complete, but affirmed the certification plateau had been met.  State-related issues would now be addressed.

 

The State Collection Disbursement Unit was certified in October of 2000 and Mr. Willden indicated that process was working fairly smoothly.  Two TANF performance bonuses were received; $2.2 million the first year and another $2.2 million the second year of the biennium.  Mr. Willden indicated the receipt of the bonuses was directly reflective of the staff’s hard work and the clients’ initiative to move from welfare to jobs.  Nevada placed in the top ten in the nation, we were number five in the nation two years in a row, the job placement rate was approximately 60 percent.  Additionally, Nevada had over a 77 percent job retention rate measured from the hire date to six months later.   Nevada’s wage gain rate, the salary range over a six-month period, was 30 percent. The error rate in the Food Stamps Program had lowered from 12 percent to 5 percent.  Training funds had been provided by the last legislature to open a second professional training center in Reno.  The center was opened in January 2000 and it was completely operational. Additional training funds were included in the budget.

 

Electronic Benefit Transfer (EBT) was the next federal mandate.  A shift must be made from paper coupons in food stamps to electronic benefit-provided food stamp benefits by October 2002.  A contract had been signed with Citibank, the pilot would begin in October 2001 and the federal deadline would be met.  EBT would be the biggest thing to happen to the Food Stamp Program since it was implemented in the 1970s and would provide tremendous benefit to food retailers, to clients, and to the federal government.  The funding required for the implementation of EBT was included in an enhancement module.  There would be a shift from an inexpensive 70 cents per transaction to over $4.00 per transaction.

 

Mr. Willden continued that the TANF program caseload had been lowered, the job retention bonus program was implemented as approved by the last legislative session, and the employment and training programs were strong as evidenced by the 60 percent caseload decline.  The Governor’s budget included over $1 million per year in additional self-sufficiency funding.  There was also a module that would increase the TANF grants to a group of the TANF population not able to participate in the employment and training program because of temporary illness, being incapacitated or needing to care for someone who was ill or incapacitated.  There was some confusion in the press the last few days that there had been an increase proposed for all TANF families; it was not an increase for all, it was an increase for TANF families who could not participate in Welfare’s work programs.  The proposed increase was basically the same increase brought to the 1999 session for the non-needy caretaker cases.  The grants would increase $94 next January and an additional $93 the following January.   Also included in the budget was an initiative to begin work on two TANF related goals; i.e., the encouragement of the formation of two-parent families and reduction of out-of-wedlock births through requests for proposals to faith-based organizations and other non-profit organizations. 

 

Mr. Willden relayed child support program funding had been critical due to declining caseloads and national legislation that shifted more money collected to the families and the state was keeping less—a good thing for the families, however, funding for the level of staff was not available.  The child support program included no General Fund and none had been requested for the next biennium.  A proposal was included in the budget to add fees.  Staff worked with the district attorneys in the development of a fee collection process.

 

Mr. Willden addressed the Medicaid budget that eliminated the CHAP assets test and implemented the expedited eligibility processing for pregnant women.  Five existing staff would be reorganized and placed into teams to make the initiative work. One-shot funds had been included for the development and implementation of an on-line Web-based eligibility application system.  No waiting lists existed with the two contractors for child care -- the Economic Opportunity Board in the south and the Children’s Cabinet in the north.  The Governor’s budget included $6 million each year that addressed ongoing and additional child care needs.

 

Chairman Arberry recognized Senator O’Donnell who questioned the cost of the Internet program, which allowed someone to apply for food stamps and state aid.  Mr. Willden responded a one-shot appropriation in the amount of $500,000 was included in the budget to be used to gain match from other programs.  He indicated the total project was approximately $1.4 million.  He indicated there was a company that had installed the program in Orange County and the intent was to have that company install their product in Nevada.   Senator O’Donnell questioned the demographics of an individual who needed food stamps but could afford a $1,500 computer and a $45 per month fee for Internet service.  Mr. Willden responded that the first targets were not clients, since many did not have computers.  The initiative would be directed to providers who made applications on clients’ behalf, for example, hospitals, health centers, and several outreach and community groups.

 

Mr. Willden indicated he had touched on the majority of the proposed budgets, however a few more areas needed to be addressed.  He referred to page 9 of the Welfare narrative (Exhibit E) and wanted the members to know that DHR had looked internally to determine staffing needs for the Electronic Benefits Transfer (EBT) and believed ten new positions would be required (systems people, field services, customer representatives).  Eleven investigations and recovery positions had been eliminated to allow for the ten needed positions.  Mr. Willden felt there was justification for the elimination of the positions since the TANF and Food Stamp Program caseloads had declined.  He referred members to chart 11 that depicted the EBT timelines from the initiation of the contract with Citicorp to completion by 2002.  Citicorp had provided the same service in 38 other states so problems were not anticipated.  Chart 12 compared the continued paper coupon food stamp benefit issuance cost with EBT issuance cost.

 

Mr. Willden then referred to page 9 of the narrative and highlighted a few data initiatives.  A significant disaggregated data reporting requirement of the federal government existed.  Some 124 data elements had to be forwarded on every individual served.  Collecting all of the elements from all of the systems operated had been a massive undertaking, therefore, Welfare looked at a data warehouse to manage the reporting.  There was also an initiative being worked on with the counties and other non-profits to share some client demographics between those entities.

 

Mr. Willden referred to page 10 and discussed an area of TANF that had not previously been addressed.  In order to meet some of the critical clerical needs within the department without requesting new positions, TANF funds would be used to provide subsidized employment to 36 TANF recipients each year.  Recipients would receive clerical training and would be placed in DHR agencies to provide clerical assistance.  Mr. Willden indicated a new category had been established in the  budget to support TANF-related programs that would provide and fund a number of services in other sister agencies including Mental Health Division, Health Division, and Division of Child and Family Services.  An allocation of $3.8 million had been included in the budget for the new category.

 

Chairman Arberry asked if all divisions within DHR had fully utilized the TANF funds.  Mr. Willden responded he hoped so, but was not familiar with all of the programs in DHR.  He indicated his staff had met exhaustively with Mental Health and had identified several programs that could earn and use TANF dollars.  Chairman Arberry asked about Child and Family Services and Mr. Willden indicated he had met with them.  He referenced a Kinship Care Program that had earned approximately $4 million in the current year and might be able to use additional TANF funds. Mr. Willden commented staff had met regularly to discuss ways to earn TANF dollars.

 

Mr. Willden referred to the Aged and Blind budget and noted the budget had been funded entirely from the General Fund.  The General Fund did not supplement the disabled and there had been no recommendation to supplement the disabled in the next biennium.  Also, supplements to the adult group care facility operators had not been included in the budget.

 

Mr. Willden indicated the Field Services budget included a great deal of reorganization.  Other than the EBT project, which had already been discussed, a number of staff had been moved out of the employment training budgets making it a child care only budget.  Employment training staff had been moved into field services staff and would be co-located with eligibility workers and social workers.

 

Mr. Willden stated the Child Support/Federal Pass Through Account, Budget Account 3239, had been reorganized.  In the past, some of the child support collections had been brought into the account, however, last August a new agency fund was created.  Only expenditures passed through to local district attorneys and to the Attorney General’s Office for support of the program, had been included in the budget.  He reiterated the Employment and Training budget had been reorganized and would be the Child Care Assistance Fund and all funds in that budget account would be child care related. 

 

Mr. Willden concluded his overview and indicated he was open for questions.

 

Chairman Arberry asked Mr. Willden to discuss the Super System.  Mr. Willden directed members to pages 8 and 9 of the overview (Exhibit D).  The automated systems budget for the next biennium contained $225,000 per year for a project originally named the “Super System” and had been renamed OASIS.  The system would be funded completely with TANF funds.  The project supported employment and training activities not included in NOMADS.  OASIS began in the summer of 2000 and had been suspended recently because of staffing and design concerns.  The project would probably be restarted in the summer of 2001 in a scaled-back fashion.  The committee needed to decide in future hearings if the $225,000 of TANF funds in each of the next two years would be adequate.  Chairman Arberry asked if Mr. Willden needed appropriations of state funds for the project, and he responded in the negative.  The decision had been made to not spend Welfare to Work dollars on the system but would spend TANF automated system dollars.  The Welfare to Work dollars had been redirected in the current year to client services that would earn federal dollars to carry forward into the next biennium.

 

Chairman Arberry questioned how the Welfare Division planned to utilize additional federal funds received from the high performance bonus.  Mr. Willden stated the 1999 award received last year in the amount of $2.2 million had been approved by IFC to purchase 550 personal computers and servers to maximize the automated systems capabilities.  Notice of the second year bonus had been received recently and the full plans had not yet been developed.  Since the high performance bonus might not be earned each year, the Governor directed the funds not be placed into ongoing programs. Staff had been compiling a list of funding options and hoped it would be delivered to the Governor’s Office for a decision within two weeks.

 

Chairman Arberry asked what had been proposed to collect the cost recovery fees in the Child Enforcement Program.  Mr. Willden indicated there had been two or three meetings with the district attorneys’ association and there were a number of fees that could be collected.  Agreement had been reached on three fees that would be collected.  The one that generated the most revenue was the wage assignment fee.  State law allowed a two or three dollar fee that an employer could charge when directed by the Child Support Program to do a wage assignment on someone’s wages and forward it to the program.  It had been proposed to increase the fee to five dollars; the employer would still keep the two or three dollars collected and forward the other two or three dollars to the state to assist in funding the Child Support Program.  The other fees agreed upon were: 1) the arrearage delinquency fees collected through IRS refunds and financial institution data matching, and 2) the child support lien registry where insurance settlements were identified and attached.  A 5 percent fee would be charged and 95 percent would pass through.  Chairman Arberry asked if the Department of Motor Vehicles (DMV) was cross referenced and Mr. Willden indicated it had been, however, there was no fee collection process on DMV.

 

Chairman Arberry queried if there had been a waiting list for the additional federal child care assistance funds and Mr. Willden indicated there was not. Child care was guaranteed to anyone participating in TANF, to individuals in the twelve-month transition period.  In the past, people in the at-risk population had to wait a period of time before receiving assistance.  Chairman Arberry asked if additional federal child care was available and Mr. Willden indicated new child care funds had been awarded to the states in December 2000.  A portion of the new funds was reflected in the recommended budget, and a work program would be presented at the next IFC meeting that would increase funding authority.  There had been a significant increase in the discretionary allocation, approximately $4 million more than the anticipated $6 million.

 

Ms. Leslie asked Mr. Willden to provide, in writing, exactly who would receive the increase in TANF funding.  Mr. Willden indicated he would be happy to provide the information.

 

Chairman Arberry asked if federal rules required the state Maintenance of Effort (MOE) of TANF to be reduced from the current 80 percent level.  The TANF rules for MOE allowed for a reduction, but Mr. Willden indicated a reduction should not be considered.  The Executive Budget had been built on the 80 percent TANF MOE, approximately $27.1 million that Nevada would need to spend out of state dollars in order to receive the $48 million in TANF federal dollars.  If  work participation rates had been met each year, then MOE could be lowered from the 80 percent level down to a 75 percent level.  However, Mr. Willden felt it would be dangerous to make the reduction.  The work participation rate last year had been met, but three years ago it was not met. If the MOE had not been met and the work participation rate had not been met, the spending level would be moved back to the $27.1 million, which had not been budgeted.  The agency would then have to ask IFC for a supplemental appropriation.

 

Mr. Willden thanked the committee for their support, particularly with the NOMADS effort.

 

Chairman Arberry adjourned the meeting at 4:30 p.m.

 

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Linda Smith

Committee Secretary

 

 

APPROVED BY:

 

 

 

                       

Assemblyman Morse Arberry Jr., Chairman

 

 

DATE: