Lawmakers finalize budgets, but expect restoring many of their cuts

After months of review, legislative money committees closed their final budgets on Friday with many of the austerity measures in the governor’s budget, but are teeing up for a more pleasant round of add-backs to distribute hundreds of millions of dollars from revenue streams expected to over-perform earlier projections.

Senate Finance Committee Chairman Chris Brooks (D-Las Vegas) said the outcome of a Saturday budget hearing would depend on what numbers staff arrive at after adding up all the actions taken by the Legislature. But even as lawmakers have voted to approve painful cuts, they have hinted that they’re putting sticky notes on certain accounts with the intention of filling them back up. 

“It's a moving target, until the very end,” Brooks said. “But to the extent there's money available, we're going to try to add it back to everything that's been cut.”

He said K-12 education — specifically boosting a base per-pupil figure “as high as we possibly can” — is a priority. That number will be a key starting point as the state moves to a new “Pupil-Centered Funding Plan,” and future adjustments and weights will be calculated as multipliers of that figure.

Earlier in the week, lawmakers swept funding from a long list of targeted, “categorical” accounts into a larger pot of funding to be redistributed through the new funding. But some of those underlying accounts, such as one supporting class size reduction, were cut by tens of millions of dollars before being swept, and lawmakers and advocates gave dire warnings about the consequences of letting that decision stand.

“The proposed $156 million cut the class size reduction over the next biennium would mean a loss of about 1,000 teachers across the state, meaning even more students packed into Nevada classrooms,” said Chris Daly of the Nevada State Education Association teacher’s union. “This is not acceptable.”

Lawmakers already voted this week to undo one of the most loathed cuts during the pandemic — cuts in reimbursement rates for Medicaid providers — but budget committees made less-dramatic moves in recent days to shore up the budget in accordance with constitutional deadlines. Below are some highlights from budget closings on Thursday and Friday.

Medicaid and health care

Full budget committees on Friday approved moving forward with recommendations made earlier this week to roll back Medicaid rate decreases approved by lawmakers during a budget-slashing 2020 special session and a host of other add-backs to state health care spending.

Committee members approved recommendations of rolling back a 6 percent Medicaid rate decrease approved last year, as well as to finally enact a 2.5 percent increase in the acute care hospital rate starting in July. The move restores about $300 million in Medicaid funding, including about $110 million from state dollars.

Lawmakers also approved several other adjustments to the Medicaid budget, including significant caseload adjustments estimated to cost the state roughly $320 million in general fund dollars. The governor’s recommended budget had counted on a caseload of about 770,000 in each year of the biennium, now expected to be about 830,000 in fiscal year 2022 and 820,000 in fiscal year 2023.

Assemblywoman Daniele Monroe-Moreno (D-Las Vegas), who chaired a budget subcommittee, said Friday that her first few meetings “weren’t cheerful,” but that the state’s recent upward revision in projected tax revenue gave lawmakers the flexibility to reverse many of the proposed cuts.

“We're leaving knowing that we've made some changes now with this budget if we close it as it is, knowing we're making a direct positive impact on so many lives,” she said.

Assembly Ways and Means committee Chair Maggie Carlton (D-Las Vegas) said Friday was “one of the good days in the Legislature at this moment in time,” saying that restoring the cuts helped lawmakers avoid tough decisions about which budgets and services to cut.

“The conversations on that were just heart wrenching,” she said. “We're getting back to square one, we still need to build a couple more rungs to the ladder to get out of the hole. We're not out of the hole yet, but at least we're getting close, especially to these vulnerable populations.” 

Corrections

Prison populations have fallen well below projected levels during the pandemic, so lawmakers approved funding for a reduced number of inmates. In the fiscal year that begins in July, lawmakers now expect there will be an average of 11,043 inmates in the system based on projections released in March; that’s about 1,300 people lower than an October 2020 projection of 12,345 inmates.

Another significant change in the last few months has been a delay in an effort to reclassify the  Ely State Prison as a medium security facility, down from its current status as a maximum security facility. The rural prison has long had troubles with staffing, and the status adjustment was aimed at reducing the number of correctional officers needed to supervise the inmates.

The Governor’s Finance Office says it is requesting the Nevada Department of Corrections to conduct an internal study and gather evidence that reclassifying Ely State Prison — and also raising the classification of medium-security High Desert State Prison — is appropriate for the 2023-2025 biennium.

Aging and disability

Lawmakers opted to restore some of the Aging and Disability Services cuts that would hit some of the most vulnerable Nevadans.

The governor’s budget had recommended cutting the rate paid to providers of early intervention services — which are targeted toward young children with disabilities — from $565 to $500 per month. The reduction would have saved $2.9 million over the biennium.

The full committees opted not to approve the recommendation, keeping the rate at $565 per month.

“I think we all share the same discomfort of the long-term impacts of not being able to intervene early that we know increase over time … and also the impact that has on need for state services down the road,” said Assemblywoman Jill Tolles (R-Reno).

They also opted to reject proposed cuts of six adult rights specialist positions from the long-term care ombudsman program, which was aimed at saving $1.1 million over the biennium. Sen. Julia Ratti (D-Sparks) noted that residents of nursing homes were among the hardest hit by the COVID-19 pandemic, and the staff of the ombudsman’s office were the eyes and ears on the ground about conditions in long-term care facilities.

“It's not quality assurance, it's not licensing, it's very different,” Ratti said. “It's a place where families can go to share their concerns, and I just have significant concerns about not having that resource in place as we are navigating the rest of this pandemic.”

State parks

Lawmakers approved a fee increase for state parks passes to shift costs from the general fund to visitors, saving the state $2 million over the biennium.

Instead of $75, the cost for a day-use annual pass would be $100. There would also be a new $5 out-of-state fee.

Those changes were already imposed effective in April through temporary regulations, with a process set to begin in May to make the regulations permanent by November.

Parks officials do not anticipate that the changes will deter tourists. They said that camping increased 41.2 percent and boating increased by 10.4 percent in 2020 compared to 2019, and noted that other neighboring states charge out-of-state fees.

Budget differences

Lawmakers on budget committees also used Friday’s meeting to hash out budget closing differences — situations that occur when the Assembly and Senate differ on budget-related decisions.

This session, lawmakers only faced two relatively minor closing issues — one related to a travel and meeting budget for the Commission on School Funding, and one related to funding for the Knowledge account — the grant program for higher education facilities aimed at spurring the commercialization of research.

There were no knock-down, drag-out fights over either of the two items — lawmakers opted to go with the Assembly recommendation on the Commission on School Funding budget (dollars for two-day meetings every other month, as opposed to every month) and the Senate recommendation for the Knowledge Account — full funding of $5 million over the two years of the budget cycle.

Budget committee chairs and legislative leaders said they were generally pleased that despite the often intense budget review process, both houses made it to this point with only a handful of differences.

“We've had hundreds of budget accounts, countless hours of meetings, and between both houses, and all these members, and two different political parties, and it boils down to these two very simple closing differences,” Brooks said. “This is to me just an indication of how much we have in common, as opposed to what we differ on.”