Lawmakers challenge governor's budget

Legislative leaders hit Gov. Jim Gibbons with a double rebuke Thursday.

First, they restored fee increases he removed from two Human Services budgets.

Then, members of the joint budget subcommittee questioned the reduced caseload projections for Medicaid and other human services the administration claims will save more than $52 million over the biennium.

Outgoing Gov. Kenny Guinn included higher fees in several Health and Human Services Department budgets. When Gibbons took office, he removed them, saying he will not approve any new or increased fees unless requested by those paying the tab.

In discussions of inspection fees for hospitals and other health-related businesses, Health Division Administrator Alex Haartz said there are almost 50 health-related operations waiting for their inspections so they can open. The division originally asked for fee increases to support 17 added staff. Legislative analysts cut that back to nine, but the governor's office eliminated them entirely.

"Certainly these are responsibilities that need to be funded," said Sen. Majority Leader Bill Raggio, R-Reno, who said those inspections are required by the federal government.

The decision will raise fees to cover $805,101 in costs the first year of the biennium and $981,589 the second.

The subcommittee did the same a few minutes later with the Radiological Health budget, unanimously raising fees to cover $386,444 and $604,857 in costs. Gibbons had eliminated fee increases, instead using general fund money to pay for six new staff positions.

"These are very important inspections and we don't want to fall behind in our duty to protect Nevadans," said Assemblywoman Sheila Leslie, D-Reno.

Raggio said outside the meeting he hopes the governor will accept the decisions.

"Where services are necessary to be performed, my preference is to have the fees provided by those receiving the services," he said. "To pay for them out of the general fund just spreads the cost over all taxpayers."

Press secretary Melissa Subbotin said the governor had no immediate reaction to the committee decision and pointed out that the increased fees aren't yet in the budget bill, which will finally be voted on.

"It's too early in the legislative process to speculate on the outcome of this," she said.

The Human Resources budget is in a similar situation. Lawmakers haven't decided what to do with that account yet.

In the same subcommittee meeting, the $52 million in Medicaid savings announced by the Gibbons Administration on Wednesday was questioned. Administrator Charles Duarte said there has been a "significant decrease" in the growth rate of the caseload for both welfare and the Children's Health Assurance Program - a total of 15,666 over the biennium. He said that accounts for $29.5 million of the total.

But Leslie said she doesn't understand how both the number of clients and the projected cost per person can be going down while the state is growing fast and health care costs are rising.

Senate Minority Leader Dina Titus and Assembly Speaker Barbara Buckley, both D-Las Vegas, said the new projections seem suspicious at a time when Gibbons is asking agencies to chop nearly $137 million out of their budgets.

"It doesn't seem reasonable," said Titus. "It just seems convenient."

"I want to make sure the decreases are real before we rely on them," said Buckley.

Human Services Director Mike Willden said there has been no attempt to phony up new numbers. He said one difference is that the initial projections used to build the budget didn't factor in the impact of citizenship verification to qualify for Medicaid.

He said in addition to the $52.1 million in caseload savings, the state will get $9.3 million more in federal funds when the percentage of matching funds increases in 2009. There are also a number of other changes in federal rules and budget adjustments, bringing the total reductions in Willden's department to about $70 million over the biennium.

That is about half the total agencies have been directed to cut in order to balance the budget in light of reduced revenue projections for the coming two year budget cycle.

"We would love to count on this money, but if it's not real, we can't," said Buckley.

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.