Stimulus may require state to restore cuts

Agency heads warned lawmakers Wednesday that Nevada may have to restore many of its budget cuts to qualify for stimulus money.

"I think there's some feeling out there that the stimulus will save us," said Assembly Speaker Barbara Buckley, D-Las Vegas. "That we'll just plug it in to the budget and we're done."

She and Assembly Minority Leader Heidi Gansert, R-Reno, asked whether the state can use stimulus money to restore some of the cuts.

"You have to maintain that level of funding ... in order to be eligible for stimulus money," said Assembly Fiscal Analyst Mark Stevens.

Health spending

Health and Human Services Director Mike Willden said there is potentially millions of dollars for Nevada's Medicaid program in the proposed stimulus package.

"But we may have to spend some money to get the money," he said. "There are maintenance-of-effort provisions throughout the bill."

That, Willden said, means requirements saying Nevada must fund different programs at least at the level of fiscal 2008 to be eligible for stimulus money. He said changes last year in eligibility to save money would cost about $10 million to reverse.

In Nevada Check Up, the health-care program for low income children, Administrator Chuck Duarte said the state would have to add back dental coverage in order to qualify.

With the state's high unemployment rate, the "hold harmless" provisions and the increase in federal match by 4.9 percent, he said the state could receive a huge amount of additional Medicaid and other health and human services funding. According to one analysis, Nevada could get upward of $190 million over the biennium for Medicaid.

Education

Superintendent of Education Keith Rheault said K-12 education would need about $116 million restored to its budgets to meet those requirements before Nevada would be eligible for at least $160 million available in the proposed legislation.

Rheault also said nearly all the money for education has strings attached limiting how it can be spent.

Executive Vice Chancellor Dan Klaich, however, said the money potentially available to the university system comes with far fewer restrictions. He said the system might be able to qualify for up to $300 million in stimulus money and use it to restore formula funding that provides professors, support staff and other classroom needs.

Klaich said the state might have to put about $236 million more in the system's budget to meet eligibility requirements in the proposed package.

However, all those officials emphasized that the contents of the stimulus are changing every day and no one can say exactly what will be in the final bill approved by Congress.

"There's a little bit of nailing Jell-O to the wall in this discussion," Klaich said.

Transportation

Nevada Department of Transportation Director Susan Martinovich painted a different picture, saying her challenge is to have projects "shovel ready" when the money is available in order to capture as much cash as possible.

She said the transportation infrastructure money in the bill requires contracts be awarded in 90 to 180 days and construction, in some cases, to be completed in 18 months.

"We have projects ready for pretty much any allocation they give us," she said.

Senate Majority Leader Steven Horsford, D-Las Vegas, made it clear the state has to access some of these pots of federal money. Citing projections that Nevada's unemployment rate could rise another two percent, he said, "If we're going to have 11 percent unemployment, we are going to have to have a Medicaid program."

Buckley said after the meeting that it will make good fiscal sense to restore some of the cuts in order to claim much larger shares of stimulus money, especially in areas that create jobs in Nevada.

Human services programs have to be maintained, she said.

"There are more demands on the safety net than ever," she said. "We have to provide services."

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