Nevada Legislature: Letter to budget office cites errors, holes in budget

The Assembly Ways and Means Committee, where lawmakers have been complaining all month about problems in Gov. Jim Gibbons' proposed budget, has asked the budget office to explain how the administration will handle holes and errors.

In addition, the letter says revenue projections continue to fall, exacerbating what lawmakers see as a new shortfall.

Assembly Speaker Barbara Buckley, D-Las Vegas, said the problems listed in the letter put the executive budget more than $100 million out of balance. 

The letter to Budget Director Andrew Clinger says that after the hearing on tourism and economic development, "it became apparent that there are instances where recommendations included in the 2009-11 Executive Budget may need to be revisited and new recommendations developed."

"We're anticipating the Economic Forum will be likely to lower their projections for May," Buckley said.

The letter asks the administration to not only address the series of issues it lists but, if more funding is needed to balance the proposed budget, to explain where that money will come from.

"For any areas that require revenue or appropriation recommendations to be revised, please provide how the Administration recommends financing additional General Fund support in fiscal year 2009-10 or 2010-11," it asks.

It gives Clinger until March 16 to respond to the committee.

The governor is constitutionally required to present the Legislature with a balanced budget.

The letter signed by Ways and Means Chairman Morse Arberry, D-Las Vegas, asks specifically whether the governor intends to implement his plan to charge the gaming tax up front when high rollers playing on credit lose. Under current law, those taxes are collected when the debt is paid, not when it is incurred.

The revenue generated this coming fiscal year from that change is estimated at $31 million. But Gibbons has been quoted recently as saying he is backing off that proposal.

The letter questions different estimates of what the voter-approved room tax hike would bring in. Legislative fiscal analysts say it would generate $233 million over the biennium " $59 million less than the budget office projection of $292 million.

The letter says the proposed $17.6 million reduction in Special Education funding for the biennium may endanger the state's ability to meet requirements to get nearly $400 million in federal stimulus money.

It also raises questions about apparent conflicts in the budget, including financing the Film Division with room tax revenues that are also recommended to be moved to the General Fund. It says the budget would eliminate three Economic Development and Tourism positions while, at the same time, saying those positions must be restored if the governor's recommendation to merge those two commissions is adopted.

It says the budget lists some $350,000 in General Fund savings by reducing a contract with the University of Nevada, Reno " but points out that funding is federal grant money, not General Fund.

And it says proposed funding for the Tahoe Regional Planning Agency covers just 25 percent of that agency's budget, not the 33 percent required of Nevada under the bistate compact.

Clinger received the letter mid-day Tuesday and said he couldn't comment until he had time to review it in detail.

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