Budget shortfall passes $1 billion

Lawmakers need to find $1.13 billion to meet a total budget of just less than $7 billion for the rest of this year and the coming biennium.

Lawmakers have added back $980 million to agencies from amounts proposed in Gov. Jim Gibbons' budget. That number includes more than $330 million for the Nevada System of Higher Education approved Tuesday evening.

Add to that the $506.8 million shortfall from revenues not meeting expected levels because of the cratering economy, and it comes to a nearly $1.5 billion gap.

But then lawmakers get to plug in $358 million in federal stimulus money, leaving a $1.13 billion gap.

Republicans say they can't support that much in tax increases to meet the budget. According to two different members of the GOP caucuses, the most they would consider in tax increases is $780 million.

The difference " just under $350 million " will come from what members negotiating the plan have described as "more creative" sources " which means local governments.

Instead of the 4-cent local property tax grab contained in the governor's proposed budget, Clark County suggested the state take the 5 cent portion of the tax Clark County has set aside for infrastructure improvements. They argued it would be easier for the next two years to put off construction work than to find the reduction in their operating budgets.

There are reports, however, that lawmakers plan on taking both pieces from Clark. Together, that would get them over $175 million.

In addition, lawmakers are reportedly looking at money both Clark County and the Clark County School District have set aside for capital improvement projects. In the county, there is just under $480 million in that account. In the school district, the total is reportedly nearly $2 billion.

School, social service budgets restored

Lawmakers on the money committees added a total of $488.6 million to the K-12 education budgets. The lion's share of that is required by state law, which mandates that school budgets be kept whole when sales, property and mineral leasing tax revenues fall below projections " which they have by more than $390 million.

Rejecting the plan to close Nevada State Prison and the Tonopah Conservation Camp added another $29.9 million to the total. Additions the money committees made to Health and Human Services budgets will require just under $40 million more than in the governor's budget.

They voted to restore cuts to personal care attendant services, rejected the plan to shut down all rural mental health clinics, increased the foster care rate for those taking care of siblings and rejected the additional 5 percent reduction in hospital reimbursement rates among other changes to what the governor proposed.

In addition to the $330 million addition required to reduce the university system's General Fund cut from 35.9 percent to 12.5 percent, the system will get about $51 million from the money committee decision to restore part of the governor's 6 percent salary reduction and restore health insurance.

Across the state, university system and public schools, changing the salary cut from 6 percent to 4.6 percent will cost about $105 million. The decision not to cut back state employee and retiree benefits will cost $158.5 million.

Legislative leaders began discussions late Wednesday on exactly what will be in the tax package to fund the proposed budget.

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