State agencies left $84 million unspent in fiscal 2009

State officials got an unexpected windfall when they closed the books on fiscal 2009 revenues: The shortfall caused by falling revenues at the end of the year was erased by an unexpected increase in reversions.

Reversions are revenues that state agencies either didn't need to spend or were unable to spend during the fiscal year. They revert back to the state treasury.

Reversions were projected to come in just a bit more than $45 million. When the controller's office closed the books for fiscal 2009, however, total reversions came to $84 million - a $39 million windfall for the state.

Coincidentally, that's just about exactly the amount General Fund revenues had fallen short of the Economic Forum's projections for 2009. More specifically, the General Fund finished the year $86,387 ahead of projections.

It left an ending fund balance in the state treasury of $187.2 million - $24 million above the mandatory minimum the state has to keep to ensure it can pay the bills.

"That puts us right at the point we thought we'd be," said Director of Administration Andrew Clinger.

In the short term, he said that staves off the necessity of actually using the line of credit lawmakers included in the budget. If and when it becomes necessary to pay operating expenses of state government, Treasurer Kate Marshall can take up to $160 million in a loan from the Local Government Investment Pool her office operates for cities and counties in Nevada.

Overall, Clinger said the biggest amounts saved were from positions held vacant or eliminated throughout state government - which also saved millions in raises those workers would have received. The total reverted in salary money was

$11 million.

Some $11.8 million was reverted from the Interim Finance Committee account. The majority of that money, $7.8 million, was originally appropriated to cover any increases in utility costs to state agencies and school districts.

The largest contributor to those reversions was the Mental Health and Disabled Services division in Health and Human Services which returned $15.4 million to the General Fund. Administrator Harold Cook said those savings were a combination of "client services which we did not bring on and salary savings because of positions we did not fill."

"We actually fairly rapidly downsized and had significant savings - and we only had to lay off a half-dozen people."

In addition, Cook said they knew early last year that cuts were coming.

"So we did not ramp up services in 2009 the way we had projected," he said. "We did not want to come to July 1, 2009,and have to say, OK, we do not have money for you. You have to go away."

The Division of Child and Family Services also reverted a substantial amount of money - $9.5 million. Administrator Diane Comeaux said that is a result of positions held vacant and slower caseload growth than originally budgeted.

The Department of Education turned $10.7 million in public school funding back to the state. Deputy Superintendent for Finance Jim Wells said the majority - $6.6 million - was Remediation Trust Fund money school districts didn't spend. He said his sense is that school districts "feared more reversions would be requested," and decided not to spend some of the money appropriated for including after-school tutoring and reading programs.

Another $3.2 million came from teacher signing bonuses. He said with enrollments slowing or down, fewer new teachers were added by districts so fewer teachers were eligible for signing bonus money. More was saved by ending the 5 percent bonus pay given teachers in hard-to-fill specialties including speech pathology and counseling.

The Department of Corrections turned back less than $700,000. Director Howard Skolnik said he was surprised it was that much given he can't reduce staffing below a certain level because of safety concerns.

The University System, despite receiving some $900 million in state funding over the 2008-2009 biennium, reverted just $167,793. But the university is in a unique position. Not only do the campuses have state funding, student fee revenue and gifts and grants, they have the authority to decide which pots of money are spent first. State funds are normally expended before other revenues are committed.

Clinger pointed out the reversions are a one-time boost to the state that won't be repeated this fiscal year because everything that could be cut from agency budgets during the 2009 Legislature was, leaving little if any extra money in any state budget this biennium.