State agencies submit $8.2B in budget requests for next two-year cycle
CARSON CITY — Nevada state agencies submitted budget requests totaling $8.2 billion for the upcoming two-year cycle, $800 million more than the current spending level, administration officials said Friday.
The release of agency requests is one step in a complicated budget-building process and likely will not be reflected in the final executive budget that Gov. Brian Sandoval recommends to lawmakers early next year before the Legislature convenes in February.
Mike Willden, Sandoval’s chief of staff, briefed reporters on the documents Friday, the day they were officially filed with the Legislative Counsel Bureau and made public.
The requests include 5 percent budget cuts that Sandoval asked agencies to prepare for in March. Without those, the total is $8.5 billion, Willden said.
“The agencies ask for what they feel they need,” he said. “We may or may not make enhancements. We may or may not take 5 percent cuts.”
Much of the increase is driven by inflation, growing caseloads and mandates.
Inflation for such things as the cost of medication for Medicaid and inmate populations alone is expected to increase spending by $35 million in 2018 and $59 million in 2019.
Increased enrollment in K-12 schools and higher learning institutions and caseload growth in Medicaid is forecast to cost $446 million over the two-year cycle.
“Nevada is growing again,” Willden said.
Much of the growth in the Medicaid request is fueled by Nevada’s expansion of Medicaid under President Barack Obama’s health care law to include childless adults who meet income eligibility requirements. There are currently 650,000 Medicaid recipients in Nevada.
The federal government initially covered 100 percent for newly eligible recipients, but that percentage is gradually dropping toward 90 percent, meaning the state must bear more of the costs.
But Willden said the state is not in a deficit and that warnings of a $400 million shortfall were premature. He said Sandoval’s initial idea to seek an addition bump to Clark County’s room tax rate during this week’s special legislative session was an attempt to help meet the growth demand on the horizon, not plug an immediate hole.
The idea was floated last week but quickly abandoned when legislative and local government leaders balked.
“The state will not begin with a deficit,” Willden said. “The governor will present a balanced budget.”
Willden said the state coffers had a balance of $400 million when the last fiscal year ended June 30. That will allow Nevada to put money — $68 million — into the state’s “rainy day fund” for the first time in a long time.
Willden did say the administration will ask that money from the governmental services tax paid on vehicle registrations again be diverted wholly to the state general fund. Currently, those taxes generate about $66 million annually, with half going to the general fund and half to the state highway fund.
The Economic Forum, an independent panel of financial experts, meets Dec. 6 and will issue its formal projections on state revenues for the next two years. By law, the budget must be based on those projections or include additional revenue to cover additional spending.
Contact Sandra Chereb at schereb@reviewjournal.com or 775-461-3821. Follow @SandraChereb on Twitter.
