Nevada gov says Vegas student shortfall helps state budget

A drop in Las Vegas-area public school enrollments should save the state -- struggling to deal with a revenue shortfall -- nearly $15 million, Gov. Kenny Guinn said Friday.

Guinn, recovering at his Las Vegas home from prostate surgery, said the state's per-pupil support formula for schools would have mandated the payment had enrollment estimates been met.

"But if the students don't show up, you don't get to spend it. That money would come back to the state," Guinn said, adding that the saved money "would be of some help" in curing a state revenue shortfall that that could range from about $300 million to $370 million.

While the state benefits, the enrollment drop -- 3,830 fewer students than expected -- will force the Clark County School District to make another round of budget cuts.

Walt Rulffes, the district's chief financial officer, said about $7.5 million of the $14.6 million reduction will be covered by a slight, temporary cut in staffing.

Another $4.4 million will be made up with reserve funds, cuts in overtime and a hiring freeze for nonschool administration and support staff. But administrators still must find another $2.7 million in budget reductions.

Guinn, 66, released from UCLA Medical Center on Wednesday following his successful surgery Monday, also said that while recuperating at home he'll work on Medicaid and health care issues in trying to resolve the state's budget woes.

Medicaid, the federal-state program that provides health care to the poor, is expected to be $26 million in the red by next June, and other state human resources programs face budget problems because of higher-than-expected enrollments.

A few days before undergoing surgery, Guinn announced $47 million in state budget cuts -- half of them in human services and higher education.

Those cuts, averaging 3 percent out of budgeted funds for most state agencies, follow earlier revenue-preserving moves such as postponed one-time expenditures and a state hiring freeze.

Nevada also spent down reserves and refinanced debt, and Guinn will ask lawmakers in February to let him tap the state's rainy day fund to cover the rest of the shortfall that could run as high as $370 million by next June.

The budget shortfall was estimated by Guinn at about $294 million by the end of this fiscal year. But a governor's panel studying possible new taxes for Nevada has said the figure could be as high as $370 million.

Guinn provided details of nearly $38 million in cuts by various state agencies that will have to be made to get through the current fiscal year.

He added another $9 million -- for a total of $47 million -- will be needed to cover increased costs of employee health insurance. The source of that $9 million hasn't been pinpointed yet.

The governor said that early action by the 2003 Legislature to find new revenues, possibly by quickly passing one of several potential higher or new taxes, could ease the need for some of his cuts.

Guinn also said his surgery shouldn't slow his re-election campaign. Democratic state Sen. Joe Neal, D-North Las Vegas, is considered a longshot in his bid to block the GOP governor from a second, four-year term.