Battle lines drawn over final budget plan

With just two weeks left in the 2005 Legislature, the budget battle is clearly centered on differences over education funding that takes up more than half of the state general fund budget.

Senate Finance and the Assembly Ways and Means Committee are millions apart in the Distributive School Account which funds public schools and the university system's budgets.

The largest single dollar difference is in the Assembly vote to give public school teachers 5 percent pay raises each of the next two years. The governor proposed 2 percent each year and the Senate has held off making a decision but has little appetite for 5 percent.

That increase would cost $193 million dollars.

Altogether, the Assembly committee voted to add $328.3 million to the DSA. The Senate added $115.2 million.

Another major disagreement in the public schools budgets is over the move by the Senate and governor to allow Washoe and Clark counties flexibility in applying class-size reduction. Rural counties are now allowed to spread the funding in first through sixth grades - resulting in class sizes of 22 or less up to third grade and 25 in fourth through sixth grades. Washoe and Clark are required to adhere to the 15 student maximum in first and second grades and 19 in third grade. Class sizes in grades above that often have more than 30 students.

Assembly committee members, led by former teacher Chris Giunchigliani, D-Las Vegas, oppose giving the big counties that flexibility. The change is a policy issue and doesn't affect the budget.

The Assembly also opposes the governor's plan to reduce state contributions for teacher health benefits. That was done for the state's Public Employee Benefits Program because costs went down. Giunchigliani said the cost of district health plans went up, not down. The difference is more than $15 million over the biennium.

The most expensive issue in the university system budgets is the $23 million in formula funding which the Assembly pulled out of the budget. Formula funding is the per-student base funding provided to the different campuses. Senate committee members voted to let the system keep half of it for the formula and put the rest into specific programs including nursing.

Assembly members also voted to deny faculty and others who are at or above top salary scales any merit pay raises. Senators voted only for partial limits on those at or above assistant dean. The Assembly plan saves $1.55 million over the biennium, but university faculty representatives say that tells the system's best faculty they can never get a raise and would drive many of them to take jobs elsewhere.

The two committees received one piece of good news Wednesday: The growth of property tax revenues form centrally assessed properties plus new development have all but eliminated the need to add $44.5 million to public school budgets to make up for property tax relief approved earlier this session.

Senate Finance Chairman Bill Raggio, R-Reno, suggested $6 million of that could go toward funding a plan by Assemblyman Brooks Holcomb, R-Reno, to beef up vocational education programs in public schools. Assembly members are expected to have their own ideas on how to spend that cash.

The two committees did manage to agree on one major budget Wednesday - Medicaid. A long list of changes will increase general fund support by $6.9 million over the biennium, much less than the $28.7 million shortfall the division had projected.

Staff analysts found savings of $13 million because inflation increases for HMO providers were overstated, saved $3.5 million in collection of drug rebates and nearly $3 million more in several smaller programs.

They have also reached tentative agreement on differences in how to budget the Western Interstate Compact for Higher Education, group care rates for Adult Group Care facilities and the sexually transmitted disease control program.

But several other differences between the Senate and Assembly committees remain unresolved including the Assembly's desire to shut down the Washington Office, Nevada's lobbyist operation in Washington, D.C. They must also resolve whether to eliminate the WIN contract in the Division of Child and Family Services and hire 66 new state workers to provide those services.

Another disagreement is over the Assembly decision to eliminate the $10 million proposed by the governor to fund economic development efforts in both urban areas and rural Nevada.

The education differences are likely to be resolved behind closed doors over the next few days. But committee members hope to settle most of the other issues in a joint session today.

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