I recently invited a number of legislative leaders to my office to lay out for them our revenue projections and my budget priorities for the upcoming legislative session. Prior to the meeting, I had publicly stated my three budget “superpriorities.” They are education; the health, safety, and welfare of Nevada’s citizens; and pay raises, training, and benefits for Nevada state employees. As my staff and I began to pore over the figures, it became obvious that the first two of those superpriorities were going to consume most of the projected $455 million in new revenue for fiscal year 2002-03.
First of all, we have to make sure our school system in grades K-12 can adequately keep up with the enormous challenges created by our state’s phenomenal growth – we estimated that cost at $85 million. Some of those same challenges are faced by the university and community college system, to the tune of another $70 million. Many of our seniors, disabled citizens, and needy families rely on Medicaid to meet their health care needs; Medicaid caseload growth will cost an estimated $190 million. And since we must be able to incarcerate prisoners in order to keep our streets and neighborhoods safe, we have to allow for growth in the prison system – another $50 million.
Keep in mind that those figures reflect what we believe is needed simply to keep up with the ever-increasing demands created by our growth. I told all of our state agencies in no uncertain terms that I would not tolerate budget requests that represented “enhancements” of current levels of service unless they demonstrated offsetting cost-saving measures in other areas. In other words, these projections represent what is needed to “break even” and ensure our level of service does not negatively impact the quality of life for any Nevada resident. It was readily apparent that, without any change, we would not be able to address the third of my superpriorities – state employee salaries and training.
For several months now, my office has been conducting a Fundamental Review of State Government designed to examine how efficiently we are spending taxpayers’ dollars and how we might eliminate duplication and other inefficiencies in the way we do business. At this time, we estimate the suggested improvements and streamlining measures that have emerged as part of our Fundamental Review will produce $30 million in savings. That $30 million is the difference that will allow the state to offer a meaningful pay raise for Nevada state employees. My directive that state agencies submit budgets void of enhancement requests saved an estimated $17 million as well. I feel it would have been irresponsible, at a time when we are facing a budget crunch, to talk about revenues or a lack of revenues without addressing how Nevada spends the funds it does have.
I also pledged, to those who attended that meeting and to the people of Nevada, that I will not propose any new taxes or increases on current taxes in the upcoming legislative session. I have said many times before that I would consider altering the state’s current tax structure only – only — in the case of a fiscal emergency. Through Fundamental Review and a responsible look at the spending side of the budget equation, we have avoided – for the time being – that fiscal emergency.
The reason for making state employee pay raises a high priority was simple – they deserve it. Cities and counties routinely pay higher salaries for similar jobs and we must be able to pay state workers what they deserve or risk losing them. By not paying competitive salaries, the state serves merely as a training ground for other public sector employers.
Now that they have an idea of where I stand on Nevada’s budget picture, I’m looking forward to our state legislators returning with their views on how much revenue the state will have, how we can become more efficient, and what their priorities are. We’re off to a great start, and are already beginning to change the way we do business in Nevada. Once the 2002 Legislature convenes, we will have already had several months of what I hope will be meaningful discussions and debates. The past approach of waiting until after the session begins, surprising legislators with our forecast and priorities, then battling through the differences to accomplish something meaningful in 120 days is simply not the best way to conduct business. We’re doing business differently, and I believe we’re already doing it better.