Nevada's New State Budget Approved

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The final elements of a record $7 billion budget for Nevada's government operations for the next two years were approved Monday, the final day of state lawmakers' 2007 session, and sent to Gov. Jim Gibbons for his signature.

AB628, the appropriations act which requires no new taxes, is the end product of lengthy hearings by Senate and Assembly money committees that started their review of the Republican governor's
spending proposal more than four months ago.

Gibbons had threatened to veto the budget if it included new taxes. While it does include numerous fee hikes, mainly affecting interest groups willing to accept them, the governor didn't object to those.

At the close of their 120-day session, legislators also approved SB576, the bill that authorizes the state spending; and SB575, the pay raise bill for classified and unclassified state workers. Adding in AB627, the funding bill for K-12 schools which was approved earlier, brings the total to $7.06 billion.

Also sent to Gibbons was SB578, which provides $804 million for capital improvement and building maintenance projects. That includes $257 million to improve and expand state prisons, and $224.3 million for the state's university and college system.

"Everything has been coming together," said Assembly Ways and Means Chairman Morse Arberry, D-Las Vegas. "It's been a lot of hard work, a lot of 'yes' and 'no' and negotiating, giving up a little, compromising. We came a long ways in such a short time."

When the $7 billion in general fund dollars is added to federal funds and other revenue sources, the total spending for ongoing government programs hits about $18 billion. That overall figure is up 15 percent over the current two-year budget cycle.

Just over half of all general fund dollars are for education. That includes $2.3 billion for K-12 schools and nearly $1.3 billion for the state's college and university system.

Nearly a third, or $2.24 billion, goes to human services, including Medicaid and mental health services. The biggest element in that category is Medicaid, which gets $908.5 million.

About 9 percent would be used for public safety, including the state's prison system which gets about $539 million. The balance of the spending in the budget goes to commerce and industry-related agencies, constitutional offices and other special-service
government operations.

The budget includes pay raises of 2 percent next year and 4 percent in the following year for state workers, teachers and classified employees in the university system.

About a third of the projected revenue that supports the spending comes from sales and use taxes, and another 28 percent comes from fees and taxes paid mainly by casinos. The balance comes from various insurance and business levies, real estate transfer taxes, secretary of state fees and from taxes on liquor and cigarettes.

Gibbons, Senate Majority Leader Bill Raggio, Assembly Speaker Barbara Buckley and other leaders announced a budget agreement last
week, following rush-job revisions to a plan that Senate and Assembly negotiators had accepted but Gibbons had rejected.

The Republican governor, who ran a no-new-taxes election campaign in 2006, had refused to sign off on a slight raise in a business tax that would have generated about $4.5 million next year. Assembly negotiators wanted that for education programs, but dropped the bid for a tax source as senators agreed to free up the money from other budget sources.

Buckley, D-Las Vegas, wanted more funding to expand all-day kindergarten in Nevada schools and came away with about $15 million
for that. Gibbons got nearly $10 million for his education"empowerment" plan which gives public schools more control over programs at the local level.

Buckley called the agreement a "major victory" for education, both for K-12 schools and higher education. She added that that the various K-12 funding additions total $63 million.

The governor insisted on leaving a business tax rate at 0.63 percent rather than seeing it inch up to 0.64 percent.

Gibbons also got $1.7 million for a Nevada National Guard "Youth Challenge" program that focuses on troubled youths, but didn't get funding for an anti-terrorism intelligence-sharing operation in Carson City.

(Copyright 2007 by The Associated Press. All Rights Reserved.)