Thursday, July 24, 2003
Copyright © Las Vegas Review-Journal

Education, welfare programs big winners of tax increases

CARSON CITY -- Taxpayers asked to pony up their share of the $836 million tax increase might wonder where the money is going.

The answer, for the most part, is growth, growth and more growth in state programs, the university system and public education.

Smokers who started paying 45 cents more for a pack on Wednesday, for example, should know that the extra quarter and two dimes out of their pockets will help hire teachers for 27,585 new pupils in the public schools this year and next.

Beer drinkers paying the 50 percent increase in alcohol taxes will help support 7,774 new full-time students at one of the seven campuses of the University and Community College System of Nevada over the next two years.

Tourists and locals who take in a casino show beginning Sept. 1 and pay a new 10 percent live entertainment tax will be helping to pay for the medical care and cash assistance for an ever-increasing number of welfare and Medicaid recipients.

The two-year, $4.9 billion state and public schools budget was finalized Tuesday with Gov. Kenny Guinn's signature of the tax and public education funding bill. Total state general fund spending will increase by 30 percent in the new budget, which took effect July 1.

"The real victory here is that the schools are going to open," Guinn said at the bill signing ceremony. "They are going to struggle on timing but they are going to be open."

The new modified payroll and real estate transfer taxes, the increases in cigarette and alcohol taxes and the other revenue hikes will bring in about 17 cents of every state general fund tax dollar. Existing sales, gaming and other taxes will account for the remainder.

The higher taxes also will support a few modest new programs.

Carlos Brandenburg, administrator of the Division of Mental Health and Developmental Services, said the 34 percent increase in his general fund budget to $372 million is almost all directed at growth, 80 percent of which is occurring in Clark County.

But a new program aimed at helping the mentally ill homeless in Las Vegas was funded by lawmakers, he said. For $400,000 per year, the Program for Assertive Community Treatment will help get 72 homeless mentally ill people into treatment, Brandenburg said.

Another new program, called the Mobile Crisis Team, will work in Las Vegas area hospital emergency rooms to get people with substance abuse or other problems into appropriate mental health programs, he said. At a cost of $200,000 a year, the team will operate around the clock.

Charles Duarte, administrator of the state's Medicaid program, said the $640 million Medicaid budget, a nearly 25 percent increase, also is going mostly to growth. Nearly 197,000 people could be served by the program in the second year of the budget if caseload estimates hold true, he said.

But some modest new gains were made, Duarte said.

A program called Ticket to Work will begin July 1, and allow 500 disabled people on Medicaid to go to work and stay on the program, Duarte said. It will cost the general fund just under $2 million a year.

"It's an incentive to go to work instead of remaining unemployed to keep Medicaid benefits," he said.

At the university system, taxpayers also will get more nursing graduates. A part of the 24 percent general fund budget increase to $891 million will accommodate a plan to nearly double the number of graduates, to 1,326, by the end of the second year of the budget.

With some private donations, system officials said the program will be accomplished with less than $500,000 in general funds, far lower than the original price tag of $12 million.

The cash grant welfare program, called Temporary Assistance to Needy Families, saw a big increase in state funding for caseloads, but no extras, said agency Administrator Nancy Ford.

The 48 percent general fund increase in the program budget, to about $80 million, is enough to keep up with the higher caseloads of 31,000 this year and 34,000 next year, she said. The average grant, which has not been increased since 1992, is $272 per month for a parent with two children. The maximum monthly grant for a parent and two children is $348.

The Department of Corrections, which has seen a slowing in the growth of the inmate population, received one of the lowest funding increases of the major budgets. The agency will see a 6.9 percent increase to $372 million in general fund support.

The new taxes are not just about growth and new programs. They also are about avoiding drastic cuts in public education, said Jack McLaughlin, state superintendent of public instruction.

All taxpayers have to do is look at the lists of cuts to music programs, transportation and athletics that were circulated prior to the funding of schools to see what the money will pay for, he said.

"The funding will keep us from having to make huge cuts and take a major step backwards in funding," McLaughlin said. "We're very appreciative of the citizens' efforts to fund the public schools."

The public schools will get a few extras, including $38 million for textbooks, supplies and computers.

Teachers will get money for 2 percent cost-of-living raises this year and next at a cost of $102 million. State employees and university professionals will get a 2 percent raise in the second year at a cost of about $15 million.

Guinn said the raises are important because they likely will be the last ones for quite a while.

"It's going to be a long spell before the state employees, school district employees and university people get another raise, a long time," he said. "I would say six to eight years without a doubt."

The record tax increase will not affect several major state agencies that get all or most of their funding from other sources. They include the Department of Motor Vehicles, the Department of Transportation and the Nevada Highway Patrol.

But lawmakers did make changes to some of these agency budgets during their marathon session.

Tom Jacobs, public information officer with the Department of Motor Vehicles, said wait times should be reduced to an hour or less at the Sahara and Carey avenue offices, where 18 and 30 new positions were approved, respectively.

The wait times, which represent the entire time in the office, average 87 minutes at the Carey branch and 85 minutes at the Sahara location.

The staffing, which will be added in August at the Carey office and in October at the Sahara branch, will ensure that every service window is fully staffed, even during breaks and lunch hours, he said.

Technology improvements soon will be put in place to reduce lines overall in Southern Nevada. Motorists will be able to make cash or credit card payments at kiosks at agency branches to renew registration or drivers' licenses, Jacobs said.

But if the lines don't shorten, the agency can ask for funding to hire additional personnel for two other branches at Flamingo Road in Las Vegas and in Henderson, he said.

Col. David Hosmer, chief of the Nevada Highway Patrol, said his agency received funding for 10 new dispatchers, all in Southern Nevada, who will help troopers respond more quickly to calls for assistance. The agency also was given authority to spend up to $16 million to repair a problem with its communication system.

The agency did not ask for an increase in trooper staffing levels because it is working to fill a large number of vacancies, Hosmer said.

The Transportation Department, which gets its money primarily from gas taxes and federal funds, was not affected by the action on taxes, said Public Information Officer Scott Magruder.

The statewide gasoline tax of just over 18 cents a gallon was not increased as part of the tax plan.

But the Legislature did authorize Clark County to move forward with a voter-supported, $2.7 billion transportation improvement plan. The plan is being funded with a sales tax increase of .25 percent and other taxes and fees.