GOP plan could curb state’s unfunded liabilities

CARSON CITY — Assembly Republicans have issued a five-point state spending management plan that could reduce the state’s $10 billion unfunded retirement and health care liabilities and require the Legislature to set aside money to reduce the effect of future recessions, the party leader said Friday.

“This is absolutely the right time to do this,” said Assembly Minority Leader Heidi Gansert, R-Reno. “We have to look at major reforms. Now is not the time to continue the status quo. We need to make sure taxpayer dollars are spent wisely.”

The 14 Republicans also have decided to reduce their pay — now $8,777 per session — by 6 percent as a show of support for Gov. Jim Gibbons’ plan to cut salaries of state employees, teachers and university system workers by that amount.

“We are not above the state workers in any way,” said Assemblyman James Settelmeyer, R-Gardnerville. “They are our friends and colleagues. What happens to them should happen to us.”

They want to:

• Increase the percentage of education funds that go toward the classroom, meaning money for teachers, supplies and materials. Too much money now goes toward administration, Gansert said.

• Reform the Public Employee Retirement System. Nevada is mortgaging its future on a retirement system that faces $6 billion in unfunded long-term liabilities, she said.

Gansert said PERS is funded at less than 80 percent of what it needs to cover its potential debts. She would bring that figure to 90 percent, which would mean higher contribution rates from employees and the state. Each now contributes about 10.25 percent of employees’ wages to the PERS fund.

Current employees should be given the option of ending the payment of contributions to PERS and instead receive state payments to an individual 401K plan like in private businesses, she said.

Other measure would end PERS for employees hired after July 1.

• Reform the Public Employees Benefits Plan, which faces a potential $4 billion liability. Gansert wants employees to pay a share of their income to cover future benefits. Now employees who retire before age 65 receive subsidies of as much as $696 per month to pay for health care.

Numerous proposals to cut health care benefits also have been advanced by the governor’s Spending and Government Efficiency (SAGE) Commission.

• Change how the state labor commissioner calculates “prevailing wages” or money paid to each type of worker on government construction projects.

Gansert said the wages paid are 20 percent to 40 percent higher than they should be because the wages are based on surveys of construction companies.

• Implement automatic triggers to replenish the state rainy day fund, which now has $632,000. Gansert proposes that 1 percent of state spending should be banked, even during recessions like the one under way.

During good times, she wants to impose triggers that would require the state to bank 25 percent to 50 percent of any excess revenue.

Democrats do not oppose the Republican plan to impose triggers to require the state to save, said Assemblywoman Sheila Leslie, D-Reno.

Assembly Speaker Barbara Buckley, D-Las Vegas, already has drafted a bill to accomplish that, she added.

But Leslie said Democrats would not be receptive to changing the prevailing wage law.

Like the Republicans, they also want to look at PERS and the public employee health care system.

“Sure we will look at their ideas,” said Assembly Majority Leader John Oceguera, D-Las Vegas. “We have been working on some of them for months.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.

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