CARSON CITY — Senate Minority Leader Bill Raggio, R-Reno, complained Friday that the “so-called sound stimulus package” being debated in the U.S. Senate will be of little help to Nevada because the state must spend hundreds of millions of dollars it doesn’t have in order to qualify for key federal education grants.
“We don’t have funding,” Raggio told U.S. Sen. Harry Reid, D-Nev., in somewhat of a scolding tone during a conference call. “We can’t be required to give what we don’t have to qualify for funding. Otherwise it is of no value to us whatsoever.”
Raggio, R-Reno, said later that state government would have to spend $300 million more on higher and public school education to qualify for $509 million in economic stimulus grants for education.
“You are crying wolf before the wolf is at the door,” Reid responded in the call from Washington, D.C., with state legislators, Gov. Jim Gibbons and local government officials.
Gibbons and other leaders are counting on the stimulus bill to help them fill big holes in the Nevada budget. Reid organized the call to 35 key officials to caution them the bill is not done yet. Some were on video hookups from Las Vegas and Carson City while others were on the phone.
Reid urged the Nevadans to rally behind the stimulus bill and not lose sight of the bigger picture.
“Listen,” he told Raggio. “This is not all one program. You can’t be against the whole program because you don’t like what we’ve done with education.
“I hope everyone would understand that if you can’t meet the program we have talked about on education, there are a lot of other things in there,” Reid said, mentioning support for renewable energy, boosting aid for Medicaid and helping handicapped students.
“Is this going to be a package that everyone loves? Of course not. But it is something that is going to be overall so much better in creating jobs than our doing nothing,” he said.
Initial estimates say about $1.3 billion would go to Nevada from the stimulus bill, including $509 million for education and $220 million for highway construction.
In Washington, Reid spoke from a Senate studio. Just off camera, a half dozen of his staff experts on housing, transportation, health care, education and the economy sat available to address detailed questions, underscoring the role of the Senate majority leader in forming the legislation.
Raggio said afterwards that he spoke out of frustration.
“I didn’t get an answer other than I am crying wolf. He (Reid) ignored my question.”
The 37-year state senator said he supports Reid’s effort to create jobs through renewable energy projects.
“But putting a windmill on the top of a mountain next year isn’t going to solve our immediate problems. I am not here to play games or help someone run for governor or the U.S. Senate. I am here to help solve problems.”
Senate Majority Leader Steven Horsford and Assembly Speaker Barbara Buckley, both D-Las Vegas, said earlier this week that the Legislature must add $442 million to Gibbons’ proposed higher education budget and $116 million to the public school budget to qualify for stimulus funds.
State spending on education must rise because the stimulus plan prohibits grants to states whose school spending is less than that during the 2005-06 fiscal year. Under federal jargon, that’s referred as “maintenance of effort” by states.
Late Friday, Gibbons sent a letter to Reid and his colleagues asking them to provide a waiver or modification of the maintenance of effort requirements for “states like Nevada, which have been hit the hardest in this economic downturn.” Gibbons’ letter was a bipartisan effort signed by Buckley, Horsford, Raggio and Assembly Minority Leader Heidi Gansert, R-Reno.
The Senate version of the bill has a provision for the secretary of education to issue waivers for states that cannot meet the effort requirement.
But a Reid aide said it is doubtful Nevada would qualify for a waiver if it is going in the other direction and cutting back on education.
“If the state is cutting by 35 percent, I think the secretary would decide that is not ‘maintenance of effort,’ ” the aide said.
Under Gibbons’ proposed two-year budget, Nevada would spend $6.17 billion on all state programs, or 9.3 percent less than the $6.8 billion budget approved by lawmakers in 2007.
In his proposal, Gibbons calls for a 36 percent cut in state support for higher education. And he cuts public school spending by 2.6 percent.
According to a report by the National Conference of State Legislatures, Nevada’s revenue decline is third worst in the nation, behind Arizona and New Hampshire.
Reid said the formula requiring states to maintain school funding was reasonable.
“We cannot just throw that money out there and let people do whatever they want with it,” Reid said. “I don’t think we are asking for too much.”
The formulas are designed to prevent states from backsliding on their commitments and then expecting federal money to bail them out.
Reid said he spoke Thursday with school superintendents in Nevada’s 17 counties, and other education officials, and he was told the federal requirement was doable.
Raggio said he can’t understand how county school superintendents told Reid the plan was “doable” when that is not the analysis of the legislative fiscal staff.
Buckley said no one is sure how much more money legislators must restore to education to qualify for federal funds.
“It is a very complicated formula. It could be in the tens of millions or hundreds of millions. We have a budget proposal with severe and unworkable cuts on education.”
Contact Review-Journal Capital Bureau Chief Ed Vogel at email@example.com or 775-687-3901. Contact Stephens Media Bureau Chief Steve Tetreault at firstname.lastname@example.org or 202-783-1760.HOW IT AFFECTS YOU
A comparison of some provisions in the House and Senate bills:
Tax credit of $500 per worker ($1,000 per couple) for 2009 and ’10
House: $145 billion
Individuals making more than $75,000 ($150,000 per couple) would receive reduced amounts.
Senate: $142 billion
The credit would phase out quicker for families making more than $150,000.
Direct one-time cash payments
House: $4 billion
$450 to SSI recipients
Senate: $17 billion
$300 to Social Security and SSI recipients, and some veterans
Expanded Earned Income Tax Credit for families with at least three children
House: $4.7 billion
Senate: $4.7 billion
$2,500 college credit
House: $13.7 billion
The credit is phased out for couples making more than $160,000.
Senate: $13 billion
Reduces the amount refunded to families that pay no taxes
First-time homebuyer credit, currently $7,500 but must be paid back if home sold within three years
House: $2.6 billion
Repeals a requirement that it be paid back. The credit is phased out for couples making more than $150,000.
Senate: $35.5 billion
Doubles the credit to $15,000
Home energy credit for projects reducing energy use up to $1,500
House: $4.3 billion
Senate: $4.3 billion
Exclude from taxation the first $2,400 a person receives in unemployment compensation
House: No provision
Senate: $4.7 billion
Make interest payments on auto loans and sales tax on cars deductible
House: No provision
Senate: $11 billion