In latest spat with treasurer, Democrats reject $112K college savings software upgrade

Michelle Rindels
Michelle Rindels

A Democrat-controlled panel of lawmakers rejected a $112,000 request for technology supporting a college affordability program administered by Republican Treasurer Dan Schwartz’s office — the latest snub of a state official whom members of both parties love to hate.

Members of the Interim Finance Committee voted on party lines Tuesday — with Republicans opposed — to turn down a contract that would have upgraded the software behind Nevada’s Prepaid College Tuition program. The rejection likely means the Treasurer’s Office won’t have the spending authorized for two more years.

“I’m not inclined to approve this at this time,” said Democratic Assemblywoman Maggie Carlton. “I think the budget process is right around the corner, it should be done the appropriate way, the same way we ask everyone to do this, and it can be processed in the ‘19 session.”

Nevada Prepaid Tuition allows friends or relatives to lock in current tuition prices for a child who will go to college in the future. Chief Deputy Treasurer Tara Hagan testified that the contract with software company Libera would upgrade the program’s database and improve user interface, allowing participants to do more “self service,” such as adding beneficiaries to their account on their own. She also indicated it would reduce human error in data entry.

Carlton pointed out that the treasurer’s office had brought the issue up during the session.

“I’m just trying to see why we’re so persistent about this and why we’re trying again,” she said. “Why are we pushing forward if the budget office wasn’t comfortable with it?”

Senior Deputy Treasurer Budd Milazzo said the contract was discussed during the regular 2017 session that ended two weeks ago, but because a final cost estimate was not available until after the governor’s recommended budget was finalized and it wasn’t considered an emergency request, the governor’s budget office decided not to take the more difficult step of amending the state budget to include it and instead instructed the treasurer’s office to make the request to the Interim Finance Committee.

Hagan said it took longer than expected to negotiate the contract because they struck an agreement with Libera so the software the company develops for Nevada can be repurposed and sold to other states with similar programs. That “strategic partnership” reduced the cost of the upgrade, which would be paid from the treasurer’s office reserves and not the general fund.

“If we miss this opportunity, our costs will probably go up threefold, fourfold,” Hagan said, adding that the company “would definitely move on” if Nevada didn’t approve the agreement.

The move is the latest in the rocky relationship between lawmakers and Schwartz, who was not present on Tuesday but has been accused of asking forgiveness from legislators instead of permission when making changes to state programs. In past hearings, he’s been chastised for hiring a spokesperson without prior permission and adding financial incentives for participants in a college savings program without prior approval.

He’s alienated fellow Republicans by publicly criticizing a tax incentive deal that attracted startup carmaker Faraday Future to Southern Nevada and by presenting a bare-bones alternative budget in 2015 as a counterpoint to Gov. Brian Sandoval’s proposal to raise and extend taxes to support a slate of new education programs.

Republican Assembly Leader Paul Anderson, who acknowledged that he too had clashed with the treasurer in the past, said he thought software upgrade was a legitimate request and has supported it for months.

“I think right now, that office has been demonized, certainly, for who leads that office,” he said. “The treasurer has just burned bridges across the board, so it just seems there’s not going to be any give.”

Schwartz’s Chief of Staff Grant Hewitt said his office will probably be back in August to request the IFC approve money to maintain the old system without the upgrades — something that previously cost about $75,000 per year, more than the upgrades would cost. He said he accepts that lawmakers have trust issues with Schwartz, but thinks it’s devolved into “a truly unhealthy obsession” with the treasurer that is killing good policy.

“At the staff level, we are state employees trying to better the process and it just doesn’t seem we get much respect for trying to grow college savings in Nevada,” Hewitt said. “We realize we work for an elected official, but at the end of the day, the Legislature needs to learn how to leave their political differences at the door and do what’s best for the state, and today that didn’t happen.”

Treasurer's Proposed Contract - Nevada Prepaid Tuition by Michelle Rindels on Scribd

Feature photo: Treasurer Dan Schwartz is seen on May 17, 2017. Photo by David Calvert.


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