State agencies request $10.8 billion for next general fund budget, up 16 percent
Flush with extra sales and gaming tax revenue, state agencies have requested budgets for the upcoming biennium — stretching from July 2023 through June 2025 — that collectively amount to $10.8 billion, a 16 percent increase over the last two-year general fund budget ($9.3 billion).
The enhanced agency budget requests come amid a rapid economic recovery from the COVID-19 pandemic and a period of high inflation that has seen Nevada collect $1.2 billion more in fee and tax revenues over the past two fiscal years than projected, data from state analysts shows.
The largest budget request came from the Department of Health and Human Services, which requested $3.8 billion in general fund dollars for the upcoming biennium. The agency’s total budget request, which factors in other funding, such as federal monies for certain programs, is $17.7 billion over the two-year period — a 16 percent jump from $15.2 billion in the governor’s last budget proposed ahead of the 2021 legislative session.
The agency’s request also includes funding for more than 6,800 full-time employee positions (referred to as FTEs in budget materials), an increase of roughly 500 from the current biennium. That’s out of roughly 29,000 full-time positions requested collectively by all state agencies.
Budgets for K-12 and higher education take up the second-largest share of the budget. The Department of Education’s requested general fund budget ($4 billion) is 20 percent higher than what the department requested in the 2021-2023 biennium ($3.4 billion). The majority of those funds, more than $3.3 billion, fall under the new pupil-centered funding account, created via the new K-12 education funding formula implemented during the 2021 legislative session.
The Nevada System of Higher Education’s requested general fund budget ($1.4 billion) is 8 percent less than requested in the previous biennium ($1.5 billion), following budget requests made during the pandemic.
The requested budget is only 1.2 percent less than the agency's finalized budget for the current biennium, however, and that does not include $195.3 million in requested items for special consideration, NSHE Chief Financial Officer Andrew Clinger told The Nevada Independent.
Notes left on NSHE’s request budget state that “unrestored budget reductions have resulted in programs trying to operate with lower levels of funding.”
With agency requests submitted, the Governor’s Finance Office now enters the process of putting together the governor’s recommended budget, which will be submitted to the Legislature in January ahead of the next legislative session. State lawmakers then spend the next 120 days reviewing and making tweaks to the budget before sending implementation bills back to the governor for a signature.
The funds allotted for that budget will depend on general fund revenue forecasts set by the Economic Forum — a state-appointed panel of private sector business experts — later this year. In December of even-numbered years and in May of odd-numbered years, the forum convenes to forecast tax revenue streams over the coming fiscal years. The projections set the budget used by the governor and Legislature.
In recent years, the forecasts have resulted in major budget adjustments as the pandemic and related economic crisis have thrust uncertainty on revenue projections.
Agency budget requests ahead of the 2021-2023 biennium totaled nearly $9.7 billion, with more than $4.8 billion for each fiscal year.
However, the December 2020 forecast resulted in a major downward revision of projected revenues, leading to a recommended budget from Gov. Steve Sisolak of $8.7 billion. Then as the pandemic recovery progressed quickly, the May 2021 forecast revised projections upward by $586 million for the two-year budget period, allowing for budget restorations of cuts made during the pandemic.
As tax revenues have significantly exceeded projections, state agency requests for the next budget reflect a rosier outlook for the state general fund.
Updated: 10/28/22 at 8:50 a.m. - This story was updated to include additional details about NSHE's requested budget.
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