State lawmakers will have almost $200 million less than originally expected as they build a state budget for the next two years. That decline comes at a time when lawmakers also expect cuts from the federal government, which supports programs like Medicaid.
How will lawmakers make it work? What’s likely to get cut?
As KNPR’s Paul Boger reports, the revised projections mean lawmakers will have to make tough choices in the final weeks of the legislative session.
One person who understands how the revised budget could affect the remainder of the legislative session is Mike Willden who served as Chief of Staff for Former Governor Brian Sandoval from 2014-2019.
Willden said the forecast revisions are manageable.
“The forecast is not that dire,” he said. “We're talking about a 1.6% reduction, way different than things that I've been involved in in the past, where we've made much larger cuts than this. I think the 1.6% is manageable through, you know, several options that the legislators have.
One way lawmakers may address the shortfall is to tap into the state’s rainy day fund, which has an estimated $1.3 billion in reserves.
Willden said lawmakers have often tapped into savings to pay for spending priorities.
“It's really a three or four-month cash flow,” he said. “You have to watch that closely, but on the other hand, I'd hate to see reductions to services such as Medicaid, education, things like that. So, I think they certainly have an opportunity to either take some money out of the rainy day fund, which has been done over decades, or to stop putting money into it.”
However, some lawmakers are hesitant to dip into savings due to ongoing questions about the reliability of future federal support.
Analysis by the Guinn Center for Policy Priorities found that federal funding currently accounts for nearly 28 percent of the state’s total budget. A majority of that money, nearly 80 percent, went to the Department of Health and Human Services to support programs such as Medicaid. It provides coverage for approximately one in four Nevadans. The other 20 percent is split between highway funds, dollars for education and agricultural programs, as well as job training.
However, the Trump Administration and Congressional Republicans have prioritized scaling back the government’s size and scope — a vision that includes cuts to Medicaid.
Willden said reducing the reimbursement rate could have a detrimental effect on the state.
“If that match drops from 90% down to the standard 60%, it would be devastating to Medicaid, and I think would require, probably, a special session and significant reductions to Medicaid.”
Mike Willden, lobbyist, The Perkins Company, Former Chief of Staff to former Republican Governor Brian Sandoval
