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Senate fiscal staff briefs committee on Nevada operating budget; highlights ARPA, K‑12 accounting change and reserve balances
Summary
LCB fiscal analyst Wayne Thorley presented an overview of the state operating budget, emphasizing the role of American Rescue Plan (ARPA) funds, the impact of new K‑12 accounting under the pupil‑centered funding plan and the size and limits of Nevada’s rainy day and education stabilization accounts.
Wayne Thorley, Senate fiscal analyst with the Legislative Counsel Bureau fiscal analysis division, presented a high‑level overview of Nevada’s state operating budget to the Senate Finance Committee, focusing on how federal relief funds and changes in K‑12 accounting have affected recent bienniums.
Thorley told the committee that the coronavirus state fiscal recovery funds (ARPA) produced a notable balance‑forward increase for the state and said those ARPA dollars must be spent by Dec. 31, 2026. He said the ARPA-related balance forward and the accounting change that moved K‑12 revenues into a state education fund together explain much of the budgetic increase members see across the recent bienniums.
Thorley explained the budget presentation format members will use this session: the governor’s proposed budget is shown as adjusted base, maintenance and enhancements. He noted the base budget is the legislatively approved spending carried forward (after removing one‑time items), maintenance covers items outside the committee’s discretion such as caseload growth and some inflationary costs, and enhancements are proposed new or expanded programs that the committee will scrutinize. Thorley said fiscal staff will focus the committee’s attention on the enhancement decisions, because the base comprises the large majority of ongoing spending.
On workload and accounts, Thorley reiterated details in the committee packet: the governor’s recommended budget lists 485 accounts, 4 without recommended funding; fiscal staff identified 221 accounts for proposed staff closing and 260 to receive hearings. He also noted nine new budget accounts in the executive budget, including the Nevada Employees Savings Trust administration account (11O2).
Thorley summarized revenue composition and savings accounts. He said sales taxes remain the largest single source of unrestricted general fund revenue (roughly one‑third), that newer sources such as the modified business tax and the commerce tax have changed the revenue mix, and that the Economic Forum’s forecast underlies the governor’s recommendation. Thorley described the two savings accounts: the rainy day account has a legal cap of 26 percent of operating appropriations and the education stabilization account has a cap of 20 percent of state education fund authorizations; together the two accounts totaled roughly $2.0–$2.1 billion in the most recent projection, an amount Thorley said could support roughly one‑third of annual general fund operating appropriations as a rough estimate.
Senator Jon Titus asked whether interest earned on the education stabilization account remains in that account. Thorley replied, “The interest earned in the education stabilization account stays in the education stabilization account.”
Thorley told the committee that staff are available to follow up on more detailed revenue questions, including gaming‑tax mechanics and per‑capita or inflation‑adjusted revenue trends. He said the fiscal brief and the committee packet would be posted online and printed copies supplied to members and the public.
