NDOC commissary revenue drops after phone-commission ban; agency eyes tablet contracts, reserve transfers

The Nevada Department of Corrections (NDOC) told the joint legislative subcommittees that the Offender Store Fund (budget account 2403708) has lost its telephone-commission revenue stream and now relies primarily on commissary sales and other retail activity, while the related Inmate Welfare Account (2403763) remains dependent on transfers from that fund to pay for inmate programs and certain medical reimbursements.

In a presentation to the Assembly Committee on Ways and Means and the Senate Committee on Finance, Adrian Monroe, Chief of Offender Services, said the offender store fund is a special revenue fund authorized by NRS 209.221 and that the executive budget recommends $25,800,000 for state fiscal 2025–26 and $25,400,000 for 2026–27. Monroe told members the account’s revenues now come primarily from store sales, hobby and craft activities, package programs, device surcharges, vending and visitation sales, and that the fund supports its own personnel, inventory and operating costs.

The loss of telephone commissions took effect as of Jan. 1, 2025, Monroe said, citing the Martha Wright Reid Act and subsequent Federal Communications Commission rulings. "All revenue from telephone commissions is strictly prohibited and has been eliminated from the SFY 2026 and SFY 2027 budget," Monroe said. He told the committees telephone commissions had previously been a material secondary revenue source—after a 2021 FCC action and vendor changes those commissions were first reduced and then eliminated, producing a steady decline in beginning cash balances.

Why it matters: the offender store fund historically transfers about $4 million a year to support the inmate welfare account, which pays for recreation equipment, gate money at release, satellite TV, substance-abuse programs and burial/cremation for indigent inmates. Monroe said the offender store typically transferred roughly $2.3 million of that each year to reimburse NDOC medical for qualified medical expenses; the governor’s recommended budget initially reduced that transfer to $1.9 million, but Monroe said there is an amendment under consideration with the Governor’s Finance Office to reinstate the $2.3 million transfer to medical.

NDOC is pursuing new revenue sources but cautioned they are uncertain. Monroe and Deputy Director of Support Services Kitty D'Sosio described an in-process procurement to offer tablet-based entertainment (streaming downloads and subscription services) to offenders. Monroe said the state is still negotiating contract terms and cannot reliably predict revenue, but he expressed hope for "at least something, a number with 6 figures behind it" and noted other similarly sized states historically obtained between $1 million and $2 million per year from comparable programs (but cautioned ongoing FCC restrictions affect those outcomes).

"They won't actually be purchasing and owning the media," Monroe said of the tablet plan. "They will subscribe to a service." Kitty D'Sosio said the original rollout had targeted April, but technical issues—primarily fiber connections at some sites—have delayed deployment; she said the department was “hopeful for June” but declined to commit to a date while legal and vendor negotiations continue.

The department described several budget and policy adjustments intended to stabilize the fund. Those include administrative rulemaking to limit commissary markups (a response to recommendations from the governor’s 2022 finance office audit), a goal of maintaining roughly six months of operating costs in reserves, and a decision-unit package that would transfer some personnel costs to the director’s office (budget account 3710) and move selected PCNs to general fund support. Monroe said the account currently funds about 48 retail storekeeper positions after planned transfers.

Several members pressed the department on affordability and use of commissary markups. Assemblymember Brown-May and Senator Wynne pressed for specifics about the tablet contract timeline and whether tablet revenues could support free or expanded offender phone minutes; Monroe said vendors and negotiations determine the economics and that any department-wide phone program would depend on the number of minutes and negotiation outcomes. Monroe confirmed the FCC caps (discussed elsewhere in the hearing) limit per-minute vendor charges and that even adding a single minute to statewide phone provision would represent a significant budgetary cost.

Members also questioned use of commissary proceeds for non-commissary items, including burials and cremations. Monroe said offender accounts may accumulate savings for their own burial expenses; when an offender is indigent, the inmate welfare account pays those costs.

The department recommended a series of enhancement and transfer decision units: small equipment and supplies adjustments, a one-time $600,000 allocation proposed to support shortfalls in the prison industries account, several equipment requests tied to health and safety, and the E906 proposal to transfer a set of PCNs to the director’s office while eliminating one vacant PCN (E680). Monroe said if transfers and tablet revenues materialize as projected, the offender store fund could be sustainable and might permit additional price reductions for commissary goods.

Ending note: NDOC told legislators it will continue negotiations with vendors, finalize administrative rules on commissary pricing, and update the committees as revenue projections for tablet services and other contract negotiations are resolved. The governor’s finance office is considering an amendment to restore the historical $2.3 million transfer to medical; committee members asked the agency to provide updated revenue estimates as negotiations progress.