Lawmakers take steps to change retirement, health care benefits
CARSON CITY -- For members of the Spending and Government Efficiency Commission, the 2009 Legislature was a mixed bag.
About half of its 23 recommendations became law or were adopted by the Gibbons' administration in one form or another, while the rest were rejected by the governor or ignored by the Legislature.
Still, Sage Commission Chairman Bruce James said the commission achieved success beyond his expectations because the Legislature for the first time cut expenditures of the Public Employees Retirement System and the Public Employees Benefits Program.
Cutting the expenditures of those two agencies had been the commission's top recommendation.
While the Legislature did not agree precisely with the changes proposed by the Sage Commission, it did make reforms that prospectively will save the state hundreds of millions of dollars.
At one point during the Legislature, Dana Bilyeu, PERS chief executive officer, said the reforms would save $140 million a year.
"These changes were long overdue," said James, the former U.S. printer and a self-made millionaire from Lake Tahoe. "We are going in the right direction. I am pleased by what happened in the Legislature."
James noted that the commission had no power to draw up bills, and its members did not lobby the Legislature, testifying only when requested by Gov. Jim Gibbons.
Mendy Elliott, Gibbons' deputy chief of staff, figured there was nothing shabby about having half of the recommendations adopted.
The SAGE Commission will continue meeting monthly and make recommendations to consider during the Legislature in 2011 or, if possible, to implement sooner by the administration, Elliott said.
"The SAGE Commission worked well together," Elliott said. "The governor was very pleased by the PERS and PEBP reform. Did it go as far as the governor and the SAGE Commission wanted? No, but that did something."
Although the commission's 14 members were named by Gibbons, half were recommended by legislative leaders. Seven are Democrats, and seven are Republicans.
Members include former Las Vegas Mayor Jan Jones, former Assemblyman David Goldwater, former state Budget Director Perry Comeaux, Las Vegas Chamber of Commerce President Steve Hill and ex-Tax Commissioner Barbara Smith Campbell.
The members unanimously backed all of the commission's recommendations except health care spending reform.
With PERS and PEBP facing a long-term funding shortfall of more than $10 billion, SAGE Commission member Carole Vilardo said changes had to be made.
"They have been receiving perpetual increases to the point that the level of contributions made by the state was taking away from other programs and services," said Vilardo, who is president of the Nevada Taxpayers Association.
Assembly Minority Leader Heidi Gansert, R-Reno, doubted the Legislature would have made the reforms it did without the commission's recommendations.
"I absolutely thought what they did was worthwhile," Gansert said. "They had creative ideas. I hope they continue to come up with those ideas."
James said his biggest disappointment was the Legislature's rejection of the recommendation to close the 140-year-old Nevada State Prison in Carson City.
Closing the prison would have saved $19 million a year, according to the commission.
But Assembly Speaker Barbara Buckley, D-Las Vegas, said the closure would have forced the state to spend $220 million on a new prison.
James disputed that contention, saying prisoners and staff could have been transferred to other prisons.
A new prison won't be needed until the inmate population grows, James said.
"There would have been an immediate savings to the state. They didn't have the political will to close the prison. It was their decision."
Gibbons wanted the prison closed, and not just for the cost savings, Elliott said.
Corrections Director Howard Skolnik considered the old prison unsafe, she said.
Elliott also acknowledged that Gibbons rejected a couple of the commission's recommendations, such as adopting a four-day work week for non-critical state employees.
The Gibbons administration contacted officials in Utah, where state government switched to a four-day week, and found that the savings were not that great, Elliott said.
Gibbons also reasoned that residents rely on state government being open on weekdays.
For now, the governor has also rejected a recommendation that fees for state services should cover the costs of providing those services.
Elliott said Gibbons still could adopt that recommendation after his administration reviews all state fees to determine whether they are too high or too low.
"We will be looking at this," Elliott said.
Contact reporter Ed Vogel at evogel @reviewjournal.com or 775-687-3901.
FATE OF MONEY-SAVING SUGGESTIONS
What happened to key SAGE commission recommendations:
APPROVED
Reinstate the proof-of-insurance requirement for new vehicle registration.
Reduce the size of the night shift at the Department of Motor Vehicles while maintaining a five-day turnaround on title requests.
PARTIALLY APPROVED
Modify retirement benefits for newly hired participants in the Public Employee Retirement System. The Legislature limited benefits to employees hired after Jan. 1 but did not make all other cuts proposed by the commission.
Bring the health care benefits under the state Public Employees Benefits Program in line with private industry over the next two years. The Legislature cut what it pays for employee health care.
Eliminate retirement subsidy for participants in the Public Employee Benefits Program who retire after July 1. Legislators required new hires to work at least 15 years to get the subsidy.
Require state agencies to review service fees to make sure they cover the costs of that service. Gov. Jim Gibbons opposed most fee increases, while legislators approved some.
The DMV should charge $2 for driver instruction booklets and a fee to retake a failed driving test. The Legislature passed a law charging $25 for the first test and $10 for retests.
REJECTED
Close the Nevada State Prison to save $19 million a year.
Evaluate and decide by October whether noncritical state employees should be placed on a four-day work week.
Establish a Sunset Commission to review whether state agencies duplicate efforts and consider the elimination of tax exemptions and abatements.
Have the counties fund the Senior Citizens Property Tax Assistance Program.
Design a pilot program that uses a distance-based fee system to charge motorists for building and repairing highways and streets.
Provide financial support for a campaign to ensure more Nevadans participate in the 2010 census.
LAS VEGAS REVIEW-JOURNAL
