MEETING MINUTES

SUBCOMMITTEE ON THE USE OF LONG-TERM FORECASTS

TASK FORCE FOR LONG-TERM

FINANCIAL ANALYSIS AND PLANNING

January 12, 2000

Legislative Building, Room 2135

Carson City, Nevada

 

SUBCOMMITTEE MEMBERS PRESENT:

            Mark Arrighi, Chairman

            Diane Torry, Vice Chairman

            John P. Comeaux

            Charles McNeely

            Bob Olson

            George Stevens

 

LEGISLATIVE COUNSEL BUREAU STAFF PRESENT:

Mark Stevens, Assembly Fiscal Analyst

            Ted Zuend, Deputy Fiscal Analyst

            Sherie Silva, Secretary

 

Chairman Arrighi called the meeting of the Task Force Subcommittee on the Use of Long-Term Forecasts to order at 1:35 p.m.  He announced that most of the meeting would focus on Items III and IV of the agenda, and he hoped that Ted Zuend would be able to provide committee members with some suggestions and ideas to generate discussion on ways to make the long-term forecast process work and become a component of the budget procedure.  He asked Mr. Zuend to briefly address Item II, Summary and Discussion of the Uses of Long-Term Forecasts by Other States.

 

Mr. Zuend stated there are a number of states that have implemented the process being pursued. Most of them seem to be more informal than what is required by the Nevada Task Force, since much of the process is not defined in their statutes.  It appears that the governors and legislatures simply worked together to develop procedures without legislation.  Mr. Zuend said this obviously could also be done in Nevada, except for the fact the assignment of the committee is to propose legislation for the 2001 Session.  The governor and legislature will then decide if legislation is necessary and what final form it should take.

 

Mr. Zuend noted a couple of instances where the processes were put in statute, one of them being the state of Washington, which created a legislative body with three members appointed by the governor and three by the legislative branch.  This committee prepares caseload forecasts.  At the time, however, the Washington legislature was Republican and the governor was Democrat, which may have made it harder to reach a meeting of minds.  Mr. Zuend observed that there has been only one instance in recent years when the Governor of Nevada and both houses of the legislature have been of the same party.

 

Mr. Arrighi agreed most of the examples were informal and, even if they were formal, the actual uses of the long-term forecasts were not set statutorily—there were no definitions as to who must use the forecasts.  He asked for other committee members’ observations.

 

Diane Torry remarked that the short-term and long-term processes in other states are integrated processes—they are not separate.  She feels this is an important point to keep in mind as the committee deliberates.

 

Bob Olson asked if staff was aware of how effective any of the processes have proven to be, especially those that appear to be in existence the longest.  He wondered if Russell Guindon had any indication when talking with people from other states as to how accurate their processes have been.

 

Ted Zuend replied that he hesitated to answer Mr. Olson’s question, as Russell Guindon had been the one to make contact with the other states, and due to the holidays, it was difficult to reach people.  He said he knows the Florida process, which is fairly complicated with many different conferences, does work; people pay attention to the information and make decisions based on the forecasts.  He said Florida has a much narrower tax base than Nevada; it relies two-thirds on just sales tax—they do not have a gaming tax or state income tax.  Mr. Zuend recalled that several years ago a sales tax was added to services to provide a broader tax base, but it was repealed the following legislative session because it caused so much consternation to the parties affected.

 

Mr. Zuend said the Utopian idea is that instead of making ad hoc decisions every two years to try to balance the budget, either raising revenues or making cuts, forecasting provides a method to look into the future and try to plan ahead.  There are a few other states whose forecast process seems to somewhat drive policy considerations and actions, i.e., the forecast document is actually used rather than put on a shelf and ignored.  Again, he noted, he did not know how successful the processes have been, but he thought Russell Guindon would be following up on further information now that the holidays are over.

 

Perry Comeaux remarked that from a practical standpoint, it is possibly desirable to have legislation that requires long-term forecasts, and it is probably desirable to require that those forecasts be considered when certain kinds of decisions are made, particularly in creating programs and revising the tax structure.  He does not believe that a law could be passed that would require people to be smart, i.e., the information can be provided, but it is not possible to make people use it.  Mr. Comeaux said when someone wants a program bad enough, the fact that it does not fit into the budgetary scheme will not matter.  He is not sure what kind of legislation could be proposed in that area.  Personally, Mr. Comeaux continued, he would not be opposed to legislation requiring long-term forecasts because that is the smart thing to do—it is essential to know what decisions being considered today will likely produce ten years down the road.  He noted a lot of programs have been created over the last ten or twenty years that, if what is known now had been known then, might not have been created.  Once a program is started, it is almost impossible to eliminate it because of the various constituencies created by the program.  Mr. Comeaux reiterated it would be difficult to set up forecast processes that require people to use them.

 

Diane Torry remarked one of the aspects of the Florida example that struck her was the educational piece, i.e., publishing the forecasts and the analyses of how accurate they have been, as well as the issues that those forecasts of revenues and expenditures have brought up.  It becomes an educational process, both for people who are working in government and the voter population.  She feels this is a very positive use of the information.

 

Mr. Arrighi asked if there is a requirement that  proposed legislation having a fiscal impact must be accompanied by the fiscal impact information and, if so, what period of time the impact statement must cover.  Mr. Zuend replied if a proposed bill increases state expenditures or decreases state revenues, a fiscal note is required, but it only extends through the end of the biennial period.  He cited an example of when an exemption is created from the state sales and use tax, it must be voted upon by the people.  If the legislature decides to grant an exemption (such as food), the measure must go on the ballot, which is a time-consuming process, and therefore the legislation may not take effect for one or two years.  Thus the tax decrease may affect only the last six months of the budget for that biennium, which does not result in a huge loss.  However, it is an ongoing loss which is not totally presented or considered.  On the spending side, Mr. Zuend continued, when a new school is created the expenditures do not occur overnight, and expenses are not incurred for probably a year or so, thereby causing the biggest impact to fall in the following biennium rather than the biennium in which the school is approved.  The full impact is thus never really analyzed.

 

Mr. Comeaux added the real benefit of long-term forecasting is that it will make the state look at long-range income and expenses, although there will always be those who will propose a program at the end of a biennial period in order to make the impact appear smaller, leaving the problem of how to pay for it to someone else.  Mr. Comeaux feels this process will at least put the information out on the table for everyone to look at, and the individuals trying to sell the program will be in a position of having to propose a way to pay for the program or defend the expense.  He said if a careful, methodical forecasting process is developed to be used in putting together the Executive Budget and guiding the legislature during their consideration of the Executive Budget, there must be a requirement that proposals brought up during the session include long-range forecasts.

 

Mark Stevens, Fiscal Analyst, said he could not agree with Mr. Comeaux more.  He thinks the same would apply to the Executive Budget process as well.  He recalled that during the 1997 Legislative Session a proposal was received to provide one computer in each K-12 classroom in the state.  A certain amount of one-time money was proposed to be used in that biennium, which was money that would not be available in the following year.  Additionally, more classrooms would require more computers, thereby increasing costs in future years.  Mr. Stevens said there should probably be a requirement that legislative proposals be costed out over a number of years.  There are also instances in the Executive Budget process where the requirement would be applicable.

 

Mr. McNeely said he would support obtaining information available from other states, particularly from Florida and Washington, which have had some degree of success.  He feels the issue is to provide information that will help in the decision-making process  by developing an overall structure or process which will allow the legislature and government to be in a position to evaluate programs. 

 

Mr. Arrighi asked who determines the fiscal impact of legislation.  Mr. Zuend responded that in most cases, the agency producing the fiscal impact has jurisdiction.  For example, if a tax decrease is proposed, the Department of Taxation would prepare the fiscal note, which is forwarded to Mr. Comeaux’s office and then to the Legislative Counsel Bureau’s Fiscal Division for review.  Once it is reviewed and approved, the note becomes a part of the bill which the legislators review in committee.

 

Mark Stevens explained there are opportunities to take a closer look at the fiscal note if the bill is generating a lot of interest or if there is some question as to the fiscal impact.  The committee chairman can ask the Fiscal Division to provide a detailed analysis of the fiscal note.  When a bill looks like it has a good chance of passing, further review of the fiscal impact is often requested in order to make sure the estimates are accurate.

 

Mr. Zuend further explained that most legislation gets amended in various ways, and there is no requirement that a fiscal note be produced.  However, a committee chairman can require that a fiscal note be produced on a bill that has substantial amendments which may increase or decrease the fiscal impact.  Especially now with the limited sessions, the process requires everyone to move quickly so that the bills can be thoroughly heard and considered.

 

Mark Stevens added that in a perfect world, a fiscal note should be prepared on each amendment, but it would be too time consuming.  Therefore, it is up to the committee chairman, the Speaker of the House, or the Majority Leader of the Senate to request a fiscal note on any amended bill that they choose, which does happen during the session, albeit not that often.  Mr. Stevens reiterated that if it appears the bill is important and likely to move forward and there have been substantial amendments, there is a process in place for a fiscal note to be done.

 

Mr. Arrighi asked if the Fiscal Division envisions the committee proposing legislation that would require fiscal notes to include long-range estimates, with the forecasting committee having input or oversight on those issues.  Mr. Zuend replied he does envision something similar prior to the Budget Office drafting and completing the Executive Budget, as well as during the legislative session.  He noted the Economic Forum works during the legislative session, the Fiscal Division now has an economist on staff, and Mr. Comeaux has an economist in his office.  The Economic Forum’s  revenue duties might be expanded, and a different group could possibly be formed for the expenditure side. 

 

Mark Stevens commented that timing of the forecasts is an important issue.  He has not thought through the process, but mechanically it would be difficult to provide timely estimates during the legislative sessions.  Some legislation is not proposed until the last few days of session.

 

Addressing Mr. Comeaux’s previous concerns, it was Mr. Zuend’s thought that Mr. Comeaux’s economist, as well as the Fiscal Division’s economist, could be analyzing the long-term implications of a new program during the bill draft stage.  Some states have a process whereby staff gets together and tries to develop the fiscal impact of legislation of some importance.  It is not possible to deal with every piece of legislation, but a standard could be established, e.g., if the amount is more than 1 percent or 2 percent of the budget, then the long-term fiscal impact would be analyzed.  Mr. Zuend said if a meeting of the minds could occur between the Executive Branch, the Legislative Branch, and possibly the agency involved, then the proposed legislation could be brought before the appropriate committee for consideration.  He noted that not only are the agencies in the Executive Branch proposing different programs, the Governor has his priorities and the legislature has its own agenda.  Thus there might be an occasion when the Budget Office, the Legislative Counsel Bureau, and the agency totally disagree, and the issue could then be brought before an independent committee. 

 

Bob Olson said it seems to him there are two distinct issues being considered:

 

1.         How can the agencies be required to adhere to whatever formula the committee recommends in the budgeting process?

 

            2.         What happens during the legislative session?

 

Mr. Olson agreed that the committee can request or require that information be provided to the legislators in the decision-making process, but they cannot be compelled to utilize the information provided.  In terms of establishing the budgetary process itself, he said it seems it would be a much clearer issue to say, as one of the states does, that these various conferences must adhere to the forecasts that are developed by the forecasting bodies.  That seems to be a much more simple concept than dealing with a group of legislators that change every two years and have different priorities each session and compelling them to “drink the water.”

 

Ted Zuend concurred, adding that even if the legislature wrote a statute requiring adherence, a “notwithstanding” phrase could always be attached to the bill and the statute could be ignored.  However, the biggest benefit would be the informational component, because if there was a program which appears to involve very little cost but has the potential of exploding costs two years or four years hence,  someone could take the information and at least maybe temper some of the decision-making.

 

Mark Stevens said in considering whether caseload conferences are going to be a mandated part of the process, the timing must be determined, i.e., when is the information available, because changes can occur very quickly.  For instance, if the long-range forecasting group made a decision during the summer, Congress could meet in September or October and make changes to the federal law which would impact the state’s caseload projections.  He reiterated that timing is a very important consideration when requiring something be mandated.

 

Mr. Arrighi agreed, noting that forecasts are based on a certain list of assumptions, and assumptions change.  In the long-term forecasting for this committee, the ten-year projection does not look very good for Nevada from what is known today, but potential changes can impact the long-range planning and information available.

 

Mark Stevens explained that the sponsor of the long-range planning legislation was more interested in the state taking a look at a snapshot of six years or ten years into the future to see if there is a gap and if so, how big it is.  Dialogue can then commence as to what needs to be done to close the gap.  The determination of how the information is developed and how it will be used is up to the committee.  Mr. Stevens reiterated the intent of the legislation was for long-range use rather than short-term, and the genesis of why the legislation was introduced was to take a look at the long-range snapshot and see if revenues and expenditures match up.  If they do not and there is a revenue shortfall, then it must be decided what steps should be taken to address the shortfall in order to avoid a problem six years in the future. 

 

Mr. Arrighi agreed that timing is everything.  When the final legislation is done, there is a known set of facts and assumptions upon which a more accurate forecast can be formulated. 

 

Mark Stevens said he also thinks the committee needs to take into account the Governor’s budget process, because on August 15 the agencies submit their requests to Mr. Comeaux, who works on them through the first of the year when the budget is submitted to the legislature for review.  There could be some long-term revenue and expenditure information that might be helpful to that process as well.

 

Ted Zuend remarked that reports can be produced that show a gap between expenditures and revenues just based on existing programs, but that does not necessarily stop anyone from creating new programs or proposing tax cuts that will widen the gap.  Publicizing the six- and ten-year forecasts alone may not accomplish the goal.  The committee must determine how the long-term forecasts should be considered when programs or proposals are evolving and changing.  A huge program may be passed now and the costs may be absorbed this session, but the money may not be available the next session because the revenues and expenditures do not match up. 

 

Chairman Arrighi commented that in order to determine the uses, the committee must determine the users, and there might be a wealth of information available down to the local government level that could be part of the forecast that would be useful at both the local and state levels.

 

With regard to how the forecasting process might be used, Mr. Zuend pointed out that if a process is created that provides a long-term caseload outlook for example, implicit to that is a short-term caseload outlook.  It is not possible to create a long-term without doing a short-term because today’s data cannot be ignored.  For example, when doing a long-term forecast in a recession, one must assume that things will get better.  Certain cyclical effects over the short-term must be acknowledged, so any long-term forecast would include a short-term forecast as well.  Mr. Zuend explained that the committee’s charge is to develop a long-term process, but that is the minimum mandated by the legislation, not necessarily a restriction.  The question should be asked whether short-term forecasting should be used in the process as well.  He emphasized that one fundamental question the committee must answer is whether the short-term data should sit on a shelf or somehow be incorporated into the process as well.

 

Mr. Arrighi agreed, adding that to get to the six- and ten-year period horizons, the three, four, and five-year data must be known.

 

Perry Comeaux remarked that it is not the fact that caseloads are not forecast, it is the fact that consensus forecasts are not done.  His office, through the various agencies, collects caseload forecasts for K-12 school enrollments, university enrollments, prison population, probation and parole population, Medicaid, TANF, and so on.  He does not think there is much difficulty with LCB in terms of forecasting, but there is no formal consensus process.  If things don’t quite fit, the forecasts are adjusted which, he added, is why the Economic Forum now does a revenue forecast.

 

Mark Stevens agreed, adding that Mr. Comeaux’s process is geared toward developing the Executive Budget, which will begin in the fall of this year.  It would be great if some forecasting can be incorporated into that process.  One of the questions that must be asked is when the long-range forecasting group will produce its document—in the summer, in the spring, in the fall?  Some mechanism will have to be in place for short-term forecasts in order to meet the timeframes of the long-range forecasts.  The committee must decide whether to require the Executive Branch and the Legislative Branch to utilize the forecasts, which also relates to timing.  If forecasts are produced in May and the Executive Budget is built six or seven months later, a lot could happen during the interim, and adjustments must be made.

 

Mr. Zuend advised the committee there is no requirement locking them into one forecast a year, nor is there anything preventing the forecasting body from making projections for all ten years four times a year, which would not make sense.  However,  there is nothing stopping short-term timeframe forecasts on various issues or concerns as they arise.  If the committee decides it is a wise idea for the independent forecasting body to make caseload forecasts independent of the Budget Division and Legislative Counsel Bureau, the timeframes could be established by moving back or forward into the budget process as needed, and perhaps even asking the group to meet when adjustments need to be made.  Rather than just creating six- and ten-year forecasts, one of the keys is to get the legislature, Executive Branch, agencies, and public to pay attention to them. 

 

Mr. Arrighi added that once the initial ten-year forecast is made, the committee would revisit the data to make adjustments for changes in assumptions and other conditions.  He does not envision it being a huge process.

 

Mr. Zuend said right now a long-range planning group must be established, but there is potential to expand the group’s duties beyond preparing ten-year forecasts in order to keep it in the public eye and make everyone involved mindful of its existence.

 

Mr. Zuend then turned the discussion to short-term forecasting, commenting that the committee must determine if the forecasting group should also do some short-term forecasting and, if so, if those forecasts should be utilized in some way or just simply become part of the larger document.  One method would be to mandate a short-term forecast and require that a consensus be reached, on caseloads for example. Or instead of a mandate, a forecast could be produced by a separate body which may differ from the agency’s figures.  Another possibility would be to incorporate the short-term effects of tax policy changes.  Short-term forecasts could also be used by local governments as a reality check against their projections, although at this point, Mr. Zuend does not think anyone is envisioning projections below the state level.  However, the smaller counties that do not have economists or budget analysts on staff could benefit from the implications of statewide short-term forecasts.  As mentioned in the last meeting, there are inter-ties between what counties and cities do and what the state does.  The inter-tie is obvious on the revenue side, i.e., property tax, sales tax, etc., and on the spending side there is at least some potential for overlap. 

 

Mr. Olson asked for clarification of the charge of the committee and its long-term objectives.  He referred to a comment by Mark Stevens that the intent of the drafter of the legislation was to determine if there is going to be a gap between future revenues and expenditures.  That being the case, Mr. Olson observed, just solely from funding requirements for class-size reduction and long-term care of the elderly there is an $800 million shortfall within a very short period of time.  He wondered if it is the committee’s responsibility to address the issue of how the shortfall should be dealt with.  If that is not the case, has the committee accomplished the intent of the legislation by simply stating that there is an $800 million shortfall for just two items?  If the committee is going to just address the budgetary process and create six, eight, or ten-year forecasts, then mandate that every agency take the information into consideration when making their requests and that the Governor’s Office and the Budget Office utilize the information and require everyone to work within the same set of rules to develop the budget, then perhaps that is all the committee is trying to accomplish.  However, if the intent of the legislation was to identify whether or not there is going to be a shortfall in funding, and if so, Mr. Olson again wondered if that had not been accomplished.

 

Not in an organized fashion, Mark Stevens replied.  Although the Governor is going through a process that would estimate revenues out eight years, there has not been an organized effort that will forecast general revenues and project state agency expenditures out ten years into the future.  Mr. Stevens said he believed that Jan Evans, the sponsor of the legislation, felt that would be an important process, and the state should take a snapshot six years and ten years into the future.  She also wanted to make sure that the process avoids producing information that is not utilized.  She felt she did not have all  the answers; she did not know how best it should be utilized or who should utilize it.  The committee was formed so that it could make recommendations to the next legislature as to what process should be utilized, who should be responsible for reviewing the information and utilizing it, and how it should or should not be used in long-range decision-making or in reviewing the biennial budget.  Those were questions the sponsor could not answer, which is why this committee was proposed.  Mr. Stevens said it is up to Task Force members to determine what to recommend to the next legislature in the form of a bill draft.  Maybe the decision will be to do a snapshot of six and ten years and nothing more.  If that is the recommendation, it will be drafted and sent to the next legislature.  It is his belief that Mrs. Evans hoped the committee would determine how the information would be utilized to try to force the debate on what should take place if there is a gap.  Once the information is obtained, it is not useful unless some debate takes place on how to reduce expenditures or how to increase revenues—should revenues be increased, should expenditures be decreased, or should there be a combination and, if so, what percentage?  Mr. Stevens thought Mrs. Evans was not sure of the best method by which to get the debate started, which is the reason the committee was formed.

 

Mr. McNeely asked for clarification with regard to establishing a long-term forecasting mechanism and process by which revenues and expenditures are determined.  He thought this was an entirely different discussion than focusing on how to close the gap.  Mr. Stevens replied he did not believe Mrs. Evans thought the group should decide how the gap should be closed, but it might have some ideas on how to force that discussion.  Should a report be done and no one required to look at it, or should someone be required to look at it, comment on it, and analyze it in some fashion?  He reiterated it was not Mrs. Evans’ intention for the long-range planning group, which will come after this committee, to debate how to close the gap.  She wanted the Task Force to consider whether the debate should take place and, if so, by whom.

 

George Stevens observed that the reason there has not been a debate about long-term forecasts is because they don’t exist.  He feels the debate will  naturally occur once a process is created whereby the forecasts are done on some sort of independent basis.  Right now there is an independent forecast by the Economic Forum for the revenue side, and perhaps something more formal needs to be done on the expenditure side.  Obviously, the Budget Office is doing short-term forecasting—he assumed that no responsible governor would submit a budget that is not based on some rational look at the caseload factors.  Mr. Stevens said those factors can be extended into the future just as the revenue forecasts can be, and he thinks the debate will occur naturally.

 

Mark Stevens replied if that is the decision of the group, he thinks it is a reasonable assumption.  Some people might feel the debate will naturally occur, while others might feel that it should be a more organized process, but that is the decision the group will make in its recommendations for legislation to the next session.  George Stevens added he thought that process would also evolve because there is not an existing formal process on the expenditure side.

 

Mr. Arrighi said that potentially there may be an independent, bipartisan group to look at the forecasts, and the projection numbers could be short-term all the way through the budget process—perhaps not mandated to be used in the budgetary process, but mandated that they be produced, at least on the caseload side as well as the revenue side.

 

Ted Zuend agreed, adding that it could be mandated that a separate body decide the caseload factors for the short-term.  When the agencies submit their budgets to the Budget Office, they are often very high—everyone wants as much money as possible for their programs.  It is not entirely clear at that point if reasonable numbers are being used.  If a caseload analysis were done prior to submission of the budgets, perhaps excessive budget requests could be alleviated.  Once the agencies’ budgets are received by Mr. Comeaux, it is his responsibility to balance the budget—the agencies do not have to balance any budgets, and therefore they ask for anything they want.  If the caseload forecasts were made publicly available, Mr. Zuend continued, the excessive agency requests might be questioned. Clearly, if programs with long-term expenditures are created, then the long-term outlook immediately becomes moot if there is no control on the short-term plan side.

 

Mr. Zuend cited an instance from the 1997 Legislative Session  where caseload growth had been projected, but his review revealed basically no caseload growth.  After meetings with agency representatives, the growth rate was cut back.  However, the growth turned out to be essentially flat, even though the agency had proposed double digit increases.  He feels a process can be developed which would prevent similar situations in the future.

 

Mr. Zuend reviewed his thoughts and ideas concerning uses of long-term projections and the role of the proposed committee:

 

1.   The committee could review the long-term implications of new programs being proposed to the Budget Office.

 

2.   A review could be done before the closing of budgets during the legislative session in order to incorporate new programs proposed by the legislature.  A report of the long-term implications could be submitted to the legislature, which could be utilized or ignored.

 

3.   As noted, fiscal notes do not consider tax increases.  There is currently no vehicle to estimate the long-term effects of tax increases or expenditure decreases.

 

4.   Many states produce a revised long-term forecast after the legislature adjourns in order to consider changes and report the effects.

 

Chairman Arrighi moved to Item 5 on the agenda, Plans and Tasks for Future Meetings, noting that the committee will meet in February, after which it will meet every other month.  Mark Stevens asked what the Fiscal Division staff can do to help the subcommittee move forward.

 

Perry Comeaux commented he has a sense there is confusion on the part of the subcommittee as to what its role is and how far it should go.  He feels that some time needs to be scheduled for a group discussion on ways long-term forecasts can be used by the state and how they will be implemented.  There is a great deal of information on what other states are doing, and today’s discussion involved what Nevada might want to do. Mr. Comeaux suggested that the LCB staff provide the committee with any additional information that might help before the next meeting, and instead of any more presentations, the members just roll  their sleeves up and start talking about the issues and try to come to a consensus.

 

Ted Zuend offered to develop a template from a minimal approach to a maximal approach as to how long-term revenues and expenditure forecasts can be used.  The maximum approach could include various process and decision-making scenarios for the different entities involved, i.e., Budget Office, legislature, etc. 

 

Mr. Arrighi agreed with Perry Comeaux’s observations—he feels something needs to be developed in writing, hopefully with the assistance of the Fiscal Division staff.  So much has been discussed, and it needs to be put in some semblance of order.  He wondered if the staff could prepare something in writing to be sent to the members for review prior to the next meeting so that some thought and discussion can be given to drafting a report of some sort.  The committee can then review and refine the report at subsequent meetings until September, at which time it will have to be wrapped up.

 

Mark Stevens replied staff can put together a document outlining the major decision points, such as timing of when forecasts are due, who will make the expenditure and revenue forecasts, and so on.  Ted Zuend can also put some information together on the minimal versus the maximal use of the information, whether it should be mandated or not mandated, who will use it and who won’t, etc.

 

Ted Zuend said he is not sure it is the subcommittee’s role to decide who will do the forecasts, and  Mark Stevens agreed.  Mr. Zuend said the subcommittee needs to determine how the information will be used within the process.

 

Mr. Arrighi remarked the full Task Force will make the ultimate decisions on everything.  He asked if committee members would like to request any further information before the next meeting.

 

Diane Torry asked if fiscal notes only project the impact through the biennium and if there is a process in place to project over a longer range.  Mark Stevens said an ongoing cost can be estimated, but there are no year-by-year cost projections past the biennium.

 

Ted Zuend clarified that the projections only work when increasing an expenditure or decreasing a tax, but problems can also be created by increasing a tax.  A longer fiscal note might be desirable if there are new proposals from the Budget Office, the agencies, or the legislature, but some kind of threshold would have to be established, e.g., only issues over 1 percent or 2 percent of the state budget should be considered.  He is not sure that the fiscal note process should be extended out for ten years for every fiscal note—it would be very cumbersome.

 

Mr. McNeely said there has been a lot of information obtained in the analysis of other states, and he thinks it would be helpful to have that data put into a comparative table that shows the various components and which are similar and/or different in each of the states.  The information can be used in the discussion portion of the next meeting in determining what Nevada might want to duplicate from other states.

 

Chairman Arrighi agreed, adding there are a lot of alternatives and different ways various states are doing things.  In response to a comment from Mr. Zuend, he emphasized the subcommittee is only concerned with the use side at this point.

 

Ms. Torry asked if there is information available from other states as to how successful and effective their processes have been.  Mr. Zuend said he will ask Russell Guindon to again follow-up with other states, hopefully with more success now that the holidays are over.

 

There being no public testimony, Mr. McNeely moved for adjournment; motion seconded by Bob Olson.   The meeting was adjourned at 2:45 p.m.

 

                                                                       

                                                                                                Respectfully submitted,

 

 

 

                                                                                                Sherie Silva, Secretary

                                                                                                Fiscal Analysis Division

 

 

APPROVED:

 

 

________________________________________

Mark Arrighi, Chairman

Subcommittee on the Use of Long-Term Forecasts

 

Date:____________________________________

 

 

 

 

Exhibits:

  Exhibit A – Agenda

  Exhibit B – Attendance Record