By Ron Knecht and Geoffrey Lawrence
Recently, we’ve discussed overall state spending and revenues, and in coming weeks we’ll review the spending and performance in major areas such as education and health and social services. So, it’s timely and appropriate to answer the question: How has the controller’s office done at managing its own spending and delivering services to Nevadans?
In our first full fiscal year (FY16), we cut spending from levels authorized by the legislature and governor based on the request of the previous controller by over 13 percent – while improving services. It’s possible we’ll need a supplemental appropriation in the current fiscal year to complete work originally scheduled for FY16 but not finished then, but the net first-year savings will still exceed ten percent.
When we started our tenure two years ago, the previous controller had left us a deficit exceeding $30,000 for the first half of that fiscal year. In the second half of that year, we erased that deficit and left a surplus of $102,000 – equal to the controller’s salary. Over the first two years of our tenure, the controller’s office has returned over $1,000,000 to the state treasury, helping to hold down your taxes and fees.
Turning to our budget request for the next biennium, the long-term (2005-2018) rate of growth of controller’s office spending has been only 2.6 percent per year, which is lower than the very low growth rate of Nevada’s economy. That is, we have reduced the burden our office imposes on Nevada families and businesses. Thus, we meet the standard we have proposed for government at all levels in order to resuscitate our economy.
Our spending has grown much slower than that of many other departments and agencies. Due to deferred expenses in previous years, one-time catch-up items requested by the former controller increased FY16 spending (which we reduced), but actual FY17 spending and our proposed FY18 and FY19 spending levels have significantly brought down the long-term trend.
Further, we inherited a $1,000,000-plus potential contractual liability from the previous controller, but to date not a cent has been paid on that contract, as we rigorously held the contractor to the terms of the agreement. Now that two amendments to that contract have been adopted by the parties, we are hopeful the contractor can complete the work timely and satisfactorily. If so, the information technology being developed under that contract will generate new revenues for the state while compensating the contractor in proportion to the benefits its product delivers to the state.
In the first week of Ron’s tenure, he requested an extensive and thorough audit of the office’s operations by the executive branch auditors. That audit proposed moving the state’s residual debt collection operations to the governor’s office because it has power to enforce collections measures the controller’s office does not have. Instead of jealously protecting our turf like many bureaucrats do, we agreed with the auditors’ recommendations and worked with the director of finance to effect the move. It’s now part of the governor’s budget recommendation.
While cutting spending, we have improved services in numerous ways. During the 2014 election campaign, Ron said he’d put the state checkbook up on line so all citizens can have convenient access to the facts and numbers. To do this, we needed a new business information system, and it is well into development and will be completed this year. The controller’s office will provide public demonstrations of this system this spring.
In the meantime, we created a kiosk at our office at which citizens can access extensive state financial information (including taking copies of files with them) already at no cost to users. When the full system is completed, citizens will be able to access many kinds of information, including state employee compensation levels.
Further, as Ron promised in the election campaign and as state law provides, we created an award-winning Popular Annual Financial Report that details state spending, revenues, issues, operations, problems and solutions, plus the economic outlook and policy recommendations.
With a very good staff, led by James Smack and our managers, we have improved ongoing operations. Finally, we proposed five bills for the coming legislative session to remedy a number of problems large and small.
Ron Knecht is Nevada Controller. Geoffrey Lawrence is Assistant Controller.