University system asks state to guarantee estate tax revenue

University of Nevada officials Wednesday asked lawmakers to guarantee whatever estate tax revenue they build into the budget so that they don't have to cut programs if the money falls short.

Vice Chancellor for Finance Dan Miles told a subcommittee of the Senate Finance and Assembly Ways and Means committees that about $90 million in estate tax revenue is built into Gov. Kenny Guinn's proposed budget, most of it in ongoing programs.

"The trouble is, there's really no way to forecast estate tax," he said.

He said, over the past decade, estate tax revenue has ranged from $2.5 million to $41 million a year. He reminded lawmakers that the amount of estate tax revenue the university gets depends completely on how wealthy the residents are who die in any given year.

He said that is a real problem for the programs funded through estate taxes -- including 275 full-time positions.

"If the estate tax revenues come up short, we don't have a fall back," Miles said.

His solution, he told lawmakers, is to have them budget the amount now supported by the estate tax from the general fund and then collect the estate taxes at the state level to cover that cost. That way, if estate tax revenues don't materialize, the university system still gets its money through the general fund appropriation.

"Your proposal is to shift the risk to the state," said Senate Finance Chairman Bill Raggio, R-Reno.

"Yes," said Miles. "It's a way to protect UCCSN from a shortfall."

He said it would prevent the campuses from suddenly finding that they must drastically cut or eliminate a program part-way through a semester.

Miles pointed out that kindergarten through 12th-grade education, which gets the other half of estate tax money, is protected from unexpected declines in revenue by a state law requiring the general fund to make up any losses below the budgeted amounts.

He also said the state will have to assume the costs of programs now covered by estate tax revenue over the next four years as the federal law reducing and then eliminating it takes effect.