Estate tax fund eyed for college

Jennifer Knight

Monday, April 29, 2002 | 9:18 a.m.

For the third time in a year, university system officials are hoping to make a withdrawal from the state's dwindling reserve of estate tax funds -- this time to cover a budget mistake made last year that shortchanged the Community College of Southern Nevada.

The University and Community College System of Nevada was granted $13 million last year by the Legislature from estate tax funds to keep four of its institutions afloat.

A second request in October -- seeking $700,000 to pay for operations of Nevada State College at Henderson -- was denied.

This third request, which will be heard by the Board of Regents on May 9, would ask for $2 million to $3 million to cover a funding shortfall at CCSN.

Last year CCSN officials discovered a hole in the 2001-2003 biennial budget that limited class offerings and left the institution without some student services.

Early estimates of the shortfall were as high as $7.6 million, but that figure has since been reduced to about $2.5 million, according to Dan Miles, the system's vice chancellor for finance and administration.

Although some regents say the shortfall should be resolved, others are concerned that the estate tax fund could run dry.

"If we keep up at this (rate) there's obviously going to be nothing left," Regent Steve Sisolak said. "It's real easy to go there every time, if that's the intent of it. Is this such a compelling reason to go there? The answer is: I don't know."

The so-called emergency fund earmarked for education is derived from taxes collected upon the death of wealthy estate owners.

But new tax laws passed last year phased out the inheritance tax over 10 years, and Congress now is considering permanently eliminating the tax. That could cause that funding source to dry up in less than two years, Miles said.

Miles said system officials hope to take whatever money remains in the account and create an endowment, so it can be used for future generations.