Audit findings raise questions about tax needs

Erin Neff

Friday, Dec. 13, 2002 | 11:09 a.m.

Several Republicans believe three audits released Wednesday prove that Nevada needs to gain greater fiscal control over state agencies before taxes are raised to erase an $800 million deficit.

The audits of the state Division of Forestry, the Department of Information Technology and the Department of Transportation highlighted examples of sloppy billing, overpaying the federal government and failing to have controls of hundreds of millions of dollars of road projects.

The release bolstered some GOP arguments that the state is awash in the sort of waste that needs to be curtailed before residents, businesses and tourists are asked to pay more in taxes.

"These are the types of things that make you wonder how many millions of dollars like this are out there," said Sen. Ann O'Connell, R-Las Vegas. "You can't look at your constituency and say 'I can justify an increase in taxes.' "

Some said the audits discredit statements made by Gov. Kenny Guinn that a fundamental review of state government has cut down on government misuse of taxpayer money.

"It hurts the governor's credibility when he tells us all the fat is out of government," said Assemblyman Bob Beers, R-Las Vegas. "It's not."

Beers, a member of the Ways and Means Committee, said that any large organization, whether the government or IBM, cannot totally control mishandling of resources.

He said the state needs to cut some of the new programs implemented in the past five to 10 years -- notably the Nevada State College at Henderson and the new dental school.

But the governor's office, still smarting from previously announced dissent in the GOP ranks over Guinn's call for $800 million in new revenue, said the audits show nothing major.

"The audit process is an important part of the oversight the Legislature has over state government," said Greg Bortolin, Guinn's spokesman. "I think that more is being made of the audit reports because of the fiscal state the state of Nevada is in right now.

"But I don't see $800 million here that we can save or cut anywhere."

Bortolin said Guinn is "fairly confident" that once everybody knows the state's needs, "they will come to the same solution, or at least a similar solution to the one he's looking at."

The Nevada Task Force on Tax Policy recommended increasing the state's taxes on cigarettes, liquor and property and imposing new levies on business gross receipts and amusements.

"Everybody's going to come to Carson City in a month and a half and debate what we should do, the audits notwithstanding," Bortolin said.

Senate Minority Leader Dina Titus, D-Las Vegas, pushed for the transportation audit because she said she thought decisions were made in a "capricious" and not systematic way.

But, she said, the results of that audit coupled with the other two should not give anyone false hope of giant inefficiencies.

"The legislative audits always find ways of improving internal controls and procedures," Titus said. "Even if you make those internal changes, the amount of money you save isn't going to plug this big hole we have."

Assembly Majority Leader Barbara Buckley, D-Las Vegas, said she was pleased that legislative auditors found ways to improve state operations and continue to save money.

"It is the Legislature's job to scrutinize the executive branch," Buckley said.

But Buckley said the overall savings identified in the audits "pale in comparison to the budget deficit," and she wonders how anyone can compare what she considers minor savings to projected cuts to the schools.

"We are going to have to find all the cuts we can and we'll still have needs to meet," Buckley said.

She also said she and other Democratic leaders are working on a "radical solution" to save additional money. She declined to discuss what that solution entails, saying that the plan will be ready in a few weeks' time.

O'Connell, who chairs the Senate Government Affairs Committee, said the audits break her heart as someone who clips coupons and lives on a fixed income.

She also said she believes there are state programs deserving of additional revenue, namely mental health services and grandparent foster programs. She said the inefficiencies outlined by auditors show room to move money around.

"If we can be much more efficient in many areas, we can redirect money to the programs that need it," O'Connell said.

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, said the audits do bolster arguments he has been making about the state's finances.

"Clearly overpaying bills and underwriting bills is money that would come back to us for other uses," Hettrick said.

The audit of the Forestry Division highlighted $617,000 in overpayments to the federal government for help the state received fighting range fires in Nevada. That same audit showed the division failed to bill the federal government $319,000 for its aid battling fires on federal land in Nevada.

The transportation audit determined there is no way to determine if projects selected for hundreds of millions of dollars in state money are worthy.

The information technology audit found the department paid employees overtime when they never showed up for the job. It also determined the department overbilled some state agencies by $5.3 million and underbilled others $4.6 million.

"More important than the couple hundred thousand dollar difference is that somewhere out there two or more other agencies have a budget wrong because they've been billed wrong by IT," Hettrick said. "It shows that we still have to come up with ways to be more efficient."