Budget issue prompts bond delay

Thursday, June 19, 2003 | 9:57 a.m.

CARSON CITY -- State Treasurer Brian Krolicki said today that the sale of $200 million in state bonds for items such as parks and cultural resource will be delayed indefinitely due to the state's uncertain financial situation.

"Without the state budget being clarified at this point, I believe it would be highly imprudent to proceed with the sale of these bonds," Krolicki said.

The Legislature is expected to address budgetary concerns in its second special session that starts Wednesday.

Of the $200 million, $92.5 million would go to finance open spaces, parks and cultural resources. The other bonds were being sold to refinance previous bonds that were issued at a higher interest rate, Krolicki said.

Krolicki said he did go forward with the sale of nearly $180 million in transportation bonds to use for such projects as road work on U.S. 95 in Las Vegas and other highways in Carson City and Reno.

He said the 10-year bonds sold for a "historically low" interest rate of 2.7 percent.

The sale of the transportation bonds could go forward because the revenue to pay off the debt is pledged by gas taxes and federal government reimbursement programs and not other state general fund money, he said.

Krolicki said after he talked with rating agencies about the sale of the $200 million in general obligation bonds, he determined it was "not fiscally sound to proceed" with the sale.

The deadlock over taxes and the state budget also held up passage of a bill to funnel $1.6 billion into local school districts over the next two years.

Meanwhile, the state can't dispense $3.3 million in remediation funds to schools in need of improvement. Doug Thunder, chief financial officer for the state Department of Education, said Wednesday that money is included in the bill that is sitting in the Legislature.

The state Board of Examiners is scheduled to meet Friday to release that money. But Thunder said there is no money to distribute.

There are 43 schools in the state that qualified for this extra money because their test scores were below national averages. Thirty of these schools are in Clark County.

In the Legislature's first special session, the Senate passed the Distributive School Fund bill to release the money to the school districts. But it never got out of the Assembly. Democrats in the Assembly want to tie it to any tax plan. They say they have a legal opinion that they can't pass the school aid bill first because that would result in an unbalanced budget, which is against the law.

Republican assemblymen counter that the school aid bill can be approved because education takes priority in allocations from the state. And there is enough money in the general fund to send to the public schools and still keep the state running for a few months, they contend.