New effort afoot to eliminate state controller’s office

Tuesday, Nov. 16, 2004 | 9:40 a.m.

CARSON CITY -- As the state Controller Kathy Augustine tries to fight off removal from office, there is a renewed effort within the Legislature to abolish her office.

Even before Augustine was disciplined by the state Ethics Commission, an unidentified legislator had asked for a bill to be drafted to combine the controller and the treasurer's office.

There have been periodic attempts since 1995 to eliminate the office and switch the duties to the treasurer. In 2003 a resolution was introduced by the Assembly Ways and Means Committee to amend the Constitution to abolish the controller's office Assemblyman Morse Arberry, D-Las Vegas, the chairman of the committee, said it would have saved $500,000 to $1 million.

But the bill never made it out of committee after some GOP lawmakers objected to the proposal.

Sen. Dean Rhoads, R-Tuscarora, introduced the resolution twice in the past to combine the two offices with the treasurer surviving. Both times, the legislation never made it. He said he did not request the bill this time because of the impeachment proceedings.

But Assemblyman Bob Seale, R-Henderson, former state treasurer, said he would have introduced a bill this session to combine the offices if someone else had not beat him to it. He said he will be throwing his efforts into supporting that bill.

On June 25, an lawmaker who chose to remain anonymous requested the bill to combine the offices. Augustine on June 30 revealed that she was under investigation by the attorney general's office. On Sept. 22, she agreed to pay a $15,000 fine, admitting she should have known that her staff was working on campaign materials.

Augustine says she voted against combining the offices in 1997 when she was in the Senate, and she has opposed the efforts since. She said the office serves as one of state government's checks and balances.

No one official should control all of the financial dealings of the state, she said Monday.

"You can't give one person too much power over taxpayer dollars," she said.

The check writing needs to be separate from the investments, she said. And this has been an elected office since the state was created.

"This takes away the vote of the people," Augustine said. "The present system reduces the chances of mishandling."

Seale called Augustine's argument "specious." Big corporations have only one financial officer, he said.

Even if she survives the impeachment, Augustine's term would end in 2006. A constitutional amendment bars her from a third term. Before it could take effect, the proposal to scrap the office would have to be approved by the 2005 and 2007 Legislatures and then ratified by the voters in 2008.

Seale said he hasn't arrived at the final plan. But he said it could call for creating the office of state financial officer combining both the duties of the treasurer and the controller. Or it could recommend the creation of a financial officer, with qualifications, to be placed under the treasurer.

"I don't think there will be any problem getting it out of the Assembly," said Seale. He said he has already talked to lawmakers about it.

Rhoads introduced a resolution in 1999 to abolish the office, saying that eight positions could be eliminated and new technology could provide a set of internal controls of checks and balances. Carole Vilardo, executive director of the Nevada Taxpayers Association, supported the combination.

Rhoads' bill passed the Senate 14-7, but it died in the Assembly Committee on Constitutional Amendments.

Augustine, who earns $80,000 a year, doubts there would be any savings by combining the two offices. She said there is no duplication of duties between them.

The controller's office processes claims against the state, and the treasurer pays them. Both must sign the check. Augustine has also set up a debt collection program to get those who owe the state money to pay up.

In Texas, the two offices were combined with the controller's office surviving, she said. And the same thing happened in Florida.

Augustine was impeached by the Assembly for misusing her office and is now suspended but still drawing her pay. The Senate returns Nov. 29 to start the trial proceedings.

She said she's eager to be able to present her challenge to the allegations. Her lawyers will have a chance in the Senate to cross-examine witnesses and make arguments as to why she should not be convicted.