Bush aims to redirect Nevada money

Benjamin Grove

Wednesday, Feb. 2, 2005 | 11:12 a.m.

WASHINGTON -- Facing a soaring federal deficit, President Bush aims to funnel to the federal treasury profit generated by federal land sales in Clark County -- money currently set aside for projects in Nevada.

Bush's proposed budget, set for release next week, recommends that Congress make the change this year.

But Nevada lawmakers are vowing to kill the proposal. Sen. John Ensign, R-Nev., said he spoke with White House Office of Management and Budget director Joshua Bolten on Friday and with Interior Secretary Gale Norton on Tuesday.

"I let them know in no uncertain terms that myself and Sen. Reid were going to do everything we could to make sure this never sees the light of day," Ensign said.

Senate Minority Leader Harry Reid, D-Nev., called the plan "outrageous" and said he expects that Congress would not approve it.

"The Bush administration on one hand is working with zeal to dump nuclear waste in our state, and now wants to steal $1 billion away from us," Reid said in a written statement.

At issue is money generated by the Southern Nevada Land Management Act passed by Congress in 1998, which created an organized plan in which federal lands in Clark County were to be sold with the profit to be spent in Nevada. The act was designed to create a comprehensive strategy in which public land could be sold for possible development in the fast-growing county while also protecting environmentally sensitive areas.

Under the law, 5 percent of the proceeds are diverted to Nevada school accounts and 10 percent go to water and airport infrastructure projects. The remaining 85 percent is deposited in an account to acquire other environmentally sensitive land in Nevada; develop a multi-species habitat plan; develop parks and trails; and use for other conservation initiatives.

Bush's proposed budget recommends funneling 70 percent of land sale revenue to the federal treasury, while allowing Nevada to keep 15 percent for the sensitive land buys and other projects. The state would keep the 10 percent for water and airport projects and the remaining 5 percent for schools.

Roughly $1.3 billion has been raised in the sale of about 8,100 acres at 18 auctions, according to the Bureau of Land Management. An auction today offered another 60 parcels, nearly 2,300 acres, with a fair market value of about $369 million.

The lands act has generated nearly eight times more money than Congress anticipated, according to the Bush budget document, obtained by the Sun. Land sales were expected to generate roughly $70 million each year, but future revenue is expected to exceed $1 billion per year, according to the document.

Sale profit was $530.5 million in 2004 and estimated at $1.2 billion in 2005, the Bush budget says.

The extra money is more than Nevada can spend under the rules of the law, the budget document says.

"These funds are increasingly being dedicated to local projects -- and many more projects than originally anticipated are being formulated without the accountability of further consideration by the Congress," the budget document says.

But Nevada lawmakers said the money should remain in Nevada where they said there are plenty of legitimate needs for the money.

They argue that the land management act was designed to boost state revenue in a state largely owned by the federal government. That federal ownership deprives the state of tax proceeds from those lands.

Bush's proposal is a "slap in our face," after Nevada's electoral votes helped him win re-election, Rep. Shelley Berkley, D-Nev., said. The president is looking in the wrong place for new sources of federal revenue in an effort to trim the deficit, she said.

"These tax cuts are killing us, we're swimming in red ink, and they're desperate to look for new revenue sources," Berkley said. She added a message for Bush: "Keep your hands out of the state of Nevada."

Rep. Jon Porter, R-Nev., plans to fight the Bush proposal as it makes its way through Congress this year, spokesman Adam Mayberry said. "It's important to remember that this is a long way from becoming law," Mayberry said.

Rep. Jim Gibbons, R-Nev., released a statement today saying, "While I applaud efforts to lower our deficit, I will fight this proposal to keep these dollars in Nevada to address the needs of our growing communities and citizens."

Nevada lawmakers have discussed new ways to spend the abundant land sale profit -- in Nevada. For example, Gibbons has recommended a plan to increase the amount of money diverted to schools.

Ensign has proposed spending about $200 million of the land sales money on a turf-buying program in which public agencies and schools would be paid to rip out grass to conserve water.

In an October statement, Ensign noted that other states were envious of how much money was available for Nevada parks and trails under the lands act. "The Bush administration has helped make this legislation far more successful than I ever imagined," Ensign said in October.

It's not clear exactly where inside the Bush administration the proposal was made or how it was developed.

A spokesman for the White House's Office of Management and Budget was unavailable today. A Bureau of Land Management spokeswoman today said BLM officials could not comment.