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July 29, 2014

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Lawmakers eye county dough

They’re likely to raid property taxes to help fill budget hole

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cathleen allison / nevada appeal file

Nevada lawmakers, from left, Senate Majority Leader Steven Horsford, Assembly Speaker Barbara Buckley, both D-Las Vegas, Assembly Minority Leader Heidi Gansert and Senate Minority Leader Bill Raggio, have all said the state’s economic crisis is worse than expected.

As recently as February legislators panned Gov. Jim Gibbons’ proposal to balance the state budget by taking property tax money from Clark and Washoe counties. The idea was evidence of an ill-considered and hastily assembled spending plan, they said.

Now it appears the same lawmakers who criticized the proposal will approve a bill to carry out Gibbons’ plan to take the county funding.

“It’s not over yet, but we’re probably going to include it,” said Assemblywoman Sheila Leslie, D-Reno, and a top lieutenant of Speaker Barbara Buckley, D-Las Vegas.

“Given the current budget situation, I don’t think there’s any way to avoid it,” said Assembly Minority Leader Heidi Gansert, R-Reno.

Assembly Bill 543, introduced this week, would take about $64 million in property tax revenue away from Clark County and $12 million from Washoe County over the next two years, according to Jeff Fontaine, executive director of the Nevada Association of Counties.

“Everything is on the table,” said Senate Majority Leader Steven Horsford, D-Las Vegas. “We’re talking with county representatives about other options we could give them.”

That the idea remains alive speaks to the dire financial situation lawmakers confront as they debate the budget. Proposals in the governor’s budget once called unpalatable — pay cuts for state workers, further cuts in K-12 education funding — remain in play.

The shortfall to fund state government at levels approved by the 2007 Legislature is $2.8 billion, according to the Gibbons administration. That number is likely to grow after a meeting Friday of the state’s Economic Forum, which sets the revenue forecasts that elected officials must abide by in approving a budget.

In committee hearings, legislators from both parties have bludgeoned the governor’s budget — and his staff — over the way Gibbons balanced the budget through a combination of large cuts, a room tax increase and taking money from county governments.

Legislators have voted to restore some of the cuts. But each of the governor’s cuts they undo requires that they raise additional revenue or make cuts elsewhere. Taking the money from counties limits the additional cuts and tax increases.

“We’re desperate,” Leslie said. “The gap is already huge.”

The proposal has Clark County and its lobbyists sweating.

Fontaine, with the Nevada Association of Counties, said the state is going after county revenue in other ways. Lawmakers want to take $56 million from the fund for indigent patients used to reimburse county hospitals for treating the uninsured. They are also looking to take another $11 million for “administrative costs” to collect the sales tax.

Clark County Manager Virginia Valentine said the county doesn’t have a plan to make up for lost property tax revenue should lawmakers include it in the budget.

She said the county is facing a $56 million shortfall. “If the state takes additional revenues from the county, we will be forced to cut services and the personnel associated with those services,” she said.

One possible option for the counties is, for now, no longer available. Sen. Terry Care, D-Las Vegas, had a bill this session that would have given counties the power to raise taxes.

The bill died, but legislative sources said the proposal could be resurrected.

Sun reporter Joe Schoenmann contributed to this story.

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