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November 29, 2014

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Gibbons asks feds for stimulus education waiver

Without waiver, state would need to restore higher education funds to 2006 levels

Gov. Jim Gibbons has asked the federal government to waive the requirement that Nevada restore hundreds of millions of dollars in proposed cuts to higher education in order to qualify for a portion of the economic stimulus.

To get $396 million for K-12 and higher education, the American Recovery and Reinvestment Act of 2009 requires the state spend as much on K-12 and higher education as it did in 2006.

Under Gibbons' budget, K-12 met that requirement. But the state would have to restore $268 million in cuts to higher education, money that Gibbons' staff said the state doesn't have.

The request for the waiver, which administration officials believe to be the first by a state, was sent to Department of Education Secretary Arne Duncan on Wednesday.

The rules on the waiver are unclear, and the letter requesting the waiver touches on a broad scope of areas. It says Nevada needs quick action because Nevada holds 120-day legislative sessions every other year. It also points to the state's high foreclosure and unemployment rates.

Gibbons said in a brief media availability on Wednesday that Nevada wanted to be first in line if a waiver is granted.

He also criticized the stimulus as a "usurptation" by the federal government of the state's authority.

Assembly Democrats said they supported the request for the waiver because it could give the state more flexibility.

When the economic stimulus was first passed, both the governor's office and legislators thought the stimulus would free up enough money from other areas, so that many of the proposed cuts to higher education could be restored and the state could meet federal spending requirements.

Budget Director Andrew Clinger said the economic stimulus had freed up $254 million from other areas, which would be almost enough to restore the higher education cuts to 2006 levels.

But that money now looks like it won't be available. The governor's office has identified about a $100 million shortfall in the budget it submitted. That includes a $61 million hit because of a lower projection of how much money the room tax will take in and a $31 million hit when the governor decided to take out a requirement that casinos pay tax on markers they issue up-front.

Additionally, budget officials are preparing for new downward projections when the Economic Forum meets on May 1.

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