Democrats say Sandoval budget has $325 million hole

By David McGrath Schwartz

Thursday, Feb. 24, 2011 | 6:34 p.m.

Democratic lawmakers opened a $325 million hole in Gov. Brian Sandoval’s budget today, leverage they will try to use to make it more difficult for the Republican governor and his unified caucuses to stand by their pledge not to raise taxes.

Sandoval’s administration will have to submit either another round of cuts or more budget adjustments, according to Assembly Ways and Means Chairwoman Debbie Smith, D-Sparks, and Senate Majority Leader Steven Horsford, D-North Las Vegas.

“It’s not a balanced budget,” Horsford said. “We need (the amendment) yesterday.”

Sandoval Chief of Staff Heidi Gansert said in a statement, "As new information becomes available, we expect numerous revisions to the budget.”

Governors in Nevada submit two-year budgets to the Legislature, which typically makes adjustments to that budget. Inevitably, there are changes as officials re-project tax revenues and how many people will use a service. Sandoval's budget did not raise taxes. But it used about $1 billion in budget gimmicks and reallocating money from other sources to balance the budget.

This “revision” will be particularly large. Horsford said the lack of this money would increase the cut to education by 7.5 percent.

At issue is what Clark County School District officials told Sandoval’s administration before he released his budget late last month. Administration officials said that the school district represented that it would have to refinance its capital construction bonds regardless of what the state did, because revenue from different tax sources was going down.

School district officials say they never gave the governor’s office that representation.

“Our recollections of this are different,” testified Jeff Weiler, chief financial officer for Clark County schools, to a joint meeting of the Assembly and Senate money committees.

Now, if Sandoval takes the $300 million he proposed, “we will either have to raise taxes or refinance the mortgage, if you will, costing taxpayers in the long-term,” said Carolyn Edwards, president of the Clark County School District Board of Trustees.

Sandoval’s staff released an accounting of how the district has been spending its money, raised through a 1998 ballot initiative on school construction.

Spending in the 2010 capital funds budget was $275 million, almost half what it was the year before when district was still building schools to keep up with a growing population. But in 2011, the district approved spending $422 million on capital projects.

Much of that is for building improvements, including computer and Internet network upgrades. But it also includes $74 million in land acquisitions; $41 million for a new northwest Las Vegas bus site; and $15 million for new furniture and equipment.