Sandoval looking at county’s demand for return of looted money

By Cy Ryan

Thursday, July 7, 2011 | 11:18 a.m.

Gov. Brian Sandoval will discuss with the Attorney General's Office whether to honor Clark County's demand for the return of $102.5 million taken by the state.

A spokeswoman for Sandoval said the governor's office has received the county's demand letter and that Sandoval will seek the attorney general's office's advice. The letter was addressed to the state Board of Examiners, of which Sandoval is chairman.

The other members of the Board of Examiners are Attorney General Catherine Cortez Masto and Secretary of State Ross Miller.

The money at issue was taken from the county by the 2009 Legislature, which was scrambling to balance the state budget. A recent Nevada Supreme Court decision, however, rule that the state picking and choosing local government coffers to raid is unconstitutional because it treats state residents unequally. The decision prompted Sandoval to reconsider his position on taxes because his proposed budget would have diverted to the state some local funds.

Clark County attorney Mary-Ann Miller said in the demand letter that the county seeks the "return of unconstitutional diversion of local revenue."

Miller initially sent the letter to state Treasurer Kate Marshall, who said she turned the request over to Cortez Masto. But a week later Marshall told Clark County it didn't have the authority to honor the request even though the Attorney General's office never issued an opinion.

Washoe County has also asked for a refund of $21 million taken by the state. By applying the Nevada Supreme Court broadly, some believe the state could owe local governments up to $656.2 million.

When it was issued in May, Sandoval asked Cortez Masto to seek further clarification from the court on how far reaching its ruling should be. But the attorney general refused, saying there was no basis for asking for a re-hearing.