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August 22, 2014

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Sandoval adviser: Court ruling blows hole in budget 10 times larger than expected

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Justin M. Bowen

Gov. Brian Sandoval addresses the Las Vegas Chamber of Commerce Wednesday, January 26, 2011 at a luncheon held at the Four Seasons Hotel in Las Vegas.

Sun Coverage

A ruling Thursday by the Nevada Supreme Court opened a $656 million hole in Gov. Brian Sandoval’s proposed budget, a problem roughly 10 times what had been originally anticipated, according to new figures from his administration.

In a late-night press conference, Sandoval’s senior adviser, Dale Erquiaga, announced the new figures after the governor’s legal counsel advised interpreting the ruling broadly.

“The magnitude of the problem is much larger than anticipated,” Erquiaga said. “It’s roughly 10 times worse than some people originally thought.”

The court’s decision centered on a dispute over whether the state could take $62 million in user fees from the Clark County Clean Water Coalition for a scuttled water project.

The precedent-setting decision, however, applies to many of the local money grabs Sandoval had relied on to help him avoid raising taxes.

In addition to the $62 million from the Clean Water Coaltion, Sandoval now must find a way to replace the following revenue sources:

• $38 million from counties’ indigent accident and medical assistance funds.

• $247 million from the school districts’ debt reserve funds.

• $83.4 million in property tax diversions from Clark and Washoe counties.

• $225 million from a room tax increase earmarked for education funding.

Democrats had already rejected several of Sandoval’s funding mechanisms, finding ways to avoid the debt reserve, property tax and room tax grabs. That alternative relies on extending 2009 tax increases set to expire.

Removing the sunset on those taxes would net the state $712 million.

“We won’t speculate tonight what the solutions are,” Erquiaga said. “The problem is much worse than we thought. We’ll begin working on solution.”

Sources close to the governor said he does not have the appetite to cut $656 million from the already beleaguered state budget and he’ll likely support extending the 2009 tax increase.

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  1. Call your legislator at 1-800-978-2878 and demand that the tax breaks for foreign mining corporations, which are paid for by taxes paid by and reduced salaries of Nevada's working families be ENDED in order to close the state budget deficit. Its time for the foreign mining corporations to pay their fair share and stop taking tax welfare paid for by working Nevadans.

  2. If the Barrack numbers on their own profit from Cortez Hills are right, Nevada should have received 5% of that $1.5 Billion, or $75 Million. What did Barrack pay?

  3. Good - so now the revenue most come from the correct places and not stolen from all of the local governments.

  4. The governor's budget never was balanced. In fact, without additional revenue there can't be a balanced solution, either.
    This is clearly not a time for $700 million in tax breaks.
    The balanced solution would be to extend the sunsets and begin finding real answers to the practical problem the court's ruling has created for future sessions. The governor and Legislature can no longer steal from others to avoid making tough decisions. So, fix it now!

  5. "The court's decision centered on a dispute over whether the state could take $62 million in user fees from the Clark County Clean Water Coalition for a scuttled water project."

    This must have been a no-brainer for the court. A lot of users were charged those fees for a project that never was. By all that's right those unused fees belong to them and should be refunded with interest, minus legitimate expenses. Whether or not the state would have any right to take those funds is the difference between what's legal and what's right -- often two entirely different things. In a nutshell, the court stopped the state from doing what government often engages in -- legal plunder.

    Class dismissed.

    "[The law] has placed the collective force in the service of those who wish to traffic, without risk, and without scruple, in the persons, the liberty, and the property of others; it has converted plunder into a right, that it may protect it, and lawful defense into a crime, that it may punish it." -- Frederic Bastiat, 1850 "The Law"

  6. Governor Sunnyville's budget was always a smoke and mirrors game, fooling only those "conservatives" who preach fiscal responsibility but have no understanding of basic principles of accounting. Once you take away the irresponsible practices of robbing Peter to pay Paul, depleting caputal reserve funds (thereby ruining future bond ratings) and borrowing against future tax liabilities (which should be the next thing to go), the Governor's budget is exposed as more irresponsible than any homeowner who bought into the substandard mortgage sales pitch.

    This is why the intelligent voices in the room have been screaming since January that a complete revenue overhaul, that doesn't depend on regressive taxes and fees (i.e., look to mining and large corporations), is mandatory.

    Wouldn't "conservatives" be the first to chastise a family who took out additional credit cards to cover their household shortfall? That's what Bri-Bri has proposed all along, and the ignorant FELL FOR IT. He is, and always has been, a fraud.

  7. Mr. Sandoval's plan from the start was to shift responsibility for services to the counties and rob them of their reserves. That is why he would never release a "plan" when he was running for office. He kept his mouth shut and the voters fell for it.

    He never had a real plan that would balance the budget or save this state. He was going to rob Peter to pay Paul and let the counties look like the bad guy.

    Glad the courts saw this game for what it is and put a stop to it.

    Now the businesses that are paying the $700 Million in taxes are stepping up and telling him to keep taxing them, they want to pay their share to help fix the problems. He is "thinking" about it. What is to think about, they are willing to pay and he needs the funding to help the state. If he does not do this then he is just pulling the plug on the State of Nevada and all that live here.

  8. Let's face it -- Nevadans elected a moron, again.

    Sandoval is an empty suit, spouting cliches and half-truths, while guarding the pocketbooks of the corporations and the rich.

  9. GREAT POST, Sherri Grotheer!
    Right on the M O N E Y!

    Nevada's "Monkey with an Abacus", Governor B.S.,
    and his "Ocean's 14" plan to steal every nickel from every budget he could identify with a positive balance and CLAIM IT AS HIS OWN, has predictably BLOWN UP in his face...but he's STILL SMILIN'!

    The first time I heard B.S. lay the B.S. on us in the State of the State, that ALL TAX MONIES COLLECTED would/could be usurped into the General Fund to be used in HIS budget at HIS discretion, because TAXPAYERS do not DIFFERENTIATE between piles of tax cash; I thought, "Is he MAD? You can't DO THAT! Those are DEDICATED FUNDS!"

    The man had to have known...
    Leading one to this question;
    Has THIS been the REAL "PLAN" all along???
    "I won't 'raise taxes'...hehe, hehe...I will come out of this smelling like a Rose TeaBag...hehe...hehe..."

  10. I was against the taxes before I was for them, I mean before the courts were against them, I mean no news taxes, taxes on newspapers, I mean waxes, I was not going to get my back waxed at taxpayer expense. That is what I meant.

    Could someone do a photo shop of Sandoval with the clown nose treatment, like the NY Daily News did with Trump.

  11. omg court ruling? I took government accounting-first rule govt sets up funds (school, transportation, highway, etc) those funds cannot be interchanged or used for anything other than what they are designated for. so the education in this state is so great that the governor does not basic govt accounting awesome