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October 30, 2014

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Damon Political Report

State could face a $1.1 billion liability in wake of Nevada Supreme Court ruling on local government funds

An independent analysis of the budget hole created by this week’s Nevada Supreme Court ruling indicates the problem may be almost twice what Gov. Brian Sandoval’s administration has estimated, when taking into account decisions made for the current biennium's spending plan.

The ruling, which prevents the state from taking local or special tax dollars for its general fund, calls into question a number of revenue-raising measures the Legislature has taken since 2009.

Sandoval has estimated the ruling blows a $656 million hole in his proposed budget for the next biennium that begins July 1. But the analysis done for a lobbying group with a variety of private clients indicates the number could be as high as $1.14 billion, including $452 million in the current biennium and $685 million in the proposed budget.

The analysis includes six local fund grabs by the Legislature in the 2009 session and 2010 special session:

-$188 million in room tax revenue.

-$68 million from Clark and Washoe counties property tax revenue.

-$60 million grab of capital funds from Clark and Washoe counties.

-$48 million from the counties’ indigent accident funds.

-$25 million from the Clark County School District capital funds.

-$62 million from the Clean Water Coalition—the entity that filed the lawsuit to begin with.

Money at stake in Sandoval’s proposed budget includes:

-$221 million in room tax revenue.

-$38 million from the indigent accident funds.

-$425 million from the school districts’ debt reserves (a number that has actually shrunk to $225 million).

The private analysis did not take into consideration the $83 million in property tax revenue Sandoval wants to take from Clark and Washoe counties-- a funding mechanism that Sandoval is including in his own review of questionable money.

Legislative leaders said they aren’t focused on the $452 million from the 2009 budget, largely because Clark and Washoe counties haven’t filed suit. But they don’t want to put the proposed budget at risk.

“Those decisions have already been made,” Senate Majority Leader Steven Horsford, D-North Las Vegas, said of the 2009 budget. “The focus now is on a going forward basis.”

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  1. Time for Sandoval to finally act like a governor instead of a Republican. Time to represent the taxpayers instead of the corporations. Call your legislator today-they are working all weekend-at 1-800-978-2878 and tell them to eliminate the tax breaks for foreign mining corporations paid for by the taxes from Nevada's working families. Time for the working people of this state to get a break instead of people from Canada and Europe.

  2. Time to make southern Nevada "South Nevada."

  3. Below is what the whole of Article 4, Section 20 of the Nevada Constitution says. None of it says that the state cannot keep the entirety of state sales taxes or any other taxes levied and collected by the state. In fact, it says nothing forbidding the state from recalling to Carson City real estate taxes authorized by the Legislature and collected by the counties and cities. This is a general law (not home rule) state and the counties are mere branches of the state government. Idiot non-lawyers have to read the first sentences of Section 20, not just the enumerated list beneath it. What Section 20 is talking about is passage of laws which would be in effect in ONLY in certain counties like Clark County or cities like Reno:

    Section 20. Certain local and special laws prohibited. The legislature shall not pass local or special laws in any of the following enumerated cases--that is to say:

    Regulating the jurisdiction and duties of justices of the peace and of constables, and fixing their compensation;

    For the punishment of crimes and misdemeanors;

    Regulating the practice of courts of justice;

    Providing for changing the venue in civil and criminal cases;

    Granting divorces;

    Changing the names of persons;

    Vacating roads, town plots, streets, alleys, and public squares;

    Summoning and impaneling grand and petit juries, and providing for their compensation;

    Regulating county and township business;

    Regulating the election of county and township officers;

    For the assessment and collection of taxes for state, county, and township purposes;

    Providing for opening and conducting elections of state, county, or township officers, and designating the places of voting;

    Providing for the sale of real estate belonging to minors or other persons laboring under legal disabilities;

    Giving effect to invalid deeds, wills, or other instruments;

    Refunding money paid into the state treasury, or into the treasury of any county;

    Releasing the indebtedness, liability, or obligation of any corporation, association, or person to the state, or to any county, town, or city of this state; but nothing in this section shall be construed to deny or restrict the power of the legislature to establish and regulate the compensation and fees of county officers, to authorize and empower the boards of county commissioners of the various counties of the state to establish and regulate the compensation and fees of township officers in their respective counties, to establish and regulate the rates of freight, passage, toll, and charges of railroads, tollroads, ditch, flume, and tunnel companies incorporated under the laws of this state or doing business therein.

    I especially like the last part where the Legislature can pass laws cutting the compensation of county officers.

  4. What is this, a tax buffet?

    Pick and choose willy nilly which revenues will fund the budget hole?

    Will it be fair to all?

    Clark and Washoe Counties should NOT be paying the whole budget bill of the state.

    Again, MINING TAX STRUCTURE REFORM needs to be a part of the negotiations.