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November 27, 2014

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Deal calls for state to pay $50M to resolve ‘money grab’ dispute with Clark County

The state of Nevada will repay Clark County about $50 million, pending approval of a county-state agreement, to resolve a dispute over the Legislature's so-called "money grab" from the county in 2009.

The $50 million, about half the amount that county officials contend the county is owed, would not come as a cash payment, sources said. Rather, the state would provide $30-$35 million for improvements to the airport interchange at Interstate 215 and would alter a formula that dictates how the county contributes to the state Medicaid program, a $20 million savings for the county.

Still to be signed, the deal would represent a sea change from just a few months ago when county officials offered to take even less than $50 million, even though they believe the county is owed $102.5 million. When that deal was rebuffed, however, the county sued.

Earlier this year, county officials looking to get something back from the state said they would have taken even $25 million paid in $5 million increments over five years.

When that failed to gain approval from the governor’s office, the county sued in June. Two weeks ago, however, sources said county and state officials came to agreement. Now, all that remains is for the two sides to sign the deal.

County Manager Don Burnette would not talk about specifics of the potential deal, but said “we’ve had lots of progress and are encouraged about the state of negotiations.”

Clark County officials claimed the state lawmakers diverted about $102.5 million to the state in 2009 by taking portions of the county’s property taxes and other revenue over a two-year period.

County officials groused about the “taking,” but didn’t do anything until after a 2011 decision by the Nevada Supreme Court in relation to another lawsuit against the state, this one filed by the now-defunct Clean Water Coalition.

The CWC, as it was known, had banked $62 million over several years to be used to help fund an $860 million return-flow pipeline into Lake Mead. When the multijurisdictional CWC lost support for the project and all but dissolved in 2009, state officials looking to balance their budget took that $62 million for themselves.

In the summer of 2011, however, Nevada’s Supreme Court said the state had no right to create special laws for the collection of taxes,; had the state taken money from all 17 of Nevada’s counties, it might have gotten away with it.

In turn, that forced Clark County to take another look at the state’s 2009 money grab: the state only took from Clark and Washoe counties. The county believed it could make the same legal argument — that the state singled out Clark and Washoe counties — and force the state to return the money it took in 2009. In June 2011, Commissioner Steve Sisolak made a formal request for a refund from the state.

To avoid a court fight, Clark County and state officials began negotiating in late-2011. When no deal had been made by mid-2012, Clark County filed a lawsuit claiming the state owed it about $100 million.

Sisolak said he couldn’t wait for the agreement to be finalized.

“It will give the Legislature a chance to move forward with its budget and gives the county a sense of where we’re at with our own budget,” he said. “(The interchange) is definitely needed to reduce congestion at the airport and will create needed jobs.

“It just goes to show that when people want to work together, you can avoid litigation and come to a resolution that helps everyone involved.”

Michael Wilden, director of the Nevada Department of Health & Human Services, which will be affected by a portion of the agreement, turned down a request to comment.

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  1. This shows that crime does pay.

    The state illegally took $100 Million from Clark County yet the county is willing to settle for half that much in return.

    Stealing from the people of Clark County no matter who is doing the stealing. A citizen or the state.

    They took $100 Million we should expect the $100 Million returned in cash or services.

  2. Right on, vegaslee!

    I'm incredulous that any sane individual would settle for less than a 100% return plus damages and attorney fees. As it is the residents of Clark County pay outsized taxes to support the deadbeats in the cow counties. We drive the economic engine for the State of Nevada yet the Governor and Legislature give us the back of their hand. And now our own County Commission is turning against us? Any pol supporting this "deal" need not even ask for re-election.