Governor wants to sell tobacco settlement

By Cy Ryan

Thursday, May 7, 2009 | 2 a.m.

In unveiling his plan to bridge the state’s widening budget shortfall, Gov. Jim Gibbons said he was showing lawmakers there’s a way to balance state spending without raising taxes.

Gibbons’ idea calls for the state to sell the $340 million it’s owed in tobacco settlement funding, open a $160 million line of credit and take $31 million from the state’s ending fund balance. Federal stimulus money would be used to fund all-day kindergarten and the Senior Rx program under the plan.

Though it wouldn’t raise taxes, the idea didn’t play well with one group that keeps a close eye on taxes.

“Good policy dictates you don’t bond for ongoing expenditures,” said Carole Vilardo, president of the Nevada Taxpayers Association, adding that she strongly opposes the governor’s plan. “You’ll be required to fill the hole next legislative session along with solving the hole when the federal stimulus money goes away.”

The Economic Forum, which makes the tax revenue projections that elected officials must abide by, said last week the governor’s original budget would be $900 million short.

The tobacco settlement is paid to Nevada at rate of about $40 million a year. State Budget Director Andrew Clinger estimated it would continue for another 20 years.

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As Nevada tries to bridge its growing budget shortfall, one proposal to increase revenue has been to collect taxes the state is already owed. State government is owed $382 million in unpaid taxes, but agencies have not been aggressive in collecting it, state Controller Kim Wallin has argued.

Wallin told the Senate Government Affairs Committee on Wednesday that the average debt owed to the state has been on the books 486 days.

Wallin was urging the committee to pass Assembly Bill 87, which would require state agencies to turn over debts to the controller’s office within 60 days. The legislation would also give the controller the authority to file suits to collect debts and to charge interest to people or companies that use the installment plan to pay off what they owe.

Wallin said her office would tack on a 2 percent fee for debts over $300. The controller’s office has three debt collection agencies under contract.

The committee took no action on the bill.

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The Senate Government Affairs Committee voted unanimously Wednesday to limit development in Southern Nevada’s Spring Mountains National Recreation Area.

Assembly Bill 352 would attempt to accomplish that by prohibiting the state Gaming Commission from issuing additional gambling licenses for the area and preventing local governments from approving increases in residential units beyond what current zoning regulations permit.

The bill, which goes to the floor of the Senate for a final vote, would also prohibit establishing any new nonresidential zoning districts other than for public facilities.

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The Senate Government Affairs Committee approved Assembly Bill 301 on Wednesday, making March 31 a nonpaid state holiday honoring Cesar Chavez, the civil rights activist and a co-founder of the first successful union of U.S. farmworkers.

The bill, which comes up for final passage in the Senate, recommends that news media, educators, labor, business and government leaders bring attention to the work of Chavez, who was instrumental in organizing the United Farm Workers of America.