Las Vegas Sun

August 4, 2015

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STATE BUDGET:

Sandoval stalks city, county coffers

It has been apparent for some time that the state would look to cities and counties to help bridge its multibillion-dollar budget gap.

Even before Gov.-elect Brian Sandoval won the election, budget staff had begun gathering data on cities and counties’ tax revenue. And Sandoval, who won promising to balance the budget without raising taxes, has since said he will look to local government for tax revenue.

The administration has not publicly detailed how it will go about taking the money, but sources have told the Sun the outlines are taking shape.

Specifically, sources say:

• Sandoval is considering taking a chunk — 5 cents per $100 of assessed value — of county property tax revenue. That would translate into about $70 million-$80 million less for Clark County and that much more for the state and come on top of the 4 cents the state took two years ago, costing the county $60 million.

• The governor-elect’s staff has informed county staff that it wants district courts in Washoe and Clark counties to assume most of the $11 million cost of pre-sentence investigations now done by the state Division of Parole and Probation. Clark County already handles all juvenile probation cases.

• Sandoval wants to give Clark County responsibility for “back-end” support of child welfare — foster care, counseling and institutions to house children — which the state would hand off with some funding to pay for it. The state spends

$91.5 million on back-end child welfare services. The county, at its expense, handles case investigations by Family Services and Metro Police intervention.

• The governor-elect might also take a bigger share of federal funding that pays medical expenses for the poor. Clark County contributes millions of dollars — $65 million in 2009 to the state’s Disproportionate Share Hospital fund — which the state uses to attract increased federal funding in the form of matching dollars. In return, University Medical Center two years ago got about $80 million. But the state also keeps millions for itself. In 2008, the state kept $19 million of about $107 million, or about 18 percent. Sources say the state wants to increase that share.

Sandoval’s senior adviser, Dale Erquiaga, acknowledged that Sandoval is carefully considering “all of the data,” while building a budget that does not include a tax increase. Erquiaga, however, said the Sandoval administration’s strategy likely won’t mimic the tactics of past administrations and legislatures, which looked simply to standing pots of money for a short-term fix for the state’s lack of revenue.

“We’re trying to end the process of ‘here’s a bunch of money and we’ll just take it,’” Erquiaga said. “We’re trying to look at the system as a whole, where

$20 billion in revenue is spent. We have a tendency to look only at the state general fund and see a shortfall. The governor-elect is looking at really the whole picture (of state and local governments). We have that much money to spend and, as a people, where should we spend it?”

Sandoval must prepare a budget by Jan. 24, when he will deliver his State of the State address and unveil his spending plan. The Legislature will spend the next four months debating, amending and voting on the budget.

John Oceguera, D-Las Vegas and the incoming Assembly speaker, said he had not seen or heard the governor’s budget proposals. But, he added, the upcoming legislative session will involve considering budget cuts and moving services between local and state governments.

At least in Northern Nevada, some governments are trying to obligate any money they had been saving for capital projects out of fear that the state may empty their accounts.

Reno Mayor Bob Cashell said last month that the Reno City Council has ordered the city’s road funds to be obligated quickly and he has advised the Truckee River Flood Project managers to do the same. Cashell is assuming the state will go after city dollars, as well as county dollars.

During the previous legislative session, only counties were targeted, a strategic move by lawmakers to limit opposition to their targeting of local dollars. By Clark County’s estimate, state lawmakers in 2009 cost it about $180 million over the next two budget years.

There appears to be no moves to tie up Clark County dollars before the state swoops in to take a cut.

Clark County Commissioner Steve Sisolak said it is assumed the state will try to take some money. Unlike two years ago, however, he wants it to be fair — all Nevada governments, not just Washoe and Clark counties, should shoulder some of the burden.

“Henderson just opened a new aquatic center (this year) and we can’t even fix the pool at Sunset Park,” he said. The state “seems to ignore some of these cities have more money than the counties do. I understand we have to take a hit, but it can’t just be the two counties.”

At the same time, Sisolak said Clark County isn’t doing itself any favors by approving contracts with employees that include salary increases amid the state’s worst recession. He and his fellow commissioners are set to vote today on contracts with the public employee unions of the Las Vegas Valley Water District that would tie future raises to increases in the consumer price index. “I think it makes (legislators) think we have more money than we do,” he said.

Outgoing Commission Chairman Rory Reid, who ran unsuccessfully against Sandoval, said that “if the state is looking at the counties as if they are flush and can solve every problem, that perception is simply inaccurate.”

Reid said he tried to collaborate with the state, “but if the state continues to look at local government as nothing more than an account to access when they have problems, that’s going to make collaboration even less likely.”

Commissioner Chris Giunchigliani, who served 16 years in the Legislature before being elected to the commission, said Carson City is so far from Las Vegas that representatives forget where they came from and who got them there. It’s up to voters to remind them, she said, “to get into it. If you have a relationship with your legislator, you can tell them what their cuts will do. That’s part of a constituent’s responsibility.”

She was more circumspect on the governor’s budget. The budget is a starting point and it rarely looks the same at the finish, she said.

Sandoval “has got to do what he has to get the ball rolling, it’s a place to start,” she said. “But this isn’t the time to rob Peter to pay Paul. This is a time to collaborate and look at efficiencies, redundancies, shared staffing and consolidations where appropriate.”

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