Clark County could send Legislature scrambling to fill budget hole

By Joe Schoenmann

Friday, July 1, 2011 | 2 a.m.

Let’s say Nevada’s attorney general agrees with Clark County and tells state lawmakers that they were wrong and must refund the $102.5 million they took from the county over the past two years.

What then?

Clark County’s gain would be some other governmental entity’s loss. But whose?

It’s the type of question that can give politicians hives because no matter the answer, it is likely to force the governor and lawmakers back to the table to either raise taxes to make up the loss — or push the loss onto agencies that are already hurting.

Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, didn’t mention taxes when asked what might happen. She did, however, mention “education and health care” as potential victims of more budget cuts.

“We’d have to give services to some counties or take it from education and health care,” said Kirkpatrick, who is considered a candidate for Assembly speaker when the Legislature meets in 2013.

County Commissioner Steve Sisolak, who pushed for the county to request the refund, was unmoved by Kirkpatrick’s complaint. The county would settle for the $102.5 million refund to be spread out over, say, 10 years, he said.

“They’ve already taken from education and health care, the hurt has already been put on our citizens for the last two years by taking a disproportionate share of tax dollars from Clark and Washoe counties, and we need to fix that,” he said. “We can’t just ignore problems and hope they go away.”

But in the budget passed by the Legislature in June, the state reduced per-pupil funding and scaled back its social safety net, which has been strained by increased demand during the recession.

How would schools deal with the loss? A lobbyist for the Clark County School District could not be reached for comment Thursday.

The governor’s office referred questions to the attorney general, because it has not seen the letter and it represents possible pending litigation.

Although the county has long lamented the state swooping in to loot its coffers, it wasn’t until the Nevada Supreme Court ruled the practice unconstitutional in May that local governments had any hope of fighting it.

Facing more than a billion-dollar deficit in 2009, lawmakers took measures that deprived Clark County of $180 million in tax revenues from 2009 to 2011. It did the same in Washoe County, which lost about $50 million.

But it left other counties and, for the most part, local municipalities untouched. County officials pleaded with lawmakers to be fair: If they were going to take, take from every county, not just the two biggest.

Only after the state tried to take $62 million banked by the Clean Water Coalition did questions arise. For years, the coalition had been collecting taxes on sewer bills in Southern Nevada to fund an $860 million pipeline to return treated wastewater to Lake Mead. Filtering technology improved, however, and wastewater experts said the pipeline wasn’t needed. As the coalition began a long dismantling process, the state saw the $62 million it had in the bank and took it.

The coalition sued, arguing the state had no right to take money collected from ratepayers for a specific purpose. The Supreme Court sided with the coalition because the money grab violated a constitutional tenet that “all laws should be general and operate uniformly throughout the state.”

The ruling prompted wholesale changes in a state biennium budget proposal. Instead of taking money again from Clark and Washoe counties, the governor reauthorized $626 million in taxes that would have expired Thursday.

A few weeks later, Clark County said “you’re not done yet,” and sent the letter requesting a refund.

Despite the uncertain effect of a refund on the state budget, Sisolak is unapologetic about trying to get the money back.

“I think the Legislature needs to fix its funding problem,” he said. “They need to determine how they’re going to fund education. That’s a state function, not a county function. They’re going to say we hurt education? Then how do they feel when we have to deprive seniors of home health care because we don’t have the money they took? Or food banks that need money?”

If the attorney general returns with an opinion that lawmakers were wrong and should refund the money, Kirkpatrick said the governor may have to call a special session of the Legislature to reconfigure the budget. That will cost the state even more.

“That’s $150,000 a day,” Kirkpatrick said. “That’s additional cuts.”