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September 4, 2015

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Sandoval adviser: Taxes a ‘last resort,’ must come with reforms

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AP Photo/Cathleen Allison

Dale Erquiaga, senior adviser to Gov. Brian Sandoval, gives a press briefing Friday, May 27, 2011, at the Capitol in Carson City. Sandoval and his staff are determining their options after Thursday’s Supreme Court decision preventing them from siphoning money from local government to solve state budget problems.

KSNV: Sun's Anjeanette Damon on state budget cuts

The Las Vegas Sun's Anjeanette Damon speaks with KSNV about the state budget, one day after the state supreme court ruled the state government could not take $62 million in user fees from the Clark County Clean Water Coalition for a scuttled water project. The precedent-setting decision blows a $656 million hole in Gov. Brian Sandoval's budget plan, which his advisers said Thursday night might be plugged by extending 2009 tax increases set to expire. KSNV: May 27, 4 p.m.

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Brian Sandoval

Sun Coverage

CARSON CITY - As Gov. Brian Sandoval eeks further clarification on the effect of Thursday’s game-changing Supreme Court decision, his senior adviser said today that the governor will only consider raising the taxes set to expire in exchange for reforms of government.

Dale Erquiaga said at a news conference today that Sandoval does not support raising the complete $679 million that would come with lifting the sunsets on taxes passed in 2009. Sandoval would consider raising a portion of it.

Sandoval had campaigned and been a consistent voice against raising taxes or extending the 2009 taxes. But the Nevada Supreme Court decision to invalidate the state taking money from a Clark County water fund — which had a $62 million effect — creates an unforeseen circumstance.

The decision could put as much as $656 million in revenue that was in the governor’s budget at risk.

“The Supreme Court changed everything,” Erquiaga said. Taxes, he said, are “a last resort.”

Making an additional $656 million in cuts would mean “layoffs of hundreds of teachers ... The budget already contains difficult decisions,” he said. “We think this is a budget we can live with.”

Sandoval thinks that extending the sunsets must come with changes in how government spends money in the long term.

“It’s a last resort to go there. They have to come with reforms,” he said.

Interpreted most broadly, the Supreme Court decision means a number of budget maneuvers including taking school districts’ debt reserves and diverting property tax money from Clark and Washoe counties could be ruled unconstitutional by the court.

“That will forever change how we balance the budget in the state of Nevada,” Erquiaga said.

If the Supreme Court is interpreted narrowly and only applies to this instance, the hole could be just $62 million. In that case, “We’re back to where we were at 8 a.m. yesterday,” he said.

Sandoval’s switch on the expiring taxes is a huge step to resolving the impasse at the Legislature, where Democrats couldn’t find votes for taxes and Republicans didn’t have votes to pass Sandoval’s budget. But there are still plenty of negotiating left to do between factions, including over how much to raise in those expiring taxes, and what kind of government reforms the Legislature will pass.

Erquiaga said Sandoval still wants lawmakers to adjourn by June 6, the 120th and final day of the 2011 Legislative session.

Assembly Speaker John Oceguera, D-Las Vegas, and Senate Majority Leader Steven Horsford, D-North Las Vegas, have publicly expressed support for extending the taxes.

Sandoval still wants clarifications of the effect of the Clean Water Coalition vs. State of Nevada decision.

Sandoval spoke to Attorney General Catherine Cortez Masto at 1 a.m. today about filing a brief with the Nevada high court asking it to clarify its intent, Erquiaga said. He has also asked Cortez Masto to prepare an interpretation of the opinion.

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