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January 27, 2023

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Governor, Democrats on brink of showdown over stimulus funds

Gov. Jim Gibbons

Gov. Jim Gibbons

Nevada is approaching a constitutional crisis, and it doesn’t look like anyone’s willing to walk away.

The tinderbox is a system set up 40 years ago to make changes in the Legislature-approved budget when lawmakers aren’t in session. The Interim Finance Committee, which is made up of a portion of state Senate and Assembly, has been an efficient mechanism, making special sessions unnecessary for decades. But given that it is made up only of some legislators, it has raised questions about whether it is constitutional.

Now comes the spark that could set off the process of answering those questions. Gov. Jim Gibbons and the Legislature are battling over control of $2.2 billion in federal stimulus money, with accusations from both sides that each branch is treading into the other’s territory.

On Friday, Gibbons defied the Interim Finance Committee’s rejection of his plan to hire a stimulus coordinator and administrative assistant. He issued an executive order creating the jobs, something members of both parties said he can do. But he also said he would pay for the positions with federal stimulus money, without approval of the Interim Finance Committee.

“If they want to challenge this, they want to go to court, they want to waste taxpayer money and time challenging this, so be it,” he said. “Let them sue me. This is the way the state of Nevada is going to move forward.”

He left it unsaid that his office would countersue. But his talking points, handed out to the media, contained this: “If the Legislature decides to use taxpayers dollars to sue me, they will have to prove the constitutionality of the IFC. I don’t think it can be done.”

This is uncharted territory, reflecting the worst relationship between the governor and Legislature observers can remember.

“I’m not aware of a governor exercising an executive order in this manner, using an executive order to trump a legislative directive,” said Guy Rocha, former state archivist and longtime Carson City observer. “The question about whether the IFC is constitutional has been percolating for years.”

How worried are state leaders about how far this situation will go?

Senate Minority Leader Bill Raggio, a wise eminence in the Republican Party, said Democrats on the committee should back down. (Republicans voted against moving the position from the governor’s office to the controller’s office.)

Raggio wouldn’t address Gibbons’ contention that he didn’t need the committee’s approval to fund the position.

“If the IFC puts the position back under the governor’s office, the question is moot,” Raggio said. “If we get into litigation, and it’s challenged whether the Legislature has this authority, it opens up a can of worms. It’s ill advised.”

Democrats, though, stood by their decision to put the position under the state controller. Assemblywoman Debbie Smith, D-Sparks, said Controller Kim Wallin had been working for months with the governor’s former staff on stimulus reporting requirements. Wallin is a statewide constitutional officer, accountable to the public.

Smith said the decision to move the position to Wallin’s office was “well contemplated, well constructed.”

Smith said Gibbons had the authority to create the position. But she questioned whether the way he plans to fund it is legal.

Gibbons’ budget office said it will forward the budget change — called a work program — to the controller’s office, which oversees state spending.

“If he is intending to stop taking any work programs to the IFC, that’s clearly a violation of the statute,” Smith said.

Still, she said, “We don’t want to end up in court over this.”

We’ll see.

Wallin still has a legal opinion from 18 months ago, when Gibbons (as other governors before him had done) sought to cut budgets without legislative approval. Despite resistance from other Democrats, who didn’t want to get involved with budget cuts, Wallin insisted that the Interim Finance Committee had to vote on the cuts. Attorney General Catherine Cortez Masto, also a Democrat, agreed.

Robin Reedy, Gibbons’ chief of staff, said the executive order can replace the authority of a vote of the committee.

“All expenditures will be documented and follow the plans submitted by the departments to the federal government,” she said.

Still, some see this fighting between branches, and the possible collapse of the system used for the past 40 years to keep the state functioning, as a good thing for Nevada in the long run.

Rocha said the state’s system of a part-time legislature meeting every other year is antiquated.

“In reality, we need annual sessions,” he said. “If Nevada is going to be dynamic in the 21st century, be competitive in the national and world economy, we cannot run with a system set up in 1864. It doesn’t work.”

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