Counties bracing for fight with Gibbons on budget

By Cy Ryan

Friday, Jan. 16, 2009 | 3:37 p.m.

CARSON CITY – While Gov. Jim Gibbons wants to siphon money from the counties, the counties are getting ready to battle for more authority to raise taxes.

“A lot of counties are experiencing revenue shortfalls and having to reduce their expenditures and lay off people,” says Jeff Fontaine, executive director of the Nevada Association of Counties.

They have the same financial problems as the state, yet the governor is proposing to shift some of its problems to local government, says Fontaine.

“We’re not supportive of taking local revenues to solve state problems,” says Fontaine.

The counties anticipated some of suggestions by Gibbons.

The Nevada Association of Counties has a bill ready for introduction in the Assembly to permit county commissions to increase the property tax by 10 cents per $100 of assessed valuation for “public safety, health and welfare services.”

The extra 10 cents would be above the present $3.64 limit on the property tax.

Gibbons wants to take 4 cents of the property tax away from Clark and Washoe counties, representing a loss of $79 million over two years. Clark County would get cut by $66 million and Washoe County $33 million.

Gibbons told a press conference the counties get $3.50 of the property tax so it should not be a major loss.

The governor also wants to increase the assessment charged to the counties by the state for the collection of the sales tax. It is presently three-quarters of 1 percent and the state is seeking to increase that to an even 1 percent to bring in an additional $29 million over the next two fiscal years.

What is also disturbing to the counties are the plans by the governor to cut back on payments to hospitals for indigent patients. Many of the hospitals are public and the responsibility of the counties.

Rates paid to hospitals by the state-operated Medicaid to care for low-income patients were reduced by 5 percent last September. And the plan calls for another 5 percent reduction next July, bringing the cutback to 10 percent. The reductions would save $22 million for the state over the next two fiscal years.

The governor is recommending that a program that reimburses counties and hospitals for treating indigent persons in accidents be eliminated and the money transferred to the Nevada Medicaid budget. This money would be used in Medicaid to match federal funds totaling about $28 million a year.

Fontaine said his organization doesn’t oppose the state using the money to match federal funds but said he thinks the counties should be held harmless in paying the hospital bills of indigent patients.

Under the Gibbons plan, hospitals and counties won’t be reimbursed for the indigent persons who may be injured in an auto or other accident.

Bill Welch, director of the Nevada Hospital Association, said Medicaid imposed a 5 percent reduction in rates to hospitals last September. Four hospitals, including University Medical Center, Lake Mead and Sunrise, had to cut services.

If the governor’s proposal goes through, it would mean a $57 million a year reduction in reimbursements to hospitals for treating low-income patients. It’s a tax on hospitals, says Welch, and the industry is already operating at a deficit margin.

Of the potential $57 million annual cut, University Medical Center in Las Vegas would have to bear an estimated 25 to 35 percent.

Welch complained the industry is being singled out. “It’s a pretty bleak situation,” he said.

Medicaid, he said is now paying only 60 to 65 percent of the cost of hospital treatment. And he doesn’t know if the counties will be able to provide additional money to keep the public hospitals going.

The hospital industry, Welch said, is evaluating the impacts if the Gibbons’ budget is approved.

There have been suggestions that some hospitals in rural Nevada may have to close under the proposed budget and cutback in funds.

In another bill ready for introduction on the first day of the Legislature, Feb. 2, Clark County has legislation to permit the county commission to impose a fee on a construction company working on a public street that disrupts vehicular or pedestrian traffic.

Sabra Smith-Newby, spokeswoman for the county, said both Las Vegas and North Las Vegas are able to charge these fees and Clark County would like similar authority. It’s not aimed so much as raising revenue as keeping the traffic flowing in Southern Nevada.

The county, said Smith-Newby wants to make sure the construction company finishes the job as promptly as it estimated and “open up the streets” when they say they will.

The Nevada Association of Counties has a bill to allow the low governments to sell the naming rights for parks, recreational, cultural and memorial centers.

The measure, Assembly Bill 31, would also permit the counties to impose a civil fine instead of a criminal penalty for violation of an ordinance or regulation by a business.

Cy Ryan may be reached at (775) 687 5032 or [email protected].