Sandoval administration admits $106 million budget hole

By David McGrath Schwartz

Thursday, March 3, 2011 | 4:19 p.m.

Gov. Brian Sandoval's budget has a $106 million hole, but the administration does not plan to submit a budget adjustment until May, budget director Andrew Clinger told a committee today.

The administration offered a new plan today to take school district construction money - this time from vehicle registration fees - that would eventually leave districts with only 30 days of reserves for emergency repairs.

Sen. Mike Schneider, D-Las Vegas, said some schools in his district were already using portable classrooms, some of which were "rat holes."

"My message to the governor's staff is find some other way to balance the budget," he said.

Sandoval's budget released in January proposed taking $425 million from school construction bond reserve money, including $300 million from Clark County. But Democrats and Clark County School District officials said the numbers the administration used were off - only about $99 million was available.

Clinger, the governor's budget director, countered today, and said $319 million was available. He presented a new analysis of money available from school districts to offset operating cuts. Included in that analysis is $124 million transferred from Clark County's Governmental Services Tax Fund, which is a tax tacked on to vehicle registration fees.

Clinger said despite these concerns, the governor's office would not submit a budget amendment before May 1, when the state re-projects its tax revenue projections. Clinger said sales taxes were higher than projected while caseload growth in the Department of Health and Human Services was lower. The federal government also might be able to help the state if it forgives or delays interest payment on unemployment money.

Clinger said the budget is constantly being adjusted, as numbers are "trued up" between staff and pieces get moved around.

"But this is a big one," countered Sen. Sheila Leslie, D-Reno, and chair of the Revenue committee.

Senate Majority Leader Steven Horsford, D-North Las Vegas, said he was "disappointed" that the governor would not submit an additional budget amendment until May. The 120-day legislative session ends June 6, budgets have to be closed in May and Horsford said the Legislature couldn't finalize the budget with a $100 million hole.

Leslie asked whether the governor was not obliged to submit an amendment to balance the budget. The state constitution requires the governor to submit a balanced budget to the legislature 14 days before the start of the session.

Democrats criticized both the delay and the substance behind the new proposal during a Revenue Committee meeting this afternoon. Horsford said, "We're using a creative financing approach to meet basic functions of government."

School districts testified that if the governor's assumptions on rate increases were wrong, they could be left without the money to fix broken boilers.

"I'm hearing Senator (Bill) Raggio in my head, saying we have to think ahead," Horsford said, bringing up the recently retired Republican senator who had the longest tenure in the senate of anyone in state history.