Nev. court: Legislature can't raid local coffers

AP News
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Posted: May 27, 2011 8:42 PM
Nev. court: Legislature can't raid local coffers

Gov. Brian Sandoval will consider extending some expiring taxes to help plug a $656 million hole after the state's Supreme Court ruled that lawmakers can't siphon money from local governments to pad the state's coffers, an administration official said Friday.

Sandoval had previously opposed keeping the taxes, but "that's a solution that the governor is considering," said Dale Erquiaga, the governor's senior aide.

The high court's order forced the governor and legislators to scramble to rewrite a two-year budget because the ruling would make off-limits 10 percent of the revenue used to balance the $6.1 billion spending plan. With only 10 days until the session ends June 6, Sandoval and legislative leaders planned to work through the Memorial Day weekend on a resolution.

The administration also asked Attorney General Catherine Cortez Masto to file a motion with the court for an explanation of its unanimous ruling Thursday that found lawmakers acted illegally when it took money from a Clark County sewer district last year.

"We want to clarify with the court that it really meant what we think it meant," Erquiaga said.

It also asked Masto for her own legal opinion on the ruling's scope by the end of the holiday weekend.

"We don't have time for false starts. We don't have time to rush," Erquiaga said. "We need to get the work done quickly but accurately."

The court's ruling stemmed from $62 million that the state Legislature siphoned from the Clark County Clean Water Coalition in 2010 to help plug an $805 million state budget hole. The justices found it amounted to an unconstitutional tax.

"We recognize that the Legislature is endowed with considerable lawmaking authority under ... the Nevada Constitution," the decision said. "But that authority is not without some restraints."

Sandoval was not governor at the time, though his budget proposal for the upcoming biennium relies on taking dedicated money from some counties and school districts. The court order called into question the legality of the tactic that has been used by past administrations and legislatures in Nevada and elsewhere to cope with fiscal emergencies.

Critics have called the siphoning tactic "legislative cannibalism."

The administration wants clarification on whether the order only pertains to the coalition funds or extends to other diversions of local government funds by the state.

"The governor will not gamble with the executive budget," Erquiaga said, adding that a broader interpretation "will forever change" budgeting practices.

Temporary taxes passed by lawmakers in 2009 that are to sunset June 30 amount to $679 million, but not all will be considered for extension, Erquiaga said.

Taxes that the governor believes would be detrimental to the state's struggling economy are off the table, and lifting the sunsets on others must come with reforms pushed by Republicans.

Sandoval also agrees that cutting the $656 million from an already lean budget "isn't acceptable," Erquiaga said.