Nevada struggles to pay bills with budget shortfall

The Interim Finance Committee on Tuesday found itself in the same position many wage earners do periodically - more bills than cash in the bank.

And they responded by doing just what those families sometimes do - telling the budget office to basically write post-dated checks.

The state's problem is the unanticipated demand on the Interim Finance contingency fund has exceeded the amount the 2005 Legislature put there. As of Tuesday morning, the fund was down to $273,602 and IFC was looking at bills totaling $656,177.

The committee, headed by Senate Finance Chairman and Majority Leader Bill Raggio, R-Reno, voted to approve the expenditure anyway after Director of Administration Andrew Clinger told them he has confirmed state agencies will shortly revert more than $1.2 million back to the contingency fund in unspent appropriations.

Raggio advised Clinger to pay those bills most critical first and give the others IOUs until the money comes in. Clinger told him the budget office is already moving to get those reversions back in the contingency fund as soon as possible.

The largest single item is the cost of hiring a dozen different outside law firms during 2005 to handle cases either too complex and specialized for the attorney general's staff or because Attorney General George Chanos had a conflict from his prior private practice.

Assistant Attorney General Randall Munn told the committee he expects the need for outside counsel to drop back to its historic two to three times a year in 2007.

The contingency fund started at some $12 million. But higher than budgeted gas, heating fuel and electricity prices have cost agencies, including the highway patrol and prisons. In addition, numerous agencies in Health and Human Services as well as prisons have been hit by increases in the cost of prescription medicines.

State Forester Pete Anderson and Frank Siracusa, head of the Division of Emergency Management, advised the committee they are approaching a similar situation in the disaster relief account, which is being tapped to pay fire costs.

Anderson told lawmakers Nevada has already had more than 1,000 fires this year consuming nearly 1.5 million acres - some 900,000 of those acres in Elko County.

Paying the bills through July reduced that fund from $10 million to $5.5 million, and, Siracusa said, there will be another $2.5 million in bills for August firefighting efforts. Add to that the $1.6 million Caliente and Lincoln County have requested to cover flood damage earlier this year.

If September is bad, he warned, the disaster relief account too could be depleted by year's end.

The state has plenty of money in its general fund to cover the bills but is fighting a legal problem. Only the Legislature, which doesn't convene until February, can legally refill those emergency accounts.

And no one from legislative leadership to the governor's office wants to call a special session between now and then.

Raggio advised fellow lawmakers they're going to have to recognize that costs of firefighting and other such problems have gone up and that they will have to increase the amount of money appropriated for those emergency accounts this next session.

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.