Gibbons takes control of stimulus

Gov. Jim Gibbons said Friday he doesn't need and will not ask the Legislature's authorization to receive and spend the $2.2 billion in stimulus money coming to Nevada.

He issued an executive order stating Nevada's constitution leaves it to the governor to run the state, and the American Recovery and Reinvest-

ment Act puts the governor, not lawmakers, in charge of the money.

"The money does not go through the Legis-

lature," he said at a press conference in Sparks.

But Controller Kim Wallin said the governor's plan has a problem, since her office won't process any of the work programs that spend the money unless they go through the Legislative Interim Finance Committee.

"If he sends over work programs without sending them to IFC, I can't process them," she said. "I have an attorney general's opinion on that."

The dispute arose after IFC Democrats rejected the governor's original proposal to hire two people to manage the ARRA money and federal reporting requirements. Instead of putting those positions in the governor's office or budget office, they put them under the controller.

Gibbons said the state controller's office has no authority and no business managing his executive branch agencies.

Deputy Chief of Staff and former Assembly Minority Leader Lynn Hettrick said the federal act gives control of the money to the governor and that "federal law supersedes state law."

"If (Wallin) wants to use a technicality to stop the money from reaching the public, she can," he said. "I think there's a way to work this out without continuing the fight. If she thinks there's an issue, I'd appreciate it if she'd give us a call and work things out."

Gibbons' executive order flies in the face of long-standing law requiring legislative approval to spend any money. According to Legislative Counsel Bureau Director Lorne Malkiewich, the State Budget Act, NRS353, requires legislative approval to receive and spend any federal money.

He said it's his understanding that ARRA puts the governor in control of the money, "unless otherwise provided by state law, and our state law requires it go through the state budget act."

Gibbons also said the $120,000 a year ARRA director would be paid for out of the ARRA money itself. Asked whether he can create such a position, he said he can do so without legislative approval. His Chief of Staff Robin Reedy said he can do so "because it's a non-classified position."

According to state law, the governor can do so as long as he pays it with money already appropriated to his office. NRS353 states it would require IFC or legislative approval to use ARRA funds to pay the salary.

Despite the apparent legal problems with the executive order, there seemed to be little appetite among lawmakers to challenge the governor for fear of opening up a possible constitutional challenge to IFC.

Senate Majority Leader Steven Horsford, D-Las Vegas, issued a statement making clear he has very little faith in the governor, who, he said, "proposed an unworkable state budget and was absent from the legislative process."

"State law requires that the Legislature's Interim Finance Committee review grants provided to the state to ensure they are well spent," he said, adding that lawmakers will follow that process with ARRA money as it comes to Nevada.

But he gave no indication of any desire to fight the governor on his executive order.

Senate Minority Leader Bill Raggio, R-Reno, said he would urge the Democratic majority to call an emergency meeting of IFC to correct their vote and move the ARRA coordinator to the budget office, where he said it belongs. Raggio said putting the program under the controller "was inappropriate."

"It was strictly a partisan vote," he said. "More than that, it was a personality issue and, in my opinion, a slap at the governor."

Raggio said both sides need to resolve the situation and avoid potential litigation.

"Unfortunately, if there's going to be litigation over this, understand there's always been a question about the constitutional authority and legality of the Interim Finance Committee and Legislative Commission. My advice is to have IFC meet as expeditiously as possible and get this resolved."

Gibbons originally proposed spending some $230,000 in state money to establish an office to manage the ARRA grants and handle reporting. When IFC instead put it in the controller's office, he questioned whether that action was legal.

Gibbons said his ARRA director will manage the receipt and distribution of the money but that the information will then go to the controller who can report to the federal government.

Raggio said he agrees with the governor that moving the program was inappropriate and potentially an overreach of IFC's authority.

Asked whether they had gotten a legal opinion saying the executive order was legal and constitutional, Gibbons and Chief of Staff Robin Reedy danced around a clear answer, saying the proposal had been submitted to the attorney general's office. They did not say they had received legal advice that the order was legal or constitutional.

The attorney general's office said a copy of the executive order was forwarded to them but that no legal opinion was requested by the governor.