Local governments crowded the Senate Taxation Committee Tuesday to urge lawmakers not to balance the state budget on the backs of cities and counties.
According to budget director Andrew Clinger, the increase in the state's commission for collecting and distributing sales taxes to the counties and taking 4 cents worth of local government property taxes will cost the counties $108.2 million.
"I'm not going to support this tax shift," said Chairman Bob Coffin, D-Las Vegas, after the meeting. "Local governments can't afford it."
Local officials said those aren't the only provisions in Gov. Jim Gibbons' proposed budget that hurt them. One of the biggest concerns, they said, is taking the $28 million a year in the Indigent Accident Fund, which pays catastrophic medical bills that counties are legally responsible for.
"We want to be part of the solution," said Carson City Mayor Bob Crowell. "We'd like not to be the solution."
"We want you to remember, Humboldt County has never been a burden to the state," said county commissioner Tom Fransway. "And we hope the state will reciprocate."
Members of the Senate panel chaired by Coffin were told taking the accident fund would expose counties to potential bankruptcy and create lawsuits as hospitals attempt to make counties pay huge medical bills.
Bob Hadfield, representing the Nevada Association of Counties, said the accident fund was created in the early 1980s to stop those problems and provide a stable revenue source to handle indigent medical bills.
"If you wipe these funds out, you're going to create the biggest mess," he said. "We're going to have litigation, going to have people hounded by bill collectors and you're going to bankrupt these little hospitals."
Reno Mayor Bob Cashell and others pointed out that, with the statutory property tax cap of $3.64 per $100 of assessed valuation, counties can't get back the 4 cents.
"We don't have a mechanism to make it up," he said. "The thing we're going to be penalized in is shared services."
He said that means programs for the homeless, for indigent care and the social services the city shares with the county.
"If this is done, it's breaking a trust with the taxpayers," said Esmeralda Commission Chairman Nancy Boland.
After the meeting, Coffin said he believes the governor "does not understand some of the ramifications of the property tax."
"The property tax is so complicated," he said.
Washoe Commission Chairman David Humke, a former Assemblyman, said local
governments haven't been ignoring the state's fiscal crisis.
"We have already cut several times."
Throughout the meeting, local officials said repeatedly the governor's office made no attempt to consult with or even warn them the provisions were in his budget plan.
Sen. Mike Schneider, D-Las Vegas, asked whether the governor's office "thought the cities and counties weren't having the same problems the state is?"
Chief of Staff Josh Hicks admitted that the counties weren't brought into the process.
"I just didn't recognize when (Las Vegas Mayor) Oscar Goodman and I said the state needed a stable tax that it was going to be on our backs," Cashell said. "Nobody knew it was coming."
Coffin said the committee will have a better idea of the full impact of the governor's proposals after the governor's office spells out exactly what it wants in a piece of legislation.
- Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.