Gibbons won't accept stimulus money that expands, creates new spending

Gov. Jim Gibbons said Wednesday he won't take stimulus money that commits the state to higher spending in the future.

"I will not support any use of stimulus dollars to create new or expanded government programs that will require continued funding from the state," he said in a video address posted on his official Web site. "These dollars should not be seen as an opportunity to fund pet projects."

In an interview Wednesday, Gibbons said the numerous strings attached to the stimulus money give him a "very mixed" reaction to the package. Nevada is scheduled to receive $1.46 billion from the $787 billion stimulus package designed to get the nation out of its fiscal crisis.

"There are a lot of parts of that money we're very concerned with the language the federal government has attached to it," he said. "It makes it very difficult for the state of Nevada to access the money and not be obligated to long-term expensive requirements."

Gibbons said he is forming a team to review the language in the stimulus package and help him determine what to do with the different elements in it. He said he is inviting the Legislature and its fiscal staff to join in that process.

In his video, Gibbons said stimulus dollars will soften the economic impact on Nevada by allowing the state to offset some budget reductions, "but will not change the fact the state's expenditures still far exceed the state's revenues."

He said he intends to use those dollars primarily to increase funding for education, Medicaid and transportation.

"As our unemployment rate has skyrocketed, we have seen dramatic increases in Medicaid caseloads," Gibbons said. "We have a social and moral responsibility to ensure that Nevadans who lose their jobs through no fault of their own are not left in the cold when it comes to health care."

The stimulus money for Medicaid, which increases the federal matching rate from 50 percent to 59 percent, will free up General Fund dollars the state previously put into Medicaid. That money, he said, will help not only K-12 but higher education.

The largest single restoration of funding under the stimulus package is bringing the university system back to Fiscal 2006 levels. Executive Vice Chancellor Dan Klaich said that is $265 million in state funding over the biennium.

"We've either got to meet that or we've got to get it waived," he said.

For Health and Human Services, spokesman Ben Kieckhefer said the biggest issue is whether the state will have to put back the $56 million swept from the Indigent Accident Fund to help the state budget. That money is used by counties to cover medical costs incurred when catastrophic accidents occur in Nevada to people who can't pay. County officials say taking the money leaves them and small hospitals at risk and that the state has no right because it's county property tax money.

Kieckhefer said the legal question is whether it's state money or county money because the stimulus package bars states from taking local revenues.

The transportation money in the package, Gibbons said, will "help begin new transport projects, creating new jobs in an otherwise stagnant construction industry."

He said that after a thorough review of the stimulus is completed, budget amendments will be prepared to make the best possible use of the available money in Nevada.

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