A joint budget subcommittee voted Monday to eliminate the estimated $50 million fund that pays hospitals for costs of treating indigent accident victims.
Reallocating the money from the Indigent Accident Fund into the General Fund was proposed by Gov. Jim Gibbons to help balance the budget.
The decision leaves counties exposed to potentially huge medical costs run up primarily at Renown in Reno and University Medical Center in Las Vegas. There was testimony that a serious accident with multiple injuries can cost hundreds of thousands or even millions of dollars.
Those hospitals then bill the counties where the accident occurred for the medical costs when the patients are uninsured or underinsured.
There has been some suggestion lawmakers could pass legislation relieving the counties of that legal burden, but that would just shift the cost to the hospitals.
Former Nevada Association of Counties Director Bob Hadfield testified in February that the fund was created in the 1980s to stop legal battles between counties and the hospitals over who would pay those medical bills. It set aside 4 cents of the county property tax rate to cover those costs.
"If you wipe these funds out, you're going to create the biggest mess," he testified. "We're going to have litigation, going to have people hounded by bill collectors and you're going to bankrupt these little hospitals."
"If this is done, it's breaking a trust with the taxpayers," said Esmeralda Commission Chairman Nancy Boland at the hearing on the plan in February.
Reno Mayor Bob Cashell as well as 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.
Only Sen. Bob Coffin, D-Las Vegas, voted against the decision to take the money, charging that the governor was just creating a hole in local government budgets.
Assemblyman Joe Hardy, R-Boulder City, agreed but like everyone else on the joint subcommittee, said he would support the move.
"I don't see any way out of this," said Sen. Bernice Mathews, D-Sparks.
Senate Minority Leader Bill Raggio, R-Reno, said he would support the plan on one condition.
"My support is based on doing something that alleviates the loss to local governments," he said.
The original plan counted on getting a total of $56 million out of the Indigent Accident Fund. But property tax revenue estimates have since been revised down to $48.8 million, leaving a $7 million hole in the budget even with the IAF money.
Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.