Nevada county officials: Gov. Gibbons' budget is 'death by a thousand cuts'

County officials from around the state say Gov. Jim Gibbons is balancing the state budget by dumping huge costs on local governments and devastating public services " especially in rural areas.

"All across the governor's budget it's like, 'We're going to figure out how to solve our problem by creating a problem for someone else,'" said Ken Retterath, director of Adult Services for Washoe County.

Mary Walker, who lobbies for Carson City, Douglas, Lyon and Storey counties, said there are numerous hits to local governments in the budget. She described it as "death by a thousand cuts."

"In Carson City, our sales tax decline is double the state's and here the governor's budget is taking from us." she said adding that other small counties are in the same boat.

While the state's taxable sales dipped 10.9 percent in November, Carson City's fell 23.4 percent.

Walker and other county officials were especially angered by the state's move to grab the $28 million a year that goes to the Indigent Accident Fund. That fund was created about 20 years ago to pay medical costs of indigents who are hurt in accidents across the state. Before then, those indigents ran up huge hospital bills and resulted in hospitals suing the counties where the accidents happened. The legislation puts revenue from 4 cents of each county's property tax rate into the fund each year.

"Ninety miles of US. 95 goes through our county," said Esmeralda County

Commission Chairman Nancy Boland. "If there was a tourist bus accident, that could literally wipe out our county."

"We have 80 miles of Interstate 80," said Pershing County Commissioner Roger Mancebo. "You know how many accidents we have on I-80. Any one of those can run a half million dollars in medical bills."

"They're going to be creating a long-term devastating problem that's going to have to be dealt with by the counties," said Nye commissioner Joni Eastley. "Where are we going to find the money."

"Everybody thinks those are state dollars," said Retterath. "Those are 100 percent county dollars."

Lincoln commissioner Tommy Rowe said Grover C. Dills hospital is a good example. It received $460,000 from the fund in 2008 and finished the year with a balance of just $100,000. The Indigent Accident Fund, he said, kept the hospital in the black.

Clark County lobbyist Sabra Smith-Newby said University Medical Center received $13.5 million from the fund last year.

She said another one of the governor's proposed cuts " a further 5 percent reduction in Medicaid reimbursement rates " will cost UMC another $21.5 million. UMC is the state's biggest provider of indigent medical and Medicaid services.

Mancebo too expressed concern about what that reduction would do to Lovelock's hospital which he said is "always just a couple of days from closing down." State taxation officials are considering taking over management of the Pershing County hospital to prevent it from financial collapse.

In fact, state officials have been told the 5 percent Medicaid reduction could force elimination of services and even closure of some rural hospitals.

Another part of the governor's plan would take 4 cents from the property tax rate in both Clark and Washoe counties. That generates nearly $80 million for the state but cuts nearly $15 million from Washoe's budget and more than $60 million from Clark.

It also violates a pledge by the 1979 Legislature to get the state out of the property tax business. County officials say if the state wants to do that, it should take the hit for the tax itself and raise the property tax cap by 4 cents.

B.J. Selinder of Churchill County and Boland said the decision to grab all the geothermal and mineral lease money generated by recent federal auctions hurt them badly.

Selinder said Churchill stood to get $6 million " 25 percent for the school district and 75 percent for the county " from those leases. He said plans were to use the money to build a juvenile detention center. He said that is the second time a decision by Gibbons has blocked that project. Two years ago, he vetoed the legislation allowing Churchill and Lyon to increase taxes to pay for it.

At the same time, Walker said, the governor's proposed budget eliminates about 100 juvenile detention beds in the state.

"We don't have any place for those kids," she said. "The governor did not allow us to fix the problem and now he's cut the beds. Where do those kids go?"

In Esmeralda County, where the total budget is just about $4 million a year, Boland said grabbing the lease money took $1.6 million they were planning to use for a new jail. Boland said that money was a vital windfall for the county since, with 98 percent of its land owned by the federal government, Esmeralda has practically no property tax base.

Another sore spot is the plan to increase what the state charges to collect and distribute sales tax revenues to local governments. The plan would raise the rate from three-quarters of a percent to 1.75 percent.

"Two-hundred-forty governments are going to see a 1 percent decrease in their revenues," said Smith-Newby adding that the move even impacts the voter approved tax assessment to put more Metro police officers on the streets.

Walker said that assessment will cost Carson City $400,000, Douglas $380,000, Lyon $260,000 and Storey $50,000.

"They're collecting more than it costs them to collect it," said Nevada Association of Counties Director Jeff Fontaine.

Closing down 11 rural Mental Health Clinics around the state, said former NACO director Bob Hadfield, will seriously damage an already fragile rural medical services system. Walker said western Nevada will lose four of the seven rural clinics.

But the people served by those clinics will still need help, said Hadfield.

"The system is gone," he said. "Every gain we made is now gone. This is absurd."

Boland and Eastley said the planned closure of the Tonopah Honor Camp will have serious implications as well. They said that camp provides primary first response for wildland fires in central Nevada. With its closure, help will be at least three hours away.

"If there's a fire, we're gone," said Boland.

Eastley said those inmates also provide a variety of other services in the area including road repairs.

Several of those interviewed charged that they are still finding places where they get hurt in the proposed budget. Selinder said one example is cutting the money that pays for physicals for volunteer firemen, forcing counties to pick up the cost. And Walker said it's not clear if the $1 million taken from the POST police training budget will fall on local governments.

Fontaine said an additional problem for local governments is that they must build their budgets for the coming year before they know what the Legislature's decision on all the proposals is. Preliminary budgets must be filed with the Department of Taxation in March and final budgets by May. The Legislature runs through the end of May.

He questioned how local governments can even plan their budgets.

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