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Special session opens today

Legislators convene at 9 a.m. today to approve a laundry list of one-time fixes designed to help state agencies survive until the 2009 session opens Feb. 2.

Much of what’s on the list of fiscal maneuvers can only occur once, and a number of the revenue items help the state by taking money away from local governments, schools and the university system. Gov. Jim Gibbons conceded in announcing the special session that he and lawmakers would have to find permanent solutions during the regular Legislature.

The special session was called to find about $340 million in reductions to balance the budget through June 30, 2009. That will bring the total amount cut from this two-year spending cycle to $1.5 billion.

The biggest single item on the list is the $160 million “line of credit” ” a loan ” from the Local Government Investment Pool managed by the treasurer’s office. Under terms of the plan, the state would have to pay that money back within four years. Neither lawmakers nor the governor’s office have yet identified a funding source to repay that amount.

The item likely to be among the most controversial is taking $25 million from the Indigent Accident Fund, a reserve which helps hospitals pay medical expenses of indigent victims of auto crashes and other accidents. Rural counties could be especially hard hit because their small hospitals would pass the bills along to the local governments if the fund wasn’t available.

Counties also would be hit by the plan, at least temporarily, to take their portion of mineral lease revenues, which are now split between counties and the state account which funds public schools. Doing so would reduce what the state must pay school districts by about $12 million over the rest of this fiscal year.

Another $14 million would be realized by reverting Insurance Verification Money to the General Fund instead of the Highway Fund. But the Highway Fund also is suffering with revenues falling short of what was budgeted by the 2007 Legislature, forcing reductions in transportation maintenance and construction projects.

And the university system would lose more than $6 million in estate tax and building maintenance funding.

In all, $76.7 million of the total was generated from non-General Fund sources.

Transportation funding gets another hit as the remaining $30 million of the $170 million General Fund appropriation for the I-15 construction project in Las Vegas goes back to the General Fund. The rest of that money was taken in earlier rounds of budget reductions. The project is moving forward using money from other parts of the NDOT budget.

Altogether, $72.8 million of the reductions comes out of agency General Fund budgets but nearly half of that total is the NDOT reversion.

A dozen of the revenue sources will come out of businessmen’s pockets. Most are reductions in the allowances businesses now get to calculate and account for sales, liquor, cigarette and other taxes they collect for the state. But that list includes one change announced by Gov. Jim Gibbons in his proclamation calling for the special session ” requiring mining companies to pay their net proceeds of the mines tax in advance this year. That generates about $28 million.

All of the other changes on that list total only about $4 million.

It will take at least five pieces of legislation to get the job done. One will implement the agency cuts, one will sweep money from reserve accounts and redirect it to the general fund. A third will be needed to require advance payment of the mineral tax and a fourth to reduce or eliminate collection commissions. Finally, legislation will be needed to take the mineral lease revenues that go to counties and put them in the state’s General Fund.

One piece of legislation that won’t be in the mix, however, is a bill to pay the cost of the special session. Legislative Council Bureau Director Lorne Malkiewich has said the estimated $80,000 cost of the two-day session can be covered by the Legislative branch’s reserves.

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