State explores funding for public works projects
August 30, 2012
A state panel was told Wednesday that for yet another two-year state budget, there will be virtually no money available from property tax revenues for capital construction projects.
The state Public Works Board heard the disappointing news today as it began a two-day review of projects being sought by state agencies ranging from the Department of Corrections to Tourism and Cultural Affairs.
Public Works Board Manager Gus Nunez said state agencies have submitted 201 projects worth $528 million for consideration for the upcoming budget. The state funding portion totals $460 million.
The capital construction program for the current budget totals only $53 million, with $27 million in bonding from property taxes.
Jeff Mohlenkamp, state budget director and member of the board, said the state’s small share of property taxes has traditionally been used to finance bonds to pay for construction projects. But there is virtually no revenue in the current budget to fund projects, and the same is expected as the budget is prepared for the 2013-15 biennium.
“Once again we feel that there is going to be very little if any capacity for bonding within property taxes,” he said. “Right now I’m currently in discussions with the Treasurer’s Office and believe that that is not going to be a source of additional bonding capacity for us to look at.”
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Mohlenkamp said there are some other limited sources of funding, including unspent money from previously approved projects, highway funds and federal funds, which can contribute to the state capital construction program.
But property taxes have historically been the main funding source for projects.
Mohlenkamp said he is looking at an alternative source of funding but is not yet prepared to offer any details about what it would be.
“I’m currently working with the Treasurer’s Office and working internally with the governor’s office to try and identify a separate funding source to maybe generate some additional bonding capacity,” he said. “I’m not in a position to be able to disclose exactly what that is yet or how much money we can get. I do believe it is going to be far short of the requested demand. And when I say far short I mean far short.
“However I also realize in having discussions with Gus that there are some critical needs the state has to address,” Mohlenkamp said.
In past sessions when the economy was strong, the Legislature would appropriate tens of millions of dollars for new buildings, from prisons to museums, relying on the property tax revenue growth.
But the ongoing recession in Nevada has eliminated the revenue as a funding source for at least the near term.
The first presentation heard by the board came from Peter Barton, administrator of the Division of Museums and History. The agency’s requested projects include new air conditioning to replace antiquated units at the Lost City Museum in the Moapa Valley and a new freight elevator at the Nevada State Museum in Carson City. The elevator has failed and is now out of service, he said.