Legislative counsel says state can borrow from state investment pool

CARSON CITY -- Legislative Counsel Brenda Erdoes said today that state government legally can take out a line of credit from the Local Government Investment Pool to help cover an estimated $330 million budget deficit.

The Legislature is expected to meet in a special session next Monday and Tuesday to come up with ways to balance the budget, including looking at the line of credit.

State Treasurer Kate Marshall said today that state government can borrow up to $160 million from the pool, which is money from local governments and schools.

She said that under terms of a bill being prepared by her office's bond counsel, the line of credit would be paid back over a four-year period at a 2.25 percent interest rate, which is better than the pool now receives. She said a loan would give the Legislature more time to come up with a lasting solution to its budget problems.

To take out the line of credit, Marshall said the Legislature needs to amend a law and classify the line of credit as an obligation of state government.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.