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State settles $103 million lawsuit with Clark County

CARSON CITY – The state of Nevada used some creative financing Wednesday to settle a $103 million lawsuit with Clark County without paying out any state tax dollars.

Instead of state money, the Nevada Board of Examiners will use about
$55 million in federal funds it receives to compensate Clark County for taking $103 million of its property taxes during the 2009 legislative session.

The local property tax funds were grabbed by then-Gov. Jim Gibbons and the Legislature to balance the state budget at a time when state tax revenues had dropped because of the recession.

At Wednesday’s meeting, Gov. Brian Sandoval and Secretary of State Ross Miller – who sit on the board – agreed to reduce the money Clark County needs to give the state to acquire federal Medicaid matching funds to cover its indigent hospital care costs.

The change is worth about $20 million to the county over the next couple of years.

And the board also decided to give the county $35 million in federal transportation dollars to cover most of the costs of a $50 million airport connector flyover on the Las Vegas Beltway. These funds might have been given to the county anyway, but with the money in hand, the county can start work on the project.

“It turned out in a great way for both sides,” said Sandoval, noting the Clark County Commission approved the settlement agreement unanimously Tuesday. “It was a fair deal for both sides.”

Sandoval said the flyover is an important project that will benefit both locals and tourists.

Without the federal transportation money, he said the county would have had no way to start the project in the immediate future.

The county sued the state for the return of the property tax revenue after a state Supreme Court decision in May 2011 essentially found that state government could not take money from just one or two counties and use the proceeds to balance the state budget.

That court decision forced state government to return $62 million in Clark County Clear Water Coalition funds that also had been used to balance the state budget in 2009.

In September, the Board of Examiners made a similar decision to pay back Washoe County about $7.25 million for $21 million property taxes the Legislature and Gibbons took in 2009.

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

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