Lawsuit seeks millions state diverted from county

Seven months of negotiations fell apart last week between Clark County officials and Gov. Brian Sandoval’s office in efforts to recoup $102.5 million diverted to state coffers three years ago.

So on Tuesday, the county filed a District Court lawsuit to force the issue.

County officials contend a Nevada Supreme Court ruling last year requires the state to return the money, which was used to plug holes in the state budget. That ruling held that the state had to return
$62 million in Clark County Clean Water Coalition funds taken by the Legislature in 2009. It said such money grabs were unconstitutional because money was not taken uniformly from all 17 counties.

County Manager Don Burnette declined to comment Wednesday about what kind of “alternative resolutions” the state and county considered to try to resolve the dispute.

“I am disappointed that after months of negotiating we have not been able to reach an agreement,” Burnette said.

If the county prevails, the money would bolster the ailing county general fund and its $42 million budget gap and help prevent further cuts in services.

Mary-Sarah Kinner, the governor’s press secretary, said in an email that Sandoval’s administration “is extremely disappointed in the Clark County Commission and its manager.”

The Legislature passed a bill in 2009 to justify the transfer of county funds to the state’s general fund.

Commissioner Steve Sisolak said Wednesday he had hoped “we would never get this far” and file a lawsuit.

“I understand the difficulty for the state, but the state spent county taxpayer money all over the state,” Sisolak said. “They can’t do that. … The figure is enormous. This isn’t a figure we made up. That’s how much they took from the citizens of Clark County.”

Further complicating the county-state dispute is a disagreement over state Medicaid funding. The County Commission voted in March to keep $16.4 million in the county general fund originally slated to pay the state for access to additional Medicaid funding for University Medical Center.

The financially-strapped UMC lost more than $70 million for the third straight year in 2011 and performs millions of dollars of free work for indigent patients each year. The county lawsuit also challenges a state statute that forces the county to pay additional state Medicaid program funding.

County officials argue that county taxpayers are subsidizing the state Medicaid program when the rest of the state contributes about $300,000 – a contrast to the millions of dollars provided by the county. About 72 percent of Medicaid recipients in Nevada are in Clark County.

The county pays for 96 percent of the state’s Disproportionate Share Program, which provides hospitals, such as UMC, with enhanced funding because they provide services to a disproportionate share of low-income patients.

The county also pays for 97 percent of the statewide Upper Payment Limit Program, which allows UMC to access additional funding to fill the gap between what the state reimburses for services provided to eligible Medicaid patients and what is considered acceptable by federal regulations.

Contact reporter Kristi Jourdan at or 702-455-4519.

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