Nevada treasurer responds to criticism

CARSON CITY -- Nevada's treasurer fired back at an election opponent and legislators Friday, saying she warned lawmakers about the financially ailing Millennium Scholarship program but they ignored her.

Responding to criticism voiced earlier this week by challenger Steve Martin, a former state controller, Treasurer Kate Marshall said she told legislative leaders during the special session in February that she was not convinced the board of the College Savings Trust Fund would agree to turn over $4 million to bail out the scholarship program.

Yet legislators relied on that money when redoing the Millennium Scholarship budget in February and declared to college students that the scholarship program was solvent.

Now the treasurer's office has calculated that the scholarship program will fall $1.3 million into the red next year.

Legislators were told by Marshall's staff at Thursday's Interim Finance Committee meeting that they must figure out during the 2011 session how to fund the program properly or take steps to limit participation.

The Millennium Scholarship program offers $10,000 college scholarships to Nevada high school graduates who have 3.25 or better grade-point averages and pass all parts of the high school proficiency exam.

Marshall, a Democrat, has come under fire from Republican Martin and legislators for mishandling the program.

During the meeting, Assembly Minority Leader Heidi Gansert, R-Reno, said legislators were told during the special session there was enough money to keep the Millennium Scholarship program solvent into 2014.

"This is not adding up," Gansert said. "There are a lot of students who rely on this scholarship."

Marshall said Friday that she told legislative leaders in private conversations in February that they could not count on the five-member College Savings Trust Fund board giving the scholarship fund $2 million this year and $2 million next year.

"I told them that was a board decision," added Marshall, who has one vote on the board. "I told them two members of the board would vote no, but I would bring it to the board. What happened is exactly what I told them."

She said members balked at the $2 million-a-year transfers and agreed on only $200,000, which at the time was what the treasurer thought would cover expenses of the program through 2011.

Then her office received a report that funds Nevada received from a settlement with the tobacco industry over tobacco-related illness were dropping precipitously.

Forty percent of the tobacco settlement funds go to fund the Millennium Scholarship program. But the scholarship program received $2.6 million less than it anticipated in April.

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