Sandoval defends decision to continue sunset taxes

Gov. Brian Sandoval says efforts by Clark and Washoe counties to recover more than $120 million they believe the state owes them validates his decision to continue about $600 million in taxes that would have expired July 1.

But he isn't quite ready to hand over a check.

Sandoval on Monday defended the decision against criticism leveled by conservatives who said rather than continue the sunset taxes, he should have forced counties to roll the dice in court to get their money.

By keeping the taxes in place, the governor and Legislature could avoid a special session should a court rule the state owes counties money, Sandoval said.

"Now the state is better positioned in the event of a decision by the (Nevada) Supreme Court which would have implicated those monies," Sandoval said during a brief interview in his Las Vegas office after a meeting of the Nevada Commission on Economic Development.

Sandoval did, however, leave open the possibility of opposing the counties in court, suggesting the state could argue that plaintiffs waited too long to make a claim.

"There may be other legal issues that have an effect on whether those cases are viable," said Sandoval, a former federal judge.

Conservatives, chief among them activist and consultant Chuck Muth, have criticized the Republican governor for responding to a May 26 decision by the Supreme Court that said former Gov. Jim Gibbons and the Legislature in 2010 wrongly appropriated for the state
$62 million from the Clark County Clean Water Coalition.

Sandoval said the ruling could have broad implications for up to $660 million in state money dating back several years, an interpretation he said required going back on a promise to oppose delaying the expiration date of about $600 million in parts of existing payroll, sales and car registration taxes.

Conservatives such as Muth and state Sen. Michael Roberson, R-Las Vegas, said the only sure thing about the decision was it covered $62 million and suggested if local governments wanted to pursue other money, they could go to the courts.

Muth said even if Sandoval stuck to the broad interpretation, he could have balanced the budget by cutting more spending.

Asked about Sandoval's assertion that recent refund requests from Clark and Washoe counties validate the governor's cautious approach, Muth said the statement was self-serving.

"The governor is trying to have his cake and eat it too," said Muth.

He said that if Sandoval thinks the counties are owed the money, then the state should just pay up. "Why force them to go to court?"

The Clean Water Coalition case turned the most recent legislative session upside down the moment the court announced its decision.

It prompted Sandoval to rework a
$6.2 billion general fund budget to include revenue from taxes he had said should expire.

Shortly thereafter, politicians in Clark and Washoe counties started efforts to recover money they say they are owed because of the decision, which said it was wrong for the state to take money set aside for a specific purpose such as clean water and use it to solve a statewide budget shortfall.

Clark County seeks about $102 million, Washoe about $21.5 million.

Sandoval is expected to meet with Attorney General Catherine Cortez Masto to discuss specifics of the requests and will bring the issue to the Board of Examiners, a group that includes Sandoval, Masto, and Secretary of State Ross Miller.

If they decide not to pay the money, the counties could take the issue to court.

"As far as I'm concerned, it is extremely important, and I'd advocate going to court," Clark County Commissioner Steve Sisolak said.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.