Sandoval aide: Budget gap nowhere near $326 million

CARSON CITY -- Gov. Brian Sandoval's $5.8 billion proposed state budget does contain a revenue shortfall, but it's nowhere near the $326 million cited by Democrats last week, a top aide said Monday.

"There won't be a large gap," Sandoval's chief of staff, Heidi Gansert, said at a news conference. "We will address it as we move through the session."

Gansert refused to give an exact figure for the revenue gap in the proposed budget. In education, Sandoval has suggested that districts statewide divert $425 million in bond reserve funds to school operating costs over the next two years.

Gansert said the administration intends to meet Wednesday with Clark County School District officials to discuss how much of their bond reserves could be switched to the operating costs of schools.

But district Chief Financial Officer Jeff Weiler informed legislators in January that his district does not have any bond reserves to spare. Those funds -- secured through property taxes -- will be needed to pay off a $3.5 billion bond issue approved by voters more than 10 years ago, he said. The bond program financed new school construction and renovation in the nation's fifth-largest district.

Sen. Sheila Leslie, D-Reno, said Monday that she has asked state Budget Director Andrew Clinger to attend Thursday's meeting of the Senate Revenue Committee and reconcile the differences between what school districts have said and what the governor has proposed.

Leslie said legislative fiscal analysts contacted school districts and found that only $99 million in bond reserves statewide could be used for school operating costs. Sandoval has estimated that more than $300 million would be available in Clark County alone.

"It is clear there is a hole," Leslie said. Everyone makes mistakes. They have to admit they made a mistake and submit an amendment to their budget. I expect an answer Thursday."

Legislative estimates indicate the governor's budget will be 7.5 percent short if bond reserves aren't used to cover school operating costs, she said.

Gansert said the administration determined that $425 million in bond reserves could be diverted to school operating budgets through conversations with school district officials.

When questioned by reporters, Gansert did not accuse school districts of lying to the administration.

"We have two different forecasts and we need to reconcile them," she said.

If there is a modest shortfall, Gansert said it could be made up through money that would be available if state tax revenues continue to be higher than the forecasts built into Sandoval's budget. She added another $67 million may be available because President Barack Obama wants to delay by two years the date when states begin paying interest on federal loans they secured to cover unemployment compensation costs.

Leslie said the administration is trying to use "budget maneuvering," such as taking bond reserves and borrowing against insurance premium tax revenue, to avoid the need "to reform our tax system."

Contact reporter Ed Vogel at evogel@reviewjournal.com or 775-687-3901.