Clark County sues Sandoval over $102M in diverted funds

LAS VEGAS (AP) - Clark County has filed a lawsuit against Nevada Gov. Brian Sandoval and state officials to recoup $102 million that the state diverted to its own coffers in 2009 to plug a big budget hole.

In the suit filed in Clark County District Court, county officials argue that last year's Nevada Supreme Court ruling over a similar raid on a local water fund requires the state to return the money.

"I am disappointed that after months of negotiating, we have not been able to reach an agreement," County Manager Don Burnette said.

A law passed by the Legislature in 2009 required the state's two largest counties, Clark and Washoe, to give up 9 cents per $100 in assessed valuation collected in property taxes to the state.

But in 2011, the Nevada Supreme Court ruled the state could not siphon $62 million from the Clark County Clean Water Coalition to pad state coffers two years earlier. Until then, taking money from local governments was a common state budget-plugging tactic.

Justices ruled that the practice amounted to a special tax and was unconstitutional.

The ruling at the time punched a gaping hole in Sandoval's budget proposal because he had relied on similar money grabs to balance his two-year spending proposal. Instead, he agreed to extend $620 million in temporary taxes that would have otherwise expired.

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

In an email, the governor's press secretary, Mary-Sarah Kinner, said Sandoval's administration "is extremely disappointed in the Clark County Commission and its manager."

Clark County Commissioner Steve Sisolak said he had hoped to avoid 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."

Washoe County in Northern Nevada last year also sent a letter to the state demanding repayment of $21.5 million the state had diverted from its funds. The county "has been working with the governor's office on this issue and currently is in active negotiations for the settlement of our claim," spokeswoman Nancy Leuenhagen said Thursday in an email.