CARSON CITY – The Nevada Supreme Court has ruled the Legislature's $62 million grab from the Clean Water Coalition in Clark County was unconstitutional.
The unanimous ruling punches another hole in the already slim state budget. The money had been included in Gov. Brian Sandoval’s spending plan.
To help solve the state’s budget problems, the 2010 special session of the Legislature passed a law to require the coalition to turn over $62 million to the state.
The court’s decision prompts two big questions at the local government level: Will sewer ratepayers get a refund since the Clean Water Coalition has been dissolved and doesn’t need the money? And should local governments and schools start worrying about more budget cuts, since the state will be looking to fill that $62 million hole?
Ratepayers from four jurisdictions paid into the Clean Water Coalition — Las Vegas, Clark County, North Las Vegas and Henderson. If the $62 million is refunded to those jurisdictions, spokespeople for each governmental body said the county could expect around $30 million, Henderson about $8 million, North Las Vegas about $6 million and Las Vegas close to $20 million. The exact figures are not yet known.
As to whom will get that refund, at the county level the decision will be made by Clark County commissioners.
Based on a recent decision by the commission to refund some other Clean Water Coalition money to taxpayers, and because the political consequences of keeping the $31 million could be dire, it’s unlikely it will do anything except refund the money.
“I think that’s safe to say,” said commission Vice Chairman Steve Sisolak.
There’s no telling what the other local governments will do with their smaller refunds. There’s also no clue as to whether the high court’s decision will lead state lawmakers to take more money from local governments to prop up the state budget.
County Commissioner Larry Brown, chairman of the Clean Water Coalition board, welcomed the court’s decision. He also said county staff and commissioners want “to be part of the solution” to the state’s budget crisis and will continue talking to lawmakers until the end of the session.
In addition, Don Burnette, Clark County manager, said county “are very committed to working with the Legislature to resolve their issues without making the problems worse.”
The coalition collected money from residents in Clark County to design and build an $850 million system to carry treated sewage into Lake Mead. The project was suspended in December 2009 due to the economic decline and lack of growth in Southern Nevada. The coalition is now studying how the treated effluent might affect Lake Mead.
In a unanimous opinion written by Justice James Hardesty, the court said the Legislature has “considerable lawmaking authority” under the Nevada Constitution. But the court said there are restrictions on that power.
The court said the Legislature is prohibited from enacting local and special laws for the assessment and collection of taxes for the state. The state constitution requires laws to be general and uniform throughout the state, the court said.
According to the ruling, the Legislature violated the constitutional requirement when it singled out the Clean Water Coalition and took money collected only in Clark County.
The ruling reverses the decision of District Judge David Barker, who ruled in favor of the Legislature.
The coalition was created under an agreement with the Clark County Water Reclamation District and the cities of Henderson, Las Vegas and North Las Vegas. Those local governments collected money from residents on their sewer bills and turned it over to the coalition.
Joining the water coalition in a lawsuit against the state were the M Resort, Ovation Development Corporation, Jet Hangars, Sun City Summerlin Community Association and the Henderson Chamber of Commerce.
The 2010 law that required the water collation to turn over the $62 million said the money would be put into the state’s general fund for unlimited use. The coalition never surrendered the money during the legal battle.
The court said the act of the Legislature violated three sections of the Nevada Constitution, “which prohibits local and special laws that assess and collect taxes for state purposes.”
Hardesty, in the 32-page opinion, said the court agrees the state had a statewide budget crisis but the Legislature couldn't single out the Clean Water Coalition to help solve it.