Governor Working On Stimulus Waiver To Provide Greater Flexibility In Use Of Stimulus Dollars

Governor Jim Gibbons said he is working with staff and others to determine if a request will be sent to the United States Secretary of Education seeking a waiver of certain maintenance of effort requirements in order to trigger federal funding.

Governor Gibbons issues the following statement:

“For the past several weeks I have been deliberating whether to seek a waiver of maintenance of effort requirements set forth in Title XIV of the ARRA (American Recovery and Reinvestment Act of 2009). Such a waiver would provide the State greater flexibility in the allocation of Title XIV dollars. My stimulus working group and my staff have been hard at work determining the specific procedures needed to request a waiver. The working group includes representatives from both the Nevada System of Higher Education and the State Department of Education and those representatives have been working with my staff to solidify an agreement on statutory support for both institutions. The task of reviewing the ARRA has been especially challenging in light of the lack of federal guidelines. Nonetheless, the legislative session is already well underway and undoubtedly it will take the federal government some time to evaluate and decide upon any waiver request under Title XIV, highlighting the need to expeditiously determine whether a waiver makes sense. My office is evaluating the need to seek such a waiver and I will be making an announcement early next week outlining whether a waiver will be sought and outlining the fiscal ramifications of the grant or denial of a waiver request.”

Section 14012 of the ARRA provides that a state may apply for a waiver or modification of maintenance of effort requirements set forth in Title XIV of the ARRA if a state has “experienced a precipitous decline in financial resources . . .” Title XIV of the ARRA details appropriations of the State Fiscal Stabilization Fund, which is primarily allocated to K-12 and higher education. Due to revenue shortfalls, the Nevada System of Higher Education is proposed to be funded at levels below the required maintenance of effort levels set forth in the ARRA. WWW.NV.GOV
 

Governor’s Podcast Renews Call For Legislative
Honesty And Openness On Taxes
 
Certain legislators should start specifying their tax hikes
 

Governor Jim Gibbons’ newest podcast again calls upon the Legislature to start giving citizens an honest and sincere picture of the new taxes and tax hikes they are planning. “Taking affirmative steps to hide proposed tax hikes from the citizens is true cowardice on the part of Senator Horsford and certain other members of the legislature,” Gibbons said, “Senator Horsford and his tax-hiking colleagues should show at least some honor and integrity by getting their tax hike plans out in the open so the public knows just what he and his associates are planning.”

“There is no excuse for Senator Horsford and his cohorts to wait any longer,” Gibbons said, “He keeps making excuses about waiting for new tax revenue figures that won’t be available for weeks or months, this is clearly an attempt to mislead the citizens and hide certain legislators’ true ‘tax hike’ agenda.” Recent tax revenue figures show Nevada’s economy is still in crisis and Gibbons believes the people of our state should not have to wait while certain legislators delay information and deceive the citizens.

Gibbons also noted that tax hikes during this tough economic time will kill jobs and will needlessly delay much-needed economic growth in Nevada. “These certain legislators who are promoting an array of tax hikes need to look beyond the next day into next year and the next decade and beyond,” Gibbons said, “If they do that, they will take their job-killing and recession-extending tax hike plans and throw them away, then we can all work together to solve Nevada’s economic crisis. Our citizens deserve nothing less.”

Governor Gibbons’ podcasts can be found at www.nv.gov and click on the “podcast” link.

Print version of Governor’s Podcast on Taxes (pdf)

Governor Responds To Comments By Senators 

Governor’s statement on comments made by Senator Horsford and Senator Raggio with respect to I.P. 1:

“I have always made it clear that I do not support tax increases. I have also always said that despite my personal opinion on the matter, I will respect and abide by the will of the voters. I was the first elected official to publicly recognize the significance of the votes on the room tax question in November and put that proposed increase in my budget submitted to the Legislature on January 15, 2009. I was the first elected official to realize that the will of the voters can and should be part of the solution to the severe budget deficit facing the state. I included that tax increase in my proposed budget reluctantly as I don’t believe raising taxes is the way to get Nevada out of an economic recession. Many legislators, Senator Horsford and Senator Raggio included, have publicly stated that they also reluctantly supported I.P. 1 (the Room Tax Bill). They chose to express their reluctance in public statements, and I have chosen to express my reluctance as many previous Governors have on other matters, and as I did on other bills last session, by allowing I.P.1 to become law without my signature. If Senator Horsford considers the Governor of this State a “coward” for refusing to be an ardent supporter of a tax increase, then I think our new Senate Majority Leader has made it perfectly clear to Nevadans that he not only plans to raise taxes, but intends to do so with great zeal and enthusiasm.”

Governor Takes First Step To Accept Stimulus Funds
Gibbons sends certification letter to President

Governor Jim Gibbons delivered Nevada’s American Recovery and Reinvestment Act of 2009 (Stimulus Package) certification letter. Governor Gibbons assured the President that the Stimulus Package funds will be used to create jobs and promote economic growth. This step is part of the requirements for states to receive Stimulus Package Funds.

While taking the first steps toward receiving the stimulus funds, Governor Gibbons also expressed reservations in the letter to President Barack Obama that the Stimulus Package returns money to Nevada in an amount significantly lower than the state pays to the federal government, making Nevada a “donor state”. Gibbons also believes that the Stimulus Package falls short of Nevada’s needs because of stringent strings attached to certain stimulus funds.

The letter from Governor Gibbons to President Obama is attached.

Governor Jim Gibbons sent a letter to the United States Secretary of Education officially requesting a waiver of maintenance of effort requirements in the American Recovery and Reinvestment Action of 2009 (Stimulus Package). 

In order to access the State Fiscal Stabilization Fund in the ARRA, states must maintain funding for K-12 and higher education at or above funding levels in 2006.  This is commonly referred to as a “maintenance of effort” requirement.  Nevada has been allocated $396 million from the State Fiscal Stabilization Fund.  Of that amount, $324 million must be distributed to K-12 and higher education. 

While K-12 education in Nevada meets the ARRA’s maintenance of effort requirement, proposed funding for higher education does not.  Because of the severe revenue shortfall facing state government in Nevada, the Governor has asked for a waiver for higher education to trigger access to the State Fiscal Stabilization Fund, which will allow the Governor and Legislature greater flexibility in restoring budget reductions to both K-12 and higher education, and to other aspects of the state budget as well.

Without a waiver, Nevada would be required to appropriate several hundred million dollars to higher education in order to access the State Fiscal Stabilization Fund. Such a requirement consequently would prohibit Nevada from using significant stimulus dollars to restore other budget items, such as healthcare funding.  “When other governors and I met with President Obama, we asked that states not be tied up with strings and chains making it difficult for hard-hit states like Nevada to qualify for help,” Gibbons said, “The ARRA ended up including several preconditions to obtain funding, but we remain hopeful that in the spirit of fairness Nevada will be granted a waiver so I and the Legislature can appropriate stimulus dollars with greater flexibility.

Governor Gibbons also noted Nevada’s dire financial crisis and requested that the Secretary of Education act as expeditiously as possible so that funds allocated to Nevada can be accessed immediately to protect and preserve all levels of education in Nevada.

(Editor’s Note:  Letter to the Secretary of Education.)