(CN) - The Nevada Supreme Court has declined to force the Clean Water Coalition to hand over $62 million to the state's coffers as part of a bid to balance the cash-strapped state's budget. The court's decision to deny the state's writ of mandamus returns the case to the district level, where the constitutionality of the state's actions will be determined.
After a brutal special session to close Nevada's $900 million budget gap in March, Nevada was hit with a pair of lawsuits to stop it from tapping into $62 million that was collected for a stalled wastewater project.
The Clean Water Coalition and M Resort want to stop the state from wiping out the coalition's budget and moving the money to the general fund.The lawsuits in Clark County Court were filed just moments after outgoing Republican Gov. Jim Gibbons signed the fund transfer bill into law to help balance the budget.
The coalition said in its lawsuit that the state doesn't have the power to take the money because it was collected from residents and businesses to address water quality issues in the Las Vegas Valley.
The M Resort says it paid about $1.5 million in sewer connection fees to the Clean Water Coalition. The casino draws a line between the definition of a tax and a fee in its lawsuit.
"A tax is a tax. And a fee is a fee," the lawsuit states. "A tax is a generalized assessment which funds generalized functions beneficial to all while fees are specific assessments designed to pay for specific functions benefitting those who pay the fee."
By transferring the money, the M Resort claims, the state "discards the distinction and converts fees paid by a subset of Nevadans into a de facto tax. More importantly, the legislation virtually obliterates any ability of the Clean Water Coalition to fulfill its function - to fulfill the only function for which the fees can be spent."
The coalition agrees that the money transfer blurs the lines between a tax and a fee.
"The funds collected by the (coalition) from a particular region and for specific purposes will be unlawfully converted to a tax, placed in the general fund of the State of Nevada, and applied to statewide debts and obligations resulting in permanent and irreparable loss and harm to the (coalition.)"
The coalition had voted recently to shelve its wastewater project for which it was collecting money, and decided instead to use it elsewhere.
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