LAS VEGAS (CN) – Just two weeks after a brutal special session to close Nevada’s $900 million budget gap, Nevada was hit with a pair of lawsuits on Friday, trying 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 coalition voted on Thursday to sue the state over the decision.
The lawsuits, filed in Clark County Court, were filed just moments after Gov. Jim Gibbons signed the fund transfer bill into law to help balance the budget.
The coalition says in its lawsuit 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.
“My fundamental concern is this,” said Clark County Commissioner Larry Brown, who also serves as the CWC’s chairman. “We made commitments to businesses and citizens that the money collected would be dedicated to protecting our water quality. The state’s action breaks that promise to our community.”
The coalition seeks to stop the money’s transfer. It was filed by Michael Keary with Parsons Behle & Latimer.
The M Resort’s lawsuit seeks the same injunction, but also wants damages. It was filed by Christopher Kaempfer with Kaempfer Crowell.