Budget Issue Prompts Nevada Bond Delay

Nevada Budget Crisis
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State Treasurer Brian Krolicki says the sale of $200 million in state bonds for items such as parks and cultural resource will be delayed indefinitely due to the state's uncertain financial situation.

"Without the state budget being clarified at this point, I believe it would be highly imprudent to proceed with the sale of these bonds," Krolicki said.

The Legislature is expected to address budget concerns in a special session that starts Wednesday. It's the second special session since the regular 2003 session ended June 2.

Of the $200 million, $92.5 million would go to finance open spaces, parks and cultural resources. The other bonds were being sold to refinance previous bonds that were issued at a higher interest rate, Krolicki said.

Krolicki said he did go forward with the sale of nearly $180 million in transportation bonds to use for such projects as road work on U.S. 95 in Las Vegas and other highways in Carson City and Reno.

He said the 10-year bonds sold for a "historically low" interest rate of 2.7 percent.

The sale of the transportation bonds could go forward because the revenue to pay off the debt is pledged by gas taxes and federal government reimbursement programs and not other state general fund
money, he said.

Krolicki said after he talked with rating agencies about the sale of the $200 million in general obligation bonds, he determined it was "not fiscally sound to proceed" with the sale.

The deadlock over taxes and the state budget also held up passage of a bill to funnel $1.6 billion into local school districts over the next two years.

The state also can't dispense $3.3 million in remediation funds to schools in need of improvement. Doug Thunder, chief financial officer for the state Department of Education, said that money is included in the bill that's sitting in the Legislature.

(Copyright 2003 by The Associated Press. All Rights Reserved.)