Governor’s office: Special session potentially needed to replenish emergency funds

Top Democrats in the Legislature disagreed with the governor, citing the millions of dollars still in the fund.

By Eric Neugeboren
The Nevada Independent

The Legislature may need to be called into a special session to shore up funding for a state account used for emergencies and unexpected costs that could run out of money, the governor’s office said.

The state is able to transfer money from certain accounts to others, but a key emergency reserve fund responsible for replenishing another account (that is low on money) is also running low on funds. Moving additional dollars into that account can only be accomplished through a legislatively approved appropriation, and the Legislature is not set to convene until February for its regular legislative session.

But top Democrats in the Legislature challenged that notion during a Thursday interim committee meeting, asserting that the millions of dollars still in the fund are more than enough to cover any emergencies.

“I don’t see any need for us to go into a special session to have to replenish those funds,” Assembly Speaker Steve Yeager (D-Las Vegas) said, referencing reporting from The Nevada Independent. “It would be a real disservice to the citizens of the state to have to go to an expensive and time-consuming legislative special session.”

Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) said she “wholeheartedly” agreed with Yeager that the funding issue should be left to a standard legislative session.

The emergency fund in question — called the Interim Finance Committee Contingency Unrestricted Account — typically covers requests for necessary expenses that the Legislature either did not fund or inadequately funded, but also serves as a replenishment for the account that serves as a backstop for other incurred expenses such as legal settlements or wildfire response. 

The fund is used because Nevada’s Legislature only meets for 120 days every two years, during which they approve a budget covering the next two fiscal years. Lawmakers continue to make spending decisions through the Interim Finance Committee, which meets in the period between legislative sessions, but any additional appropriations must be made by an act of the full Legislature — necessitating the contingency fund for unforeseen circumstances or expenses.

After Thursday’s Interim Finance Committee meeting, the account has less than $17 million remaining after starting the year with $25.5 million. The decrease was largely because of a $6.4 million payment on fire suppression costs, which lawmakers approved under the condition that the account be replenished from revenue that the state receives.

“I see that we may be in a future precarious position,” Gov. Joe Lombardo said at Tuesday’s meeting of the Board of Examiners, a three-member panel that also includes the attorney general and secretary of state. “If we were to run out of funds prior to the next legislative session, it would require a special session to reconstitute the accounts.”

That broader pool of funds can be used to replenish the Statutory Contingency Fund, which has $6.2 million remaining, less than half of its total at the start of the year. This fund is used to cover costs in other state accounts, primarily those for state-negotiated settlements and extraditions, which are both nearly exhausted.

The settlement fund — called the Tort Claims Fund — started the fiscal year with $7.2 million and has just $760,000 remaining, though it is expected to receive a windfall of about $5.5 million in premiums charged to state agencies at the start of the 2025 fiscal year in July, the governor’s office said.

The state has recently made large payments to settle cases involving the Nevada Department of Corrections. On Tuesday, the Board of Examiners approved a $1.35 million settlement to the family of a prisoner whose suicide in 2018 led to allegations of medical negligence. In March, the board approved a $3.4 million settlement to a former prisoner who received insufficient medical care.

Attorney General Aaron Ford — whose office oversees the state-negotiated settlements — said on Tuesday that there are “a lot of claims pending” that will require more money than the fund has.

“We’re going to need more money for the tort claim fund before the year is out,” he said.

Updated on 4/11/24 at 1:08 p.m. to include perspectives from Democratic legislators and 1:42 p.m. to include decisions made at the IFC meeting.

Reporter Tabitha Mueller contributed to this story.