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.
That fund — 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.
That account will have less than $17 million remaining if ongoing funding requests go through (and other requests are in the works) after starting the year with $25.5 million.
“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, April 9, 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.