This week, Nevada lawmakers convene for their biennial 120-day session and, following an ambitious first State of the State address from new Gov. Joe Lombardo, expectations will be modest.
The Silver State faces no shortage of challenges for lawmakers to address:
- Public officials continue to flout clear constitutional prohibitions against simultaneously holding jobs in separate branches of government.
- Public pension systems are woefully underfunded, requiring ever-increasing contributions that eat into the checks of both employees and taxpayers.
- Only one-third of Nevada’s eighth-graders are proficient in reading among native English-speakers, while that figure is just 3% for English language learners. Math proficiency is even worse.
- Meanwhile, Nevada is already a regionally high spender for education and Arizona, Idaho and Utah all produce better results while spending less.
Other issues facing the state include:
- Medicaid enrollment is expected to soon approach 1 million – a near tripling over the past decade – and Medicaid spending has quickly become the largest single line item in the state budget.
- Four-year graduation rates at the University of Nevada and UNLV are 40% and 17.2%, respectively, despite being some of the most heavily subsidized public universities in the country.
- Public employee unions exert increasing control over state and local spending, largely depriving elected officials of democratic accountability and costing taxpayers billions of dollars.
Lawmakers aren’t expected to address any of these pressing issues during the 2023 session. With heavy Democrat control of both legislative chambers and a Republican in the governor’s mansion, major reform on these key issues appears unlikely.
However, lawmakers could be poised to tweak some other policy areas.
Nevada will carry more than $1 billion in leftover reserves from multiple rounds of pandemic-era federal bailouts into the new budget cycle. At the same time, historic inflation is causing sales tax revenues to reach levels previously unheard of as the price of goods skyrockets.
Sales tax revenues are forecast at $3.925 billion for the 2023-2025 budget cycle – a 48.4 percent increase from just the 2019-2021 budget cycle. All this money likely takes new taxes off the table and has allowed Gov. Lombardo to commit to massive new spending.
In fact, the excess money allowed Lombardo to propose two minor tax cuts. First, he would cut the modified business tax – an excise tax on private-sector payroll – from 1.37 percent to 1.17 percent.
Second, he would raise the exemption on business receipts from $4 million to $6 million before firms become subject to the state’s unpopular commerce tax. This will partially restore Nevada’s allure as a destination for business growth.
Lombardo also proposed a modest expansion of Nevada’s Opportunity Scholarship program, which allows businesses to receive a tax credit for donating to scholarship-granting organizations for low-income children.
The Democratic legislature passed a bill to eliminate opportunities for low-income children during the 2019 session, but Republicans in the minority agreed to raise taxes by over $300 million in 2021 in order to save the scholarship program.
Meanwhile, in the time since lawmakers repealed language that could have given greater educational options to families across Nevada, many states have leapfrogged Nevada’s early leadership on the creation of a vibrant marketplace for education.
Elsewhere, Gov. Lombardo has asked for election-law reforms.
He proposes that mail-in ballots be sent only to individuals who request them and that mail-in ballots be received by Election Day so Nevada can tabulate winners on a timely basis. Nevada’s tardiness in tabulating results has generated unfavorable national headlines even as Democrats have lobbied to elevate the state to first in the nation for presidential primaries.
Lombardo has also asked lawmakers to implement some sort of identification requirement for voters, as most states have. The Heritage Foundation currently ranks Nevada 50th among the states in election integrity due largely to the lack of identification requirements and the ability for unrelated third parties to collect and remit ballots.
Although this represents a modest agenda for Nevada’s 82nd Legislative Session, one can be sure the rhetoric will quickly exceed policy substance and provide truculent entertainment for Nevada’s citizens.
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