With only 2-1/2 weeks left in this legislative session, things are starting to really heat up. Join Marcos Lopez for the week 15 legislative briefing as he discusses:
- Which bills Gov. Lombardo vetoed this past week and what he is threatening to veto next;
- Why Nevada Policy is opposed to the proposed Sony Pictures tax credits, and which other organizations are opposing it as well;
- Why the number of price-fixing bills this session is alarming, and what deal was made to try to stop some of them from reaching Gov. Lombardo’s desk; and
- What you can still do to support school choice this session.
To keep updated throughout the week on what is happening in Carson City, visit Nevada Policy’s bill tracker at nevadapolicy.org/bill-tracker.
Welcome to Under the Dome presented by Nevada Policy. I’m your host, Marcos Lopez, your Outreach and Coalitions Director. It is May 19th, approximately 2:01 PM. Happy second committee passage deadline. We have 18 days to go in this legislative session and we’ve already seeing the start of Saturday sessions.
Tomorrow is the deadline to settle budget differences and we do have different committees scheduled. We can expect from here on out that every Saturday would likely have some sort of hearing. If you’re planning Memorial Day plans and you’re involved in the legislative session, I can assure you do not make those plans because they will meet on Memorial Day.
Main topics that we’re going to cover this week are governor warming up his veto pen, the Sony pictures deal, and the rise of lunkhead economics. Next week we will actually pick through the aftermath of today’s deadline.
So, starting with the governor warming up his veto pen. On Wednesday, three gun control bills were vetoed all at once. And he sent out a very clear message that he will veto any bill that fridges on the constitutional right of Nevadans when it comes to the Second Amendment. Now normally this is not an issue that we cover in Nevada Policy. However, the implications and the message that was delivered on this is something that we need to make sure that we cover.
In particular, his Chief of Staff, Ben Kieckhefer confirmed that the governor will veto the budget if his priorities aren’t addressed. We can expect this to mean the education reform bill. He put forward the school safety bill, the election reform bill, and any modernization when it comes to the executive branch.
Overall, all five of the governor’s bills are kind of teetering on the ropes on whether they will have the chance to make it across the finish line. So, this veto threat is a very big deal. Its implementations mean that the chances of special session are extremely likely if on June 5th, at midnight when sine die occurs.
If we do not have a budget in place that will fund the government, it’ll immediately trigger an emergency special session. The legislators will have to all come back to Carson City. There’s no going home for them because June 30th is the last day of our fiscal year. It would be a massive problem where the government would not have the money to be able to pay for any services or pay any employees if it does not have a fiscal budget in place.
This is one of the consequences of us being a balanced budget state and having a balanced budget amendment in our constitution. It means they do have to make sure that the ones and the zeros all add up to be able to run the government.
This is something that we have seen multiple times over the last 20 years when it comes to split divided government in the state of Nevada. We have had Governor Kenny Guinn threatening a veto over tax rebates in 2005. We have Governor Gibbons, who made similar threats in both 2007 and 2009 over proposed tax cuts. And in 2017, the reason that we even got opportunity scholarships was the veto threat that Brian Sandoval and legislative Republicans put forward when they were trying to save the education savings account program.
So, this is a big issue, a big deal and its consequences would likely mean that we have at least one to two weeks of legislative special sessions if they do not come to some agreement by the end of June 5th.
One big issue this past week was the Sony Pictures deal. I’m sure you’ve all probably heard or read about this, but Senator Roberta Lange introduced a bill totaling 4 billion in film and development credits to Senate Finance on Tuesday.
This is the largest tax proposal for film subsidies ever introduced in our state, and its beneficiaries would be Sony Pictures, in particular Columbia Pictures, a division of Sony Pictures, which is one of the big five when it comes to media productions here in the country and in the world. The other ones would include Universal, Paramount Pictures, Warner Brothers, and Disney. You probably know Sony in particular for the Spider-Man movies, Ghostbusters, Terminator, etc.
But when we’re looking at these development credits, most of them would be going to two particular sites. One of them would be at the UNLV Tech site, located in the Southwest Valley on Sunset Road near Durango Drive near the IKEA. And the second site would be in the Summerlin area at an undisclosed location. The idea is to use these development credits to build new studio sites for any future pictures.
They’ve been looking to move away from Southern California for a while, and we are one of the states that they’re considering. So, the legislation would involve the state entering an agreement with private developers who would pay for the two film production sites.
Under the bill, production companies would apply for a transferrable credit, which can be used to offset the modified business tax insurance, premium tax, or the gaming license fee. The tax credits can be used up to 30% of any production or construction costs for films. That is up from the current threshold that is 15%.
Part of these credits would be used to fund a local workforce training and educational programs for jobs at the studios.
So, this is something that we are definitely keeping an eye on because this is, again, such a huge, massive example of our funds and taxpayer dollars being diverted to corporate interest. So, we are in opposition of it.
We were actually one of four different organizations that came out in opposition to this piece of legislation. We did have all the unions, all the local governments, and a lot of the special interest groups come out in support.
Among those that were in opposition were us at Nevada Policy, Battle Born Progress, the Progressive Leadership of Nevada, and the Nevada GOP. It was kind of a weird assortment of fellows to see those four together united in opposition to this bill. But I think it does lead to the question of where this could move forward.
Now, the reason that we are in opposition is that historical data and economic analysis consistently show that film tax credits seldom pay for themselves or compensate for the revenue loss in the process.
The very respected Tax Foundation has noted that every independent study of film tax incentives has found they don’t pay for themselves in economic growth jobs or boosted tax revenues. The same sentiment was expressed by the National Conference of State Legislatures, who found that most state studies looking at their film tax credit found the same issues with it.
Now, one major thing that I did point out in our testimony, which you can find at Nevadapolicy.org/bill-tracker, is kind of the hypocrisy from many Democrats who were supporting this bill while at the same time arguing that there aren’t enough taxes in place to fund whatever needs that they want to fund as their pet project. It kind of shows the duplicity and almost the disingenuous of their argument saying that we do not have enough money in the state of Nevada, while at the same time they’re giving it away rather than funding whatever needs that they want to fund that time.
And they’re constantly calling for higher property taxes, higher sales taxes, and you know, if they really have the chance, they’d probably move towards an income tax. So, I think this is all kind of undermines their arguments that the state does not have enough money when they’re just finding ways to literally give the money away to corporate interests.
But moving on from there, I do want to point everyone to a wonderful article on Nevadapolicy.org titled The Rise of Lunkhead Economics. Our own Director of Research, Geoffrey Lawrence, wrote a great piece highlighting a theme that has kind of approached this legislative session. You know about it because we’ve talked about it so much, and that is how much the lawmakers are trying to fix prices and just try to ignore supply and demand.
They just say that if the government can declare this is the price that you’re allowed to charge, that it will magically just work its way through the system and there’ll be no negative effects. And that supply and demand be damned. Of course, we’re seeing these found in prescription drugs, emergency healthcare services, and of course the housing rental market, which has been a major target this legislative session with about four bills still alive targeting the rental market to implement rent control.
Of course, we know that these price controls on housing lead to fewer units being built. It exacerbates the housing crisis and as they impose these many price controls all across, regardless of what the item is, all they’re doing is actually harming the people they’re intending to help by making these supplies scarcer on the market.
We are pushing for a governor’s veto on all these pieces of legislation and particularly AB 298, which I’ve mentioned the last two to three weeks as the biggest concern when it comes to rent control, just because they were some Republican defectors who voted for this piece of legislation in the Assembly. There were about eight of them.
I’m keeping a close eye on this particularly because what they told me in our meetings was that they made a deal with the Democrats that all the worst rent control bills will not move forward because they’ve traded their votes for Assembly Bill 298.
So now that a lot of these bills from the Democrats on rent control, the worst of the worst, such as SB 275 and a few others, have made it over to their side, I hope and expect to see that those rent control bills will die before reaching the governor’s desk. I, however, will not hold my breath for that action, and I am looking forward to being proven wrong if they will.
But either way, we encourage everyone to go to our Action Center. We have a new letter to oppose rent control, asking all the Republican state senators to hold together to vote against SB 298.
In my most recent discussions with legislators on this bill, the caucus seems to be united. So far, the great eight will be voting against SB 298, But until the votes are cast, we will wait and see.
I want to end with a continued call to action for Assembly Bill 400. This is the governor’s education omnibus reform bill. Particularly what we love most in there is the accountability measures and the increasing and expansion of school choice programs such as the Opportunity Scholarship Program.
We are asking everyone to direct our attention to Speaker Steve Yeager. Please write to Assemblyman Steve Yeager. If you know people in his district, definitely reach out to them. We have been urging people in his district to target him.
But we have to make sure that Speaker Yeager understands that this is something that parents won regardless of their party affiliation. And this is going to benefit the same people that he claims to represent up there in the building. These are families. These are people stuck in failing schools, these poor kids and students.
So again, we’re calling and asking everyone to please reach out to the Speaker’s office and urge him to bring a floor vote on Assembly Bill 400.
As always, you can check out our bill tracker at Nevadapolicy.org/bill-tracker, and our action center is on our homepage as well. It’s going to be a quick show today as I promise, and I hope you all guys all take care and have a great weekend. I will be back next week to update you on all the happenings on tonight’s deadline when it comes through. Thank you.
Sign up to get updates on what’s happening during Nevada’s 2023 Legislative Session.
Under the Dome: This Week in Carson City
An in-depth analysis of what is going on in Nevada’s government.
Produced by Nevada Policy,
featuring Nevada Policy’s Marcos Lopez.