The checkered flag is poised to start waving as state lawmakers enter the final month of the legislative session with a host of major policy and budget issues still unresolved, from repeal of the death penalty to raising taxes on the mining industry, wholesale changes to the K-12 funding formula and many other big-ticket items.
Tuesday’s meeting of the Economic Forum — the panel of five economists who forecast expected state tax revenue — is generally viewed as the green light for a host of budgetary issues and major bills to move to the finish line before the clock strikes midnight on sine die, May 31.
Most indicators are that the improving economy, coupled with rising COVID vaccination rates, will boost state tax revenues above what the Forum forecasted in December — about $8.5 billion over the next two fiscal years, or about $500 million less than the last two-year budget cycle.
Legislators have nonetheless proceeded based on the less-rosy budgetary picture, making tough cuts to education and health care programs that at times drew heated debate. While a recovering economy is expected to help alleviate some of those previously identified cuts, lawmakers say they’re still waiting on the bigger piece of the puzzle — U.S. Treasury guidance on how the state can spend the roughly $2.9 billion allocated through the recently passed federal American Recovery Act.
But without guidance soon, legislators say it's almost a guarantee that a summer special session will be needed to make a decision on how to dole out the one-time federal windfall.
“Every day from this day forward, we're running out of time,” Senate Finance Committee Chair Chris Brooks said. “(If) that happens at a certain point ... the only way we can do it is to close the budget, and then fill it back in at a later date, just because we'll run out of time.”
Gov. Steve Sisolak’s Chief of Staff Michelle White echoed those comments, saying that the governor’s office didn’t want to recommend allocating general fund dollars to needs that may later be met by an influx of federal funds — even on topics that might attract bipartisan support, such as funding a replacement unemployment insurance system, a broad expansion of preschool and more. Beyond the flexible $2.9 billion, other pots of federal funding with more specific earmarks are also expected.
“The governor wants to make sure that that's a process that can go through the appropriate budgetary process, and with the Legislature having full input,” she said. “We hope that's the case.”
Outside of the budget, legislators are beginning their typical ritual of rolling out ambitious bills in the waning days of the session, including a state-based public health insurance option, fixes to the oft-criticized unemployment insurance system, and a major transmission and electric vehicle omnibus bill. They’re also making progress on behind-the-scenes negotiations, including on a much-publicized effort to raise mining taxes and implementing a wholesale change to the decades-old K-12 funding formula.
But hopes in early May can often turn to tears by June, with many landmines and potential pitfalls awaiting lawmakers and major pending legislation. Here’s a look at the state of play for some of the biggest proposals on tap for the last month of the session.
The question of a potential mining tax hike has simmered in the background through the first three months of session. There’s been little public movement from lawmakers, but three proposed constitutional amendments raising the industry’s constitutional rate cap are playing the role of Chekov’s gun.
Though progressive advocates are clamoring for lawmakers to move forward on AJR1 — striking what they call the mining industry’s sweetheart deal in the Constitution and imposing a 7.75 percent tax on the gross proceeds of mining companies — discussions are ongoing about a potential deal that would lead to lawmakers dropping the proposed amendments in favor of a more immediate tax change.
Democratic legislators appear wary of sending a mining tax resolution to the 2022 midterm ballot and stirring up rural angst at a time when Gov. Steve Sisolak and other high-profile Democrats are up for re-election. The mining industry may also be wary of a ballot measure — voters in 2014 narrowly defeated a ballot question removing the language in the Constitution capping mining taxation, but that victory for the industry came during a midterm election that favored Republicans and had particularly low turnout (though many expect the 2022 midterms to be difficult for Democrats as well, given that the party controlling the White House historically does poorly in midterm elections).
“I said even last special session that if we can find common ground and some compromise that would avoid us having an expensive … exercise on the ballot, that we will certainly be open to that, and we still are,” Assembly Speaker Jason Frierson (D-Las Vegas) said on Monday.
Negotiations are still fluid — meaning things could easily collapse between now and the end of session. But lawmakers, including Senate Finance Chair Chris Brooks (D-Las Vegas), say that some sort of immediate mining tax increase may be the “best and only option” to raise revenue this session.
“I would prefer to see a collaborative approach between the industry and the Legislature to come up with a change in the current [taxation] structure that they have,” he said. “That would be a sustainable way to put money into our budgets in the short term, and not many years from now. I'm supportive of that approach.”
But any struck deal will lead to a math problem — lawmakers need at least a handful of Republican votes in the Assembly and Senate to clear the needed two-thirds threshold for a tax increase.
One of Republicans’ most prominent concerns when the proposed constitutional amendments emerged over the summer was that the mining industry was surprised by them; this time around, the industry is at the table for discussions. Republican leaders in both chambers have not completely closed the door on a tax increase, but said they want more input in the process and would want any revenue hike be narrowly tailored and go to specific programs or functions amenable to both parties.
“I think that all tax bills should have been discussed from the get-go,” Senate Minority Leader James Settelmeyer (R-Minden) said in an interview. “I don't think it's proper to bring anything with 30 days left and say, ‘Oh, here you go. We made the deal, and now we want you to vote for it.’ Why not have a discussion with us?”
State-based public option
One of the most heavily lobbied issues over the last month of the session will be the effort to implement a state public health insurance option — requiring insurers that bid to provide coverage to the state’s Medicaid population to also apply to offer a state-backed public option plan.
SB420 was introduced in the Senate on Wednesday and sponsored by Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) and has already been scheduled for a hearing Tuesday.
The legislation — dubbed “CannizzaroCare” — comes from public option efforts in past sessions, including a 2017 effort to allow Nevadans to buy into the state’s Medicaid program, (which the Legislature approved but that was vetoed by Gov. Brian Sandoval), and a 2019 study lawmakers approved to look into the possibility of allowing Nevadans to buy into the state’s Public Employee Benefits Program (PEBP) health plan.
The legislation is backed by a cadre of public health groups (including health districts in Washoe and Clark counties) and progressive organizations, but has attracted an organized opposition effort from doctors, hospitals and health insurance panning the legislation as an “unaffordable new government-controlled health insurance system.”
Death with dignity
The latest in a long line of efforts to legalize a process allowing terminally ill patients to self-administer life-ending medication prescribed by a physician hasn’t made much movement since it was referred without recommendation out of committee by the first committee deadline in early April.
The bill, AB351, was referred to the Assembly Ways and Means Committee shortly after, where it’s sat ever since. But bill sponsor Edgar Flores (D-Las Vegas) said he was confident about the bill’s chances — adding that he expected it to come up for a hearing and likely vote at some point once the budget committee finishes processing more straightforward agency bills.
“Eventually we'll have an opportunity to have a hearing there, and then hopefully get it to the floor,” he said. “And I'm confident that that's where it's at now. Obviously, things may change, but I think that's where we're at now.”
Flores said he had also spoken with the state’s Department of Health and Human Services, and believed the agency would take its fiscal note (estimated cost to implement) off the bill.
The concept has divided lawmakers, and not always along strict party lines. Assembly Minority Leader Robin Titus (R-Wellington) said she had struggled with the bill; her libertarian side supported giving patients those rights, but thought that many of the concepts including limiting a coroner’s investigation and timelines in the bill were improper.
“I have real issues with those things, apart from my struggle with does a person have a right to decide how they end their life,” she said.
Members of the Assembly recently voted along party lines to abolish the death penalty, pushing the proposal as far as it’s ever been in Nevada after fits and starts in recent sessions. But the bill hasn’t been touched in the Senate, where both the committee chair responsible for processing it and the Senate majority leader are prosecutors whose boss — Clark County District Attorney Steve Wolfson — has been vocal in favor of keeping capital punishment.
Gov. Steve Sisolak has at times expressed unqualified opposition to the death penalty, and on other occasions said he would support it for extreme cases, such as the Oct. 1 mass shooting.
Senate Judiciary Committee Chairwoman Melanie Scheible has said that the bill could move forward if the sponsor can come with an amendment that is acceptable to the governor, but bill presenter Assemblyman Steve Yeager — while acknowledging he wants to make progress — says he’s not sure whether he and abolition supporters would accept a watered down version of the bill.
Others, including leaders of the Nevada State Democratic Party, say the onus is on senators to at least give the bill the courtesy of a hearing. In a video not widely circulated before this week, Scheible affirmed unequivocally at the Battle Born Progress Progressive Summit in January that she supported the quest to end the death penalty.
Republicans have latched on to one of the most prominent failings of the executive branch — massive backlogs in an inundated unemployment claims system — as one of their top priorities this session. Lawmakers of both parties often mention the emails they have received from claimants desperate for stalled benefits.
Senate Republicans have met with claimants in the glitchy Pandemic Unemployment Assistance (PUA) and hinted for weeks that they would introduce legislation to address issues identified in a lawsuit brought by PUA claimants, such as the lack of communication between a regular unemployment and PUA computer system. They also have been publicly critical that the Department of Employment, Training and Rehabilitation loan policy bill, SB75, makes technical changes to the regular unemployment program but does not speak to some of claimants’ marquee complaints.
Though Republicans’ bill, SB419, dropped last week, Senate Finance Committee Chairman Chris Brooks described it as a “stunt” and likely dead on arrival because it proposes spending $40 million from the strained general fund on a multi-year modernization project.
Brooks said the ambitious project should wait until the latest round of federal funding comes through. Democrats have listed a modernization project as a top priority in a framework on how to spend the money, and say they expect the federal guidance will allow such a use.
White said Democrats are in agreement with recommendations made by a governor-appointed unemployment strike force led by former Assembly Speaker Barbara Buckley.
“We have to make sure that anything that we've identified last year that could be better, that we're making all efforts to change now that funding … will be available, pending eligibility,” White said.
DETR officials have said it could take up to a year to design a request for proposals laying out exactly what the state wants out of the IT overhaul. In the meantime, the governor’s budget proposes a modest $1 million over the biennium for contractors to help resolve close to 2,000 technical issues of various sizes within the benefits system.
Release of the long-awaited report from the statutorily-created Commission on School Funding last week laid bare what many lawmakers and public education advocates have long suspected — moving Nevada to the national average in per-pupil school funding will cost more than $2 billion over a decade and hundreds of million of dollars in additional revenue every year.
The report recommended that lawmakers implement major changes to the current sales and property tax systems, but those general proposals have largely fallen flat. On property tax changes, Brooks said he “absolutely” agrees changes are needed but “I don't think now's the time to do it” as the state continues to recover from the COVID-19 pandemic.
Frierson in a previous statement panned the sales tax as regressive but signaled support for restructuring the mining tax and bringing in revenue from short-term rental companies such as Airbnb.
"With regards to other revenue structures, many take time and robust stakeholder outreach and that has not been something we have had during this session," Frierson said.
Still, lawmakers are moving forward with plans to accelerate a shift to the new “Pupil-Centered Funding Formula,” an update to the dated past funding formula initially approved by legislators in 2019. Many of those budget details, including promises to implement various hold harmless protections to avoid massive overnight funding losses for rural school districts, are still in the works.
Some Republicans have expressed openness to increase funding for education if it has direct ties to student outcomes and is allocated in a transparent manner; they fear that it could otherwise be swept up into collective bargaining agreements. They also have bristled at the shift toward the new funding formula, which has reshuffled the deck on some of their party’s most significant legislative accomplishments — a series of “categorical” programs targeted toward specific student groups with special needs that flourished under unified Republican control of the governor’s office and Legislature in 2015.
Settelmeyer cautioned that Republicans would only be likely to support tax increases directly tied to targeted education spending (the so-called “categoricals,” which include programs such as Read by Grade 3, and Zoom and Victory schools). He said the odds of starting a discussion on a “bipartisan way of how to get there” didn’t bode well at this late stage in the session.
“That's nothing new. Education has always wanted more money,” he said. “Republicans have shown consistently, if it goes to a purpose, we'll have a discussion. You want it to just go to the same system? I think we tend to be a little bit less likely to agree.”
A bill to authorize cannabis consumption lounges seeks to resolve a longstanding conundrum in the state — that using cannabis is legal, but consuming it anywhere outside a private home is illegal. It stands at odds with an assumption that drove much investment in the Nevada marijuana industry — that tourist consumption would make the Silver State’s cannabis industry punch above its weight.
The measure, AB341, is described — even by the director of the Cannabis Compliance Board — as the most promising vehicle for diversifying an industry with upper ranks that skew white and male. “Social equity” elements of the bill would give a competitive advantage to lounge operators who have been adversely affected by the War on Drugs, bringing new players into an industry characterized by extremely high barriers to entry and fierce competition for a limited number of licenses.
A similar consumption lounge concept failed late in the 2019 session, but that was before the Cannabis Compliance Board had formally assumed regulatory oversight of the industry. Proponents are optimistic that with a focused regulatory body in place, the state is now ready to take a step toward lounges.
The bill has been parked in the Ways and Means Committee because of the estimated $3 million the Cannabis Compliance Board would have to spend to support the projected 30 new positions needed to regulate scores of consumption lounges. Marijuana regulation is generally self-supported by licensing fees, although the board has not yet estimated how much revenue the lounges would bring in to balance out the ledger.
“I'm hopeful it's gonna move,” said Assemblyman Steve Yeager (D-Las Vegas), the bill’s sponsor, adding that it would likely be one of the last things finished in the session. “I just think it's gonna sit there for a while, because we have to close sort of everything else … before we can really have a discussion about what might be available to satisfy that fiscal note.”
Another potential wrench in the wheels is that the bill requires a two-thirds majority vote, which means it’s possible Republican-raised concerns about people driving after consuming marijuana could sideline the bill.
Asked about the possible reemergence of a policy allowing coveted dispensary licenses for applicants who did not win them in a contentious 2018 licensing round, Gilles said the governor’s office is not committing to any policies on that front, citing many moving parts, including ongoing litigation.
“I will be happy to engage in any conversations with folks if there's a proposal that's worth ... being worked through the Legislature that's going to resolve everybody's issues and everybody's concerns,” he said. “I don't know that that's possible.”
One of the biggest remaining policy-focused bills yet to drop is Sen. Chris Brooks’ forthcoming major energy policy bill, which is expected to be introduced sometime this week.
Brooks has described the provisions of the bill in past interviews — it will require a $100 million investment by NV Energy to facilitate greatly expanded electric vehicle charging infrastructure, while doubling down on transmission infrastructure — aimed at finishing NV Energy’s proposed Greenlink transmission project, which utility regulators partially approved in March.
On Friday, Brooks said that those portions and others previously described — including adoption of “tenant solar,” allowing utility-scale battery storage projects to access renewable energy tax abatement programs, and moving the state to a larger wholesale electric market would all be included in the legislation.
Brooks reiterated that there were no surprises in the forthcoming bill, and he said the goal was to start the state on major transmission projects as soon as possible — saying that while the Public Utilities Commission made the right choice in the most recent transmission case, lawmakers needed to sign off on any major policy push toward greater transmission infrastructure.
“It’s not the PUC’s job to encourage economic development in the state of Nevada, it's the PUC’s job to keep the lights on,” he said. “And so the argument that we need transmission, so that we can become a regional hub for transmission in the West, and so that we can attract economic activity to our state, is not necessarily the regulator's job... it's the policymakers and legislator’s jobs and the governor's job to give that message.”
Housing and rental assistance
Gov. Steve Sisolak has said that the state extension of the eviction moratorium, which runs through May at the state level but is backed up by a federal moratorium that lasts through June, will be the final one. But lawmakers are working on a bill that creates a “glide path” from the eviction ban into normalcy, and ushers out the hundreds of millions of dollars the state has received in rental assistance but has struggled to get out to people quickly.
“As we're coming up to the end of the moratorium, we need to figure out a way to even further ... perfect the way in which we get those dollars into the hands of landlords,” said Scott Gilles of the governor’s office.
Gilles said the governor’s office doesn’t think they can get around a federal government restriction that prevents payments directly to a landlord — with no tenant involvement — but the legislation aims “to ensure that a tenant who wants to engage and take advantage of the rental assistance dollars will ultimately have that opportunity.”
Assemblyman Steve Yeager (D-Las Vegas) said discussions include how “we can slow the eviction process enough so that the monies that are there get used” and whether there are other pots of less-restricted money that could help tenants who don’t qualify under newer, stricter federal rules setting income limits or landlords who are having trouble securing the required tenant cooperation.
It’s still unclear whether the bill would have provisions that prevent landlords from immediately evicting a tenant after receiving overdue back rent through the assistance program.
“We're looking at … whatever options are there to keep people in their homes and if there's some enticement for a landlord to be paid these dollars or ... have some sort of agreement going forward through the mediation program,” Gilles said. “Obviously that's the intended result.”
State worker collective bargaining
Another potential hurdle in the rush to finish the session will come in the novel process of approving collective bargaining agreements for state workers — the first-ever undertaking since lawmakers expanded bargaining rights to state employees in 2019.
In theory, the bargaining units (representing a swath of state workers) are supposed to come to a tentative agreement with the state’s Department of Administration, go for approval to the state’s Board of Examiners (composed of the governor and other statewide elected officials), and is then transmitted to the Legislature as a budget amendment, prior to the end of session.
However, a spokeswoman for the Department of Administration said Friday that only one agreement (with the Nevada State Law Enforcement Officers Association) out of the seven recognized bargaining units is ready to go before the Board of Examiners.
The agency said it does not “currently have a timeline” for bringing forward agreements with bargaining units represented by AFSCME (which represents four) and is still negotiating tentative agreements with two other units — the Battle Born Fire Fighters Association and Nevada Police Union.
The 2019 legislation authorizing state workers to collectively bargain also contains provisions giving the governor the final say on wages or other monetary compensation despite any approved collective bargaining agreement.
White said that the main focus right now was timing, and getting budget amendments over to lawmakers with enough time to spare before the end of session.
“Anyone could look at it right now with 30 days left and say that's a tight timeline, and it is a tight timeline but, we feel confident in our partnership throughout this process to negotiate in good faith and get everything done that we can possibly get done in these negotiations and agreements,” she said.
Right to Return
A bill presented by Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) that guarantees hospitality workers the right to return to the job they lost during the pandemic has not advanced since it had a public hearing in early April. But the measure, SB386, has a waiver that exempts it from legislative deadlines, and parties have been negotiating to address stark disagreements between union and business interests.
“Our whole goal is making sure people can get back on the job and so it's something we're monitoring. I think there are some real, real challenges that people are trying to work through. And that's kind of the last update I've had on it,” White said on Saturday. “So I think we'll see. I think it's something that folks want to find a resolution on.”