Business, education meetings dominated Sisolak's calendar amid legislative session

Governor-elect Steve Sisolak and his wife, Kathy, tour the Governor's Mansion in Carson City

In retrospect, May 21 was one of the most important days of the 2019 Legislature.

A bill getting rid of a scheduled reduction in the state’s payroll tax was introduced for the first time; lawmakers voted out bills adding Nevada to the National Popular Vote Compact (later vetoed) and decriminalizing abortion; and long-awaited hearings were finally held on bills creating a cannabis regulatory agency and substantially overhauling the state’s K-12 education formula.

Gov. Steve Sisolak was similarly busy on May 21, but for different reasons. Amid a packed schedule that saw him attend a wildfire status briefing and the cannabis bill hearing, the governor was also busy on the second-to-last Tuesday before the end of the Legislature calling several high-profile business and gaming executives — Eldorado Resorts’ Gary Carano, Peppermill Resorts President Billy Paganetti and Ultimate Fighting Championship COO Ike Lawrence Epstein.

Described by his office as general check-ins, the scheduled calls were part of a slew of calls made by Sisolak as the legislative session drew to a close, indicating that the governor kept open lines of communication with top business leaders even as lawmakers approved bills raising the minimum wage and requiring large private employers to offer paid sick leave — panned as anti-business by Republicans. 

Those meetings and others held between Sisolak with high-powered lobbyists, legislators with major pending bills, federal government officials and a slew of well-known business leaders were revealed in a public records request submitted by The Nevada Independent for the governor’s calendar through the legislative session.

Meetings scheduled in Sisolak’s calendar don’t necessarily confirm that they actually happened, and often provide few details as to the point or reason for them. But information on the scheduled meetings of the state’s first Democratic governor in two decades provides insight into the power structure and important relationships that define and influence what laws and policies are (or aren’t) adopted.

“The calendar provided to The Nevada Independent is the Governor's working calendar, maintained by staff,” Sisolak spokesman Ryan McInerney said in an email. “Some of the calendared appointments occurred as scheduled, others did not occur at all, or were managed entirely by staff. Moreover, travel schedules for the Governor, First Lady Kathy Sisolak, and the Governor's family were redacted to ensure the safety of the Governor and his family.”

Although he positioned himself as a natural successor to popular and moderate Republican Gov. Brian Sandoval on the campaign trail, meetings scheduled by Sisolak throughout the legislative session included comparatively more meetings with labor leaders and other constituencies of the Democratic Party. They also reveal details about which individual interests were able to secure time with the governor ahead of major decisions on bills affecting energy, collective bargaining for state workers and health care issues.

But like Sandoval, many of Sisolak’s scheduled meetings show the names of the same Carson City power brokers, lobbyists and business leaders who continue to wield the same influence and effect on the legislative process, regardless of the party in power.

Not all details of Sisolak’s calendar were made public — at least 67 events on the calendar provided to The Nevada Independent were redacted. Sisolak’s office said that in addition to travel, the office also redacted telephone numbers and personnel information such as start and end dates.

Here’s a look at the people, groups and constituencies Sisolak met with during the 2019 legislative session.

Legislative interactions

Sisolak made an effort to meet with all 63 members of the Legislature during the first few weeks of the legislative session — a hectic schedule reflected in the early February weeks of his calendar.

But meetings held with lawmakers outside of those initial meet and greets shine a light on Sisolak’s involvement in the legislative process beyond just signing bills.

The lawmaker who scheduled the most meetings with Sisolak was Democratic Sen. Chris Brooks, who previously served one term in the Assembly and is married to Sisolak’s chief of staff, Michelle White.

Brooks and Sisolak met three times — once on March 13 (the day Sisolak announced the state would sign onto an agreement to follow the Paris Climate Agreement), again with legislative leaders on March 15 and a final meeting on April 2 (the day a hearing was held on SB358, which raises the state’s Renewable Portfolio Standard to 50 percent by 2030). 

Brooks confirmed in an interview that the meetings were related to several bills related to energy that Sisolak had identified as priorities on both the campaign trail and in his State of the State address. He said early on that he and White had established a “firewall” and worked with other staff in the governor’s office to arrange meeting and discuss strategy.

“We were pretty adamant about making sure she wasn’t involved personally,” he said.

Other meetings held between Sisolak and individual lawmakers include:

  • A March 27 meeting with Republican Assembly Leader Jim Wheeler and Blockchains CEO Jeff Berns, described by the governor’s office as a meet and greet that veered into a discussion of issues with wild horses
  • An April 30 meeting with Democratic Assemblywoman Teresa Benitez Thompson, related to her bill AB400, which removed certain types of taxes from possible economic abatements. The bill was signed into law by Sisolak.
  • A May 17 meeting with Assembly Judiciary Chair Steve Yeager on AB553, the bill creating the Cannabis Compliance Board. Yeager presented the bill in committee about a week later; it was later signed into law by Sisolak.
  • A May 22 meeting with Senator Julia Ratti on her dental therapy bill, SB366. The bill was amended twice after the meeting and eventually signed into law by Sisolak.

Lobbyists

Sisolak’s meetings with lawmakers merely tap the surface of his involvement in the legislative process; the Democratic governor met with dozens of lobbyists or representatives for various interests groups throughout the entire 120-day session.

Notably, Sisolak recorded holding a short meeting with National Shooting Sports Foundation executive Larry Keane and the group’s state lobbyist, Patrick McNaught, on April 18. 

The meeting came nearly a week before lawmakers approved major changes to a major gun safety bill by Democratic Assemblywoman Sandra Jauregui, AB291, that initially sought to allow local governments to pass more restrictive gun laws than those put in place by the state (a concept called pre-emption).

But the concerns of the NSSF, which holds the annual SHOT tradeshow in Las Vegas, helped almost sink the bill, and contributed to the removal of that language from the bill. Lawmakers instead added in provisions creating a “red flag” law process, which lets law enforcement and family members petition a court to temporarily seize a person’s firearms if they present a danger to themselves or others.

The NSSF itself issued several warnings about Sisolak in the run-up to the 2018 election, noting that he had promised to institute a long-stalled voter-approved gun background check initiative and to ban assault weapons. NSSF spokesman Mark Olivia said that the meeting was similar to ones the group had across the country and in Washington D.C. with other elected officials, and that the organization was grateful that Sisolak took the time to listen to their concerns.

“This is what any trade association is going to do to make sure their concerns are heard,” he said.

Other major lobbyists that Sisolak met with during the legislative session include:

  • Former Assembly Speaker turned lobbyist Richard Perkins and clients on February 19 in Las Vegas
  • Former state senator, current lobbyist Warren Hardy on February 19
  • A meet and greet with the Jewish Federation and former Rep. Shelley Berkley on March 5. Both supported a bill, AB257, that would have authorized creation of a Holocaust memorial museum in Nevada; the bill failed to pass
  • Former Rep. Dr. Joe Heck on March 8
  • Dwayne McClinton on behalf of Southwest Gas on March 19
  • Golden Entertainment, Dollar Loan Center and Republic Services lobbyist Sean Higgins on March 27
  • Barrick Gold Corporation executives Christina Erling and Rebecca Darling on April 17
  • Kolesar and Leatham lobbyist Joe Brown on May 6
  • Nevada’s Women Lobby lobbyist Marlene Lockard on May 15
  • Griffin Company lobbyist Josh Griffin (and “group”) on May 20 
  • Las Vegas Metro Chamber CEO Mary Beth Sewald on May 23, to discuss “legislation relating to Nevada employers,” a spokesperson for the Chamber said
  • Ferraro Group founder Greg Ferraro and former Fennemore Craig lobbyist Jim Wadhams on May 29, in a meeting regarding pending bills and the close of the legislative session. Wadhams also met with Sisolak on April 1.

Greg Smith

Within hours after Democratic Assemblyman Mike Sprinkle announced he was resigning from the state Legislature over multiple claims of sexual harassment, Gov. Steve Sisolak was already meeting with his eventual successor — though the governor’s office claims it was just a coincidence.

While reporters scurried and stalked the legislative building in attempts to find Sprinkle or get comments from other lawmakers on his resignation, Sisolak had scheduled a meeting with Greg Smith — the husband of former Democratic state Sen. Debbie Smith. The meeting on March 14 came two weeks before his appointment to the Assembly and over a 15-person field of candidates who filed to replace Sprinkle. 

But Sisolak’s office said the meeting was just a coincidence; Smith was brought in to advise the office on several pending bills related to apprenticeship programs (Smith is a retired union apprenticeship program administrator.) Smith did not return several calls seeking comment on the meeting.

Education

On the campaign trail, few organizations were more helpful to Sisolak than the Clark County Education Association, which endorsed the future governor early in the campaign and spent more than a million dollars in third-party campaign ads ahead of the 2018 election.

Once in office, Sisolak’s door was open to the teacher’s union and its polarizing leader, John Vellardita. The governor and Vellardita met or called at least twice (once on March 14 and again on April 8), and held a meet and greet with CCEA educators on April. In contrast, the Nevada State Education Association (which endorsed Sisolak’s primary opponent) held a scheduled meeting with Sisolak just once, on March 19. 

And in a legislative session defined by massive shifts to the state’s antiquated funding formula and calls for more funding, Sisolak also met with various school district and higher education leaders. He met with Clark County School District Superintendent Jesus Jara twice (once on March 4 and again on March 26), Washoe County School District lobbyist Lindsay Anderson on April 4, Nevada System of Higher Education Chancellor Thom Reilly on February 27, and UNLV President Marta Meana on April 24.

Sisolak also met with State Board of Education chair Elaine Wynn on May 21, the same day as the first legislative hearing on the revamped K-12 education formula.

Business interests

Calls to major business and gambling company executives took up a sizable amount of Sisolak’s time, especially as the legislative session drew to a close.

Sisolak’s calendars show meetings with Anthony Marnell (CEO of Marnell Gaming, which operates the Sparks Nugget) on April 10, Golden Gaming CEO Blake Sartini on April 21 and Grand Sierra Resort and SLS Las Vegas owner Alex Muerelo on May 9. One of his last calls made before the legislative session ended on May 27 was to Virginia Valentine, the director of powerful casino trade group the Nevada Resorts Association. Valentine said the call was to relay the gaming industry’s support for AB533, the bill to create the Cannabis Compliance Board.

Other notable meetings or calls arranged between business executives and Sisolak include:

  • Eli Lilly executives on February 12
  • Beau Wrigley, the heir to the Wrigley chewing gum fortune and CEO of Suterra Wellness (a cannabis company that operates in Nevada and other states) on April 1
  • Fidelity National Financial executive Peter Sadowski on April 10. Fidelity is owned by Bill Foley, the owner of the Golden Knights hockey team.
  • Former Nevada Cattlemen's Association president Joe Guild and lobbyist Richard Perkins on April 23. Both lobbied for Union Pacific Railroad
  • Kaempfer Crowell attorney Jennifer Lazovich on April 26

2020 Candidates

At least four of the Democratic presidential candidates met with or calling Sisolak during the legislative session, including billionaire philanthropist Tom Steyer, New Jersey Sen. Cory Booker and former Housing and Urban Development Secretary Julian Castro. Sisolak’s office also said he met with California Sen. Kamala Harris during her trip to Nevada, and that all candidate visits were accommodated based on the governor’s schedule and availability.

He also met with former New York City Mayor and billionaire Michael Bloomberg — who considered but ultimately decided against a presidential run — on February 26, after state lawmakers approved a bill implementing a long-stalled gun background check law. Bloomberg helped fund the group that backed the initial ballot question in the 2016 election.

Sisolak said during an AFSCME forum earlier this month that he wasn’t sure whether he would endorse any candidate before the state’s presidential caucus in February.

Federal government

Unlike his predecessor Sandoval, who in the 2017 legislative session scheduled calls or meetings with at least 17 Cabinet secretaries and other high ranking officials in Trump administration, Sisolak made relatively few calls to officials in the Trump administration during his first legislative session.

Sisolak arranged a call with former Acting Interior Secretary David Bernhardt on Feb. 5, and another call with former Labor Secretary Alex Acosta on March 28, the same day Nevada joined a group of states intervening in a lawsuit defending the constitutionality of the Affordable Care Act.

Sisolak also scheduled a call with Delaware Sen. Tom Carper on April 30, the same day he sent a publicized open letter to Carper and Wyoming Sen. John Barrasso to reiterate the state’s “strong opposition to the Yucca Mountain project” (Barrasso and Carper serve on the U.S. Senate Committee on Environment and Public Works).

Grants management lawsuit

Sisolak’s office also scheduled a meeting entitled “Streamlink Discussion” on April 15, a day after The Nevada Independent published a story detailing how litigation brought by Streamlink had gummed up a grants management software contract that state officials believed could help tap into millions of dollars worth of federal grants.

Although the state took no immediate action after the story was published, Carson City District Court Judge James Russell ruled against the state and in favor of Streamlink in May, leading the Department of Administration to announce it would drop future appeals and re-open bidding on the grants management software contract. 

The contract was reopened in July, and the office expects to have the system fully functional by 2021.

Celebrities

Sisolak’s calendar also shows meetings with higher-profile individuals than the normal slew of Carson City insiders.

The governor scheduled a meet and greet meeting with actress Patricia Arquette on March 8, the same day the actress attended a press conference with Democratic lawmakers on several equal pay bills. Sisolak’s office said the meeting was indeed scheduled but never actually happened.

On May 15, he scheduled a meeting with former football star Boomer Esiason on the topic of cystic fibrosis, a genetic disease that Esiason has highlighted through creation of a foundation after his son was diagnosed with the disease.

Sisolak also met with legendary labor organizer Dolores Huerta on April 3, and presented her with a proclamation. Huerta came to Carson City to testify in favor of a bill that would allow for physician-assisted aid-in-dying. The bill, SB165, failed to advance out of the Legislature.

Snyder Production 6.24.19 by Riley Snyder on Scribd

Under casino pressure, cannabis smoke gets in City Council’s eyes

Back in the dime bag days, the shadowed alley off Sahara Avenue near Las Vegas Boulevard ran behind Honest John’s and the Jolly Trolley, a pair of gaudy grind joints. The Trolley is best remembered for the mob guys who skimmed its slots and fought over nickels and dimes on their way to prison.

The alley was a bustling profit center for pimps and drug dealers. It may have made more than the casinos.

These days, the homely strip mall is anchored by the behemoth Bonanza Gift Shop, a 40,000-square-foot Costco of tchotchkes located in the heart of the action. If you wanted key chains, a dice clock or “I Lost My Ass in Vegas” T-shirt to take back home to Des Moines, it’s the place to go.

And the alley and surrounding Naked City neighborhood? It’s changed a little, but not very much.

“It’s where I used to pick up my drugs and hookers on Friday night,” an old friend said recently, laughing at what we now consider nostalgic. An extremely successful Las Vegas businessman, his tastes in fat smoke and skinny girls became more nuanced after he left the alley and went corporate.

Cannabis has gone corporate, too. It’s not only legal, but celebrated as a source of job creation and tax revenue for the Silver State. Locally, marijuana distribution licensees include some the best-connected people in the valley. 

I heard my old friend’s laughter echo Wednesday at City Hall as the Las Vegas City Council considered, and then sidelined, what by all appearances was a legal and reasonable attempt to secure a special use permit to open a cannabis dispensary in a 3,600-square-foot section of the gift shop otherwise devoted to all those souvenirs.

The applicant, CWNevada and L Chaim 24 Fremont Properties LLC, was represented at the meeting by owner Dr. Pejman Bady. It had already received approval from the City Planning Commission, an approval recommendation by staff, and a full vetting of the 12 requirements it needed to meet that were specific to its cannabis license. Company representative George Garcia called the request “a typical special use permit application. ... We stand before you ready, having met all the requirements of the city.”

Of course, Garcia knew better.

No issue is typical when Gaming Inc. takes an interest. Opposing the pot shop approval was a casino industry contingent led by Nevada Resort Association President Virginia Valentine, veteran gaming attorney Jeff Silver, and executives representing The Strat, SLS/Sahara, and Boyd Gaming. MGM Resorts was present in spirit for its ownership of a nearby outside concert and event site. The casino side also brought out Metro Capt. Laz Chavez to oppose the dispensary.

The cannabis companies in the area aren’t without their own political weight. Essence, which advertises itself as the only cannabis dispensary on the Strip, glows green and sits in a handsome building across the Boulevard from the Strat. Although the company has blended into behemoth Green Thumb Industries, former Tropicana CEO Alex Yemenidjian and son Armen Yemenidjian hold executive positions in the Illinois-based company, and Las Vegas Sun publisher Brian Greenspun is a former partner when Essence was locally owned. But that’s the business.

(As a reminder of how close those connections come to city hall, Mayor Carolyn Goodman noted that she has a son involved in the industry and dutifully abstained from discussing the agenda item. In full disclosure, while reporting this column I discovered that a niece works for the cannabis company.)

City preliminary approvals aside, their reasoning was pretty sound.

Silver called Las Vegas Boulevard a “Yellow Brick Road” leading to downtown and dominated by casino investment, which made me wonder what he’d been smoking.

“And I know that the city and the county have had some disagreement about how long the Strip is,” Silver said. “But the Strip to me is where nonrestricted gaming is located. And that means that it’s taking it all the way past the Stratosphere hotel ... this is what we’re trying to protect. ... We don’t want a cannabis corridor on the Yellow Brick Road heading downtown. We already have what looks like to me to be a pretty heavy concentration of marijuana establishments.”

Golden Entertainment Vice President of Government Affairs Sean Higgins lamented the addition of yet another dispensary in the shadow of The Strat. He admitted  he took a keen interest in cannabis licensing before joining the casino company. But, hey, that was a couple years ago.

Higgins made The Strat sound more like a church than a gambling center when he spoke of the sacrilege of all the pot smoke wafting through the casino and on the streets of Naked City, which he admitted suffered from a crime and homeless problem. He reminded the council that four dispensaries stand within 1,000 feet of casino and 11 dot the area within a mile radius. And with $165 million invested or in the pipeline, The Strat is a major employer that holds plenty of drag on the far north end of the Strip.

“We are trying to revitalize this whole corridor,” Higgins said. “We’re working with the city, with the new archway, which is right on our property, which will be the grand entrance to the city of Las Vegas. We’re doing all those things, and we are vehemently opposed to putting a marijuana establishment, especially a recreational, at the gateway to the city of Las Vegas.”

He also illustrated the obvious: That the applicant was rushing to beat a November deadline before a new state law takes effect and mandates that future dispensaries open at least 1,500 feet from a nonrestricted gaming license.

But didn’t that just make the applicant a good businessman seeking the best location, location, location?

Perish the thought. The SLS/Sahara also weighed in with Government Affairs Director Andrew Diss reminding the council of the company’s substantial stake in the area. He also warned that one leg of a planned pedestrian bridge would empty out essentially at the front door of the proposed dispensary. And how would that look?

Again, didn’t that just make the applicant a good businessman with a great location, location, location?

Careful, smart guy.

In part because they’re hamstrung by marijuana’s outlaw federal status, in part I suspect because they crave a piece of the action, our corporate casino interests continue to send mixed messages when it comes to the cannabis crowd. They want their business, but can’t let them smoke on the property. They can’t have consumption lounges — and don’t want anyone else to start without them.

The proposed dispensary is in Ward 3, now represented by Councilwoman Olivia Diaz, who clearly felt the pressure. “I’m torn,” she said. “I feel like I love the people that are invested in this project, and I also love my downtown area command and the gaming (industry.) Right now we’re a family at odds.”

With council members Cedric Crear and Stavros Anthony against the measure, and fellow members Michele Fiore, Brian Knudsen and Victoria Seaman deferring to Diaz — thanks, guys! — that left Diaz feeling no love from the casino corporations.

In the end, the council punted and pushed the item onto a future agenda.

If you think the dispensary is a favorite for future approval, I suspect you’ve been spending some quality time in that alley.

Correction at 10:09 a.m. on 7/22/19: The original version of this column referred to George Garcia as "company attorney." It has been corrected to "company representative."

John L. Smith is an author and longtime columnist. He was born in Henderson and his family’s Nevada roots go back to 1881. His stories have appeared in Time, Readers Digest, The Daily Beast, Reuters, Ruralite and Desert Companion, among others. He also offers weekly commentary on Nevada Public Radio station KNPR. His newest book—a biography of iconic Nevada civil rights and political leader, Joe Neal—”Westside Slugger: Joe Neal’s Lifelong Fight for Social Justice” is published by University of Nevada Press and is available at Amazon.com. Contact him at jlnevadasmith@gmail.com. On Twitter: @jlnevadasmith

Lawmakers tackle bill gradually raising minimum wage to $12 by 2023, first increase in eight years

Sign in front of the legislature

A long-held progressive policy goal of raising Nevada’s minimum wage is again surfacing at the Legislature, with its best chance to pass in nearly two decades coming even as some advocates are asking lawmakers to raise the floor even higher.

Although many of the points made during an Assembly Commerce and Labor Committee hearing on AB456 reiterated past arguments on raising the minimum wage, Wednesday’s hearing was different: For the first time since 1992, Democrats control both legislative chambers and the governor’s office, making passage of a minimum wage bill much more likely than at any point in the past two decades.

Familiar battle lines were drawn during the hearing, with restaurants and business groups opposed and labor organizations and progressive groups in support — though a handful of rank-and-file Democratic advocates testified against the bill for not raising the wage to $15 an hour. Democratic Assembly Speaker Jason Frierson, the bill’s sponsor, said he believed the final product was a product of compromise but that not raising the wage wasn’t an option.

“I recognize there are many folks who think Assembly Bill 456 doesn’t go far enough,” he said. “I recognize that there are many folks who think AB456 goes too far and that we shouldn't take action at all. And I believe that what is in AB456 reflects a meaningful increase in the wages that our workers can earn, and I think it reflects a good amount of collaboration and work with stakeholders who have not come to a consensus on it but understand the interest and motivation behind increasing the minimum wage.”

Nevada’s minimum wage has not been changed since 2011, with businesses required to pay $8.25 an hour if they do not offer health insurance and $7.25 if health insurance is offered. The current wage was set by a voter-approved constitutional amendment in 2006, creating the tiered system for health insurance and tying the wage to any increases in the federal minimum wage or a cumulative cost of living increase.

The state’s minimum wage law exempts large portions of the state’s workforce, including babysitters, agricultural workers and taxi drivers. Effective minimum wages have increased in at least 27 states and Washington D.C. since January 2014

As amended, the bill would raise the state’s current tiered minimum wage rate by 75 cents in 2020, increasing an additional $1 per year until reaching $12 and $11 per hour in 2023. An amendment presented to the bill removed initial language related to civil litigation for underpayment of wages and a lower per-year increase of 75 cents a year until reaching the $12 and $11 wage marks.

But advocates and Frierson said the state’s eight-year period without any minimum wage increase (tied for the longest period without a wage increase since 1969) had left thousands of workers, from an increasingly diverse demographic and age background, struggling to make ends meet as wages stayed flat. Frierson cited statistics from the left-leaning Economic Policy Institute indicating that roughly 13,000 Nevada workers made less than the $8.25 minimum wage, and that an estimated 10 percent of the state's workforce earns less than $9 an hour as proof that a wage raise was needed.

“These are just numbers that I believe are unacceptable,” he said.

Supporters of the bill included a wide swath of progressive groups and labor unions, who highlighted the fact that minimum wage jobs were increasingly being filled by older workers. Pastor Ralph Williamson of the First African Methodist Episcopal Church, who heads the Faith Organizing Alliance group, said his North Las Vegas church holds a weekly food bank every Thursday which is attended by many individuals who can’t make enough money at their minimum wage jobs to feed themselves or their families.

“As a pastor, I have a moral obligation to be here. As a faith leader, I cannot continue to see our community suffer due to low wages,” he said. “I cannot continue to see our neighbors, brothers and sisters get preyed upon by certain greedy corporations and businesses that are taking advantage of those making low wages.”

Opponents included several chambers of commerce and various individual restaurants, who said that while they were not in theory opposed to raising the wage floor, wanted certain exemptions and carve-outs for new employee “training” wages or to avoid raising the wages for service industry and other tipped workers.

Sean Higgins, a lobbyist for Golden Entertainment, said the casino company would welcome an increase in the minimum wage for its non-tipped employees, but said without a carve-out for tipped employees the bill would significantly shift the landscape of the state’s gaming and hospitality industry.

“If this gets passed, you will have locations reducing hours, automating, increasing prices and possibly even adding service charges to bills to make up for their bottom line,” he said. “All these have an effect on tipped employees, and the majority of them are negative.”

Those suggestions of creating an alternative subminimum wage structure bristled Democratic Assemblywoman Maggie Carlton — a former waitress, who peppered Higgins and lobbyists for the restaurant industry as to whether their support was contingent on a “tip credit” or not allowing tipped employees to realize a minimum wage higher than the one required by the state Constitution.

“The reason this state is the state that it is, is because tipped employees, the service employees of this state, built this state,” she said. “And the reason they built it, and the reason they came here, is because there was no sub-minimum wage. We own homes, we have health care, we have pensions, we serve in the Legislature, we are good community citizens. We should not be treated differently because we choose to work in an industry where the tip is laid on the table.”

The bill was also opposed by a handful of progressive activists, including Gabrielle d’Ayr, who asked lawmakers to raise the wage floor either more quickly or all the way to $15 an hour.

“Inflation is not going to stand still,” she said. “By the time we get to 2023, even with the conceptual amendment, we will be back where we started.”

The measure falls in line with what Gov. Steve Sisolak said he would support at a January Nevada Independent forum, where the governor said he would support a minimum wage of at least $12 an hour with an increase of “something like $1 a year for three, four years.”

In 2017, Democratic lawmakers approved two bills raising the minimum wage including a Senate effort to bump the wage to $12 per hour over five years. That bill was eventually vetoed by Republican Gov. Brian Sandoval, alongside an effort by Assembly Democrats to establish a minimum level of health benefits required for employers to qualify for the $7.25 per hour minimum.

In 2015, legislative attempts to raise the wage to $15 an hour, $9 an hour and eliminating it entirely and replacing it with a system based on the Consumer Price Index all failed to pass.

A 2017 poll by The Nevada Independent found more than two-thirds of Nevada voters supported a raise to the minimum wage, although the poll did not identify a specific dollar-per-hour target.

Payday lending opponents, industry clash in charged hearing over loan database

The exterior of a MoneyTree branch

Hours of impassioned testimony dominated discussion during a hearing on a bill that would create a statewide database for tracking payday loans, a seemingly innocuous concept met with fierce resistance and dire rhetoric from the industry and its supporters.

Lobbyists, pastors, a little league coach and dozens of employees of payday lending companies packed hearing rooms Wednesday for a hearing on SB201, which would create a database to track information on high-interest (more than 40 percent) short-term loans that includes amounts, fees assessed on borrowers, default rates and all interest charged on loans.

The bill also codifies portions of the federal Military Lending Act — which prohibits lenders from charging active-duty military members more than 36 percent interest — and authorizes lenders to provide information on food stamps and other safety net programs offered by the state.

But the bulk of testimony, questions and opposition throughout the nearly three-hour hearing dealt with the payday loan database concept; something supporters said would ensure all lenders are following state laws and curb abusive loans but which opponents (who include top legislative donors and lobbyists) said would unnecessarily burden and possibly damage the industry.

The concept of a payday loan database isn’t new; at least 14 other states have passed laws to operate with a similar database with charges between $0.43 to $1.24 per loan to operate the system. Databases in other states are run by a private contractor, Veritec Solutions.

Nevada has approximately 95 businesses licensed as high-interest lenders, with about 300 branches statewide. In 2016, those businesses made approximately 836,000 deferred deposit loans, nearly 516,000 title loans and up to 439,000 high-interest loans.

The bill’s sponsor, Democratic Sen. Yvanna Cancela, said the bill arose out of a 2018 audit of the state’s Division of Financial Institutions — the agency that oversees and regulates payday lenders — that found nearly a third of lenders had a less-than-satisfactory rating over the last five years. The audit suggested that a loan tracking database would have “significant value to the Division, its licensees, and Legislators.”

Cancela called the audit “striking” and said the bill was an attempt to improve regulation of the industry by giving regulators a real-time ability to check loans, as opposed to their current model of yearly audits or responding to complaints from the public.

“This is going to be a tool for the state to more efficiently enforce our existing consumer protections, and won’t be accessible to anyone but state regulators who currently have a right to this information,” she said.

The bill requires the Division of Financial Institutions to contract with a vendor to create the database, which includes:

  • Information from individuals with loans outstanding from more than one lender
  • Any outstanding loan taken in the 30 days preceding another loan
  • Any case where a borrower has taken three or more loans from a single lender within a six month period

George Burns, who heads the division, told lawmakers that a database would be a useful regulatory tool.

“The ability to enforce (these laws) of course, is a question of what is the adequacy of the resources and the tools that FID has to enforce all of this,” he said. “What we’re looking at here on this particular bill is improving those tools and augmenting the resources in order to do so.”

Gov. Steve Sisolak said during his campaign for governor that he was supportive of a payday lending database.

Although states charge a variety of fees to implement their databases, Burns said the division expected the fee to be less than a dollar and that the actual amount would need to be approved through the regulatory process.

Tennille Pereira, an attorney with the Legal Aid Center of Southern Nevada, told lawmakers that creation of a database would solve two problems: borrowers who take out loans from multiple lenders to get around the state’s limit on extending loans beyond 25 percent of a person’s income, and lenders who allow borrowers to pay off an existing loan by taking out another high-interest loan, which is not allowed under state law.

Supporters included a variety of progressive and social service groups, as well as state Treasurer Zach Conine. Pastor Sandy Johnson with United Methodist Church in Boulder City, representing the interfaith group Nevadans for the Common Good, said she had a personal friend who experienced great financial difficulties brought on by payday loans

“If existing state laws were enforced, consumers like her would be protected from being trapped in a debt cycle for more than two decades,” she said. “The long term economic stability of families should not be undermined if they take out a short-term loan.”

But lobbyists for the lending industry staunchly opposed the proposed law, saying that even a small fee tacked onto the loans to create a database could have a significant effect on interest rates. In a memorandum submitted by payday lending companies Moneytree, Check City, USA Cash and others, the industry claimed that adding even a minimum $1 fee to loans would increase interest rates by as much as 52 percent on certain loans.

Alisa Nave-Worth, a lobbyist for that group of lenders, said the industry strongly disputed the methodology of the audit but that the database would have only prevented about 5 percent of the complaints or issues raised in the audit. She brushed away suggestions that the industry was not looking out for the best interest of consumers, saying that saddling borrowers with debt wasn’t good business.

“It does not make sense to give a loan to someone who can’t pay back,” she said. “It’s not good business.”

Also testifying in opposition was former Clark County Commissioner Susan Brager, who said she initially opposed Dollar Loan Center and other high-interest lenders, but came around to them after touring their facilities and seeing the service they provided to consumers in need of short-term credit, and that passing the bill would drive the industry model away.

“It will be underground, and it will be detrimental to those who need a stopgap solution,” she said.

But the largest presence by far was by Dollar Loan Center, the short-term lender with 42 Nevada branches. Around 50 to 60 employees attended the hearing in Las Vegas, as well as a radio station manager and Little League organizer who both testified to the company’s business ethics.

Sean Higgins, a lobbyist for the company, said it did its own analysis of loans given to borrowers in 2018 and found its average actual interest rate was below 30 percent. He said that the company also uses its own database with other lenders to ensure that borrowers weren’t taking out more loans than they should.

“There is no quote unquote debt treadmill that these people get stuck in,” he said.

But Cancela told members of the committee that much opposition testimony made overreaching conclusions about the bill, and that creation of the database would not affect lenders who followed the law and didn’t extend loans in violation of the law.

“What I think is most important in considering your support or opposition to this bill, is how better enforcing current laws would in any way change the industry's ability to operate,” she said.

The industry has an established position in Carson City, contributing more than $172,000 to state lawmakers over the last two years, with top recipients including Assembly Speaker Jason Frierson ($23,500) and Senate Majority Leader Nicole Cannizzaro ($11,000). At least eight high-interest lenders are represented by 22 different lobbyists in Carson City, including former Democratic legislators John Oceguera, Marcus Conklin and William Horne.

Similar concepts were proposed by the 2017 Legislature but fell short. A measure proposed by Democratic Assemblywoman Heidi Swank creating a database failed to make it out of committee, and an emergency measure introduced by Assembly Speaker Jason Frierson in the waning days of the legislative session passed the Assembly on a 30-11 vote but flamed out in a Senate committee.

It’s unclear what will happen to other measures affecting high-interest, short-term loans. Democratic Assemblywoman Heidi Swank said Tuesday that her bill AB118 setting a 36 percent rate cap on high-interest, short-term loans has not yet been scheduled for a hearing.