Tonight, Governor Steve Sisolak (D) unveiled his proposed biennial budget that keeps in place most of the budget cuts that the Nevada Legislature passed last summer. But if President-elect Joe Biden can pass his first COVID-19 and economic relief package through Congress soon, Biden’s plan may come to Nevada’s rescue.
Here’s what’s at stake, and why Congress may very well determine most of the agenda for the Nevada Legislature this year.
Yes, Nevada’s budget outlook remains bleak…
As we’ve been expecting since the Nevada Legislature’s special session to cut about $700 million from the current biennial state budget last July, and especially since the Nevada Economic Forum last month projected only $8.5 billion in taxable revenue for the next biennium, Governor Steve Sisolak proposed an $8.68 billion state budget for the 2021-23 biennium that looks a little better than the dire scenario nearly everyone feared last July, but it’s still 2% below the $8.85 billion budget that the Legislature originally proposed for the 2019-21 biennium.
In better news, Sisolak’s budget proposal restores most of the health care cuts made during that special session, and it actually boosts the Medicaid budget by $1.6 billion over the current biennium due to the 18.7% increase in Medicaid’s caseload, along with another 2.2% growth in caseload state officials expect by 2023. Yet while public sector worker furloughs will come to an end, the hiring freeze across most state agencies remains in place.
For public education, Sisolak is proposing a $130 million cut to $7.0 billion. But with the state still awaiting guidance from the federal government on the $550 million ($450 million for K-12, and $100 million for NSHE colleges) Nevada education officials expect from Congress’ last “stimulus” package, this picture may look a little less bleak after the new Legislature goes into session. And thus far, Sisolak is promising that even with state tax revenue this low, no school district will be (further) adversely affected by the 2019 launch (SB 543) of the state’s new K-12 funding formula.
So in summary, Sisolak’s new budget for what his predecessor liked to call “The New Nevada” tells a very old Nevada story: We finally got away from the brink of total annihilation, but we’re still in the depths of despair. (But really, this is what happens when one state relies so hard on tourism, then gets hit by a global pandemic.) But even though Republicans have enough legislators in both houses of the “Gang of 63” to block any and all tax reforms to alleviate or reverse these proposed budget cuts, there’s another legislative body on the other side of the continent that actually can bail us out (if they and the new president agree on such a “rescue plan”).
Yet might Joe Biden (and Congress) come to our rescue?
Last Thursday President-elect Joe Biden debuted his American Rescue Plan, a $1.9 trillion economic relief and health care recovery package chock full of policies and “stimulus” programs. Yes, it includes the $1,400 “stimulus checks” on top of the $600 “stimulus checks” included in the last COVID-19 relief package that result in $2,000 in “stimulus checks” thus far this year for most Americans who earned less than $75,000 in taxable income in 2019, and it expands “stimulus check” eligibility to adult dependents like college students and Americans with disabilities. However, there’s far more in this package beyond the “stimulus checks” that we should examine.
As Sisolak noted in his own budget proposal, “The revenue supporting the Governor’s Executive Budget is still $500 million less than the prior biennium, while the need for expanded essential services continues to increase. This alone demonstrates a strong need for additional federal support to protect Nevada’s public health while also reviving its economy.” Biden’s American Rescue Plan really can come to state and local governments’ rescue with $350 billion in state, municipal, and Native American tribal direct and flexible aid. In addition, Biden’s plan includes $290 billion to extend unemployment aid expansion to September (including PUA for small business people and “gig economy” workers) and boost the federally backed income boost from $300 per week to $400 per week. As economists like Moody’s Analytics’ Mark Zandi have pointed out since last summer, unemployment aid and state/local government support are among the most effective “stimulus” tools the federal government can utilize.
Biden’s plan also includes: $160 billion to assist state and local public health authorities restock and regroup on testing, contact tracing, PPE supply, and COVID-19 vaccine distribution; $20 billion to secure PPE for Native American tribal communities; $35 billion in housing aid for distressed renters and homeowners; $12 billion in additional SNAP food aid; $57 billion for a federal tax credit program to fully subsidize COBRA health insurance coverage (for qualifying individuals) along the lines of what Rep. Steven Horsford (D-North Las Vegas) proposed last April; $170 billion to help K-12 public schools reopen safely; $50 billion for a new small business grant program; $20 billion in aid for local transportation systems; $149 billion to make federal child tax credits fully refundable; and $84 billion to expand paid family and sick leave through the rest of this year.
Speaking of Mark Zandi, he analyzed Biden’s American Rescue Plan last week and concluded that if it becomes law by this spring, America’s GDP may grow 8% this year, the national GDP will grow at least another 3% next year, and ten million workers will find jobs again through the end of 2022. Or as Zandi explained himself, “The raging pandemic will fade by mid-2021 once a majority of Americans are vaccinated, and the economy will quickly get back on track thanks in significant part to robust fiscal and monetary policy support. President-elect Biden’s proposed $1.9 trillion fiscal relief package is a big step in that direction.”
We shouldn’t ignore the reasons why so many Americans demand more “stimulus checks”. Let’s also remember the big picture on why “stimulus checks” alone won’t save us.
As has largely been the case since last March, the “political insider conversation” has centered on individual “stimulus checks”, and especially the mounting argument between Rep. Rashida Tlaib’s (D-Michigan) call for $2,000 monthly “stimulus checks” and Senator Joe Manchin’s (D-West Virginia) reluctance to support any more “stimulus checks”. But as we can see above, there’s far more at stake with Biden’s American Rescue Plan than just “stimulus checks”.
With Democrats holding a tiny House majority and on the cusp of securing an even more fragile Senate majority thanks to Vice President-elect Kamala Harris and Senators-elect Jon Ossoff (D-Georgia) and Raphael Warnock (D-Georgia), Congressional Democratic leaders are going to have to either count on President-elect Joe Biden’s ability to “restore bipartisan cooperation” or rely on a special legislative process called reconciliation to pass any meaningful legislation. Considering how only 10 House Republicans voted to impeach Trump after he incited a terrorist attack that could have killed members of Congress and overthrown our “small d” democratic government, Senator Bernie Sanders (I-Vermont) may be onto something in preparing to use reconciliation to pass a COVID-19 relief package should most Republicans continue to refuse to cooperate with Democrats.
As we discussed just hours prior to the January 6 Attack on the U.S. Capitol, the electoral fate of Senator Catherine Cortez Masto (D), Reps. Steven Horsford and Susie Lee (D-Las Vegas), and dozens of her Congressional Democratic colleagues likely lies in what they and Biden can accomplish in the coming weeks to curb COVID-19 and fix the economy. But now that Americans’ faith in our democracy is as shaken and tattered as ever, Democrats really need to deliver the goods just to restore Americans’ faith in our government to even function at any kind of basic level… And for that matter, to ensure the state and local governments in their own respective states can function at any level.
If you have further questions about COVID-19 and your health, check with Nevada Health Response on testing in your area, and check with Nevada 211 for more health care resources. If you’re in need of additional aid, check the Nevada Current’s and Battle Born Progress’ resource guides. If you can afford proper treatment and you are fortunate enough to help others in need, please donate to larger operations like Direct Relief and Mutual Aid Disaster Relief, and to local groups like Three Square. And for goodness sake, please wear your masks and maintain social distancing from people outside your household.