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Our Nevada Legislature Special Session Day 1 Update

During the opening hours of the 31st Special Session of the Nevada Legislature, state policymakers heard from the Governor’s Budget Office, public education leaders, and even some “civilian” constituents on what they will soon decide regarding the state’s suddenly imploding budget. Here’s the rundown on what we’ve seen so far on the first day, and where they’re all probably heading in the days ahead.

First, an update on the COVID-19 pandemic

As the Nevada Legislature’s 31st Special Session officially kicked off, the state got a tiny bit of good news: After three weeks of rising COVID-19 infection rates, the cumulative positivity rate (7.54%) and daily positivity rate (6.9%) finally ticked downward this morning. However according to Covid Act Now’s database, the state’s official Nevada Health Response database, and The Nevada Independent’s running tally, hospitalizations continue to rise (though ICU occupancy appears to be leveling off) and contact tracing capacity remains dangerously low.

While we have this very early sign suggesting that Governor Steve Sisolak’s (D) new universal mask/face covering rule may be helping to bring Nevada’s COVID-19 stats back down, our test positivity rates remain well above safe reopening benchmarks other highly developed countries have been using. And as we’ve been saying for some time, America’s overall shortcomings on testing availability and contact tracing capacity stand in sharp contrast to other highly developed nations’ use of “lockdown time” to establish more robust testing and contact tracing programs that have allowed them to reopen more safely, more quickly, and more businesses and offices overall.

For all of President Donald Trump’s and his far-right allies’ calls to “Liberate!” and “Reopen!” everything en masse immediately, Vox’s latest update to its 50 state COVID-19 safety guide shows that only New York and Rhode Island have done enough to contain COVID-19 to justify large-scale business reopenings. And even as Republican leaders in states like Arizona, Florida, and Texas boast of their “successful reopenings”, all their skyrocketing COVID-19 infection and hospitalization rates show the very real danger of attempting any “economic recovery” without addressing the public health aspect of this crisis.

Here’s how the Nevada Legislature reopened for this special session.
Nevada Legislature
Photo by Andrew Davey

It didn’t take long for dividing lines to form on both sides of the Legislative Building. First in the Senate, then in the Assembly, all Republicans voted against Democratic leaders’ new rules to allow remote voting should any legislators have to self-isolate (following any potential COVID-19 exposure). 

From there, legislators began picking over Sisolak’s budget proposal, including questions about federal CARES Act funds that are already being used to prop up the state’s COVID-19 relief and response efforts and questions on who exactly will be affected (and how they will be affected) by Sisolak’s proposed cuts. While the latest state estimate shows a slightly smaller $1.15 billion deficit for this fiscal year than earlier projections of a $1.27 billion deficit, that’s still over 20% of the budget that the Legislature passed last year for this fiscal year.

A little later, the Assembly opened the floor (virtually) to public comment. Multiple comments came from public education advocacy groups (such as the NSEA and CCEA teachers’ unions) arguing against Sisolak’s proposed cuts and for tax increases to negate the need for such deep cuts. Additional comments came from additional community advocates and progressive groups arguing against Sisolak’s proposed education cuts and cuts to other parts of the social safety net, such as Medicaid health care programs, and those comments outnumbered others recommending deeper and/or different cuts from what Sisolak has proposed.

Here’s what’s probably or definitely not open for discussion during this special session.
Nevada Legislature
Photo by Andrew Davey

As we explained yesterday, Sisolak’s proposed cuts spread across the state’s public infrastructure. Yet while lawmakers from both parties signaled deep discomfort with Sisolak’s proposed cuts, no one has yet presented any viable alternative. Only so much “loose change” can be swept into the General Fund from available specialized funds (such as court settlements overseen by the Attorney General’s Office and the oft-raided Highway Fund), and there’s only so much “waste, fraud, and abuse” available to eliminate.

But when it comes to one possible source of “waste, fraud, and abuse” to eliminate, or at least cut back, there doesn’t seem to be a groundswell inside the Legislative Building to target the state’s suite of corporate tax credits. While Assembly Majority Leader Teresa Benitez-Thompson (D-Reno) did ask about the state’s film tax credit program, so far no legislator has put forward any proposal to roll back or eliminate future benefits under the respective (and far more expensive) tax credit programs benefiting Tesla, Switch, and the Raiders NFL franchise

When it comes to revenue, Sisolak dropped a few hints during an interview with The Nevada Independent, mainly that Democratic leaders are eyeing possible hikes in the Modified Business Tax, the Commerce Tax, and “sin taxes” on alcohol and tobacco purchases. But unless and until any Republicans signal any willingness to vote for such tax hikes (Democrats have a ⅔+ supermajority in the Assembly, but not in the Senate), none are doable. And when it comes to long-term tax reforms, such as removing low mining tax rates and the income tax ban from the Nevada Constitution, Sisolak essentially eliminated any possibility of legislators touching any of those during this special session (which do not require ⅔ supermajorities, but also would not provide any immediate revenue).

Here’s who’s definitely in a position to help (though it remains to be seen whether they actually will).

Throughout the day, legislators heard from the Governor’s Budget Office, state health officials, and from several public education leaders on the effects of Sisolak’s proposed cuts. As we explained yesterday, a host of Medicaid programs that federal authorities consider “optional” (such as various mental health services, dental care, and optometry) and several K-12 public education programs (such as school safety boosts and class size reduction) are among the many state programs that are now on the chopping block.

Throughout the day multiple “stakeholders”, such as Sisolak and Clark County School District (CCSD) Superintendent Dr. Jesus Jara, called on the (Republican-run) U.S. Senate to take up the HEROES Act that the (Democratic-run) U.S. House passed in May, which includes over $915 billion in new relief funds for state and local governments. But so far, the Trump administration and Senate Republican leaders have effectively killed the HEROES Act and are instead promising more “targeted aid” some time later this year. Yet while the conversation in Washington is mostly centered on how much more to give to individuals via a second round of “corona checks”, it’s still unclear what Congress and the White House will agree on for state and local relief funds (if any).

So most likely, the folks in the best position to help Nevada avoid this fiscal nightmare are nowhere near the Nevada Legislature. But unless and until Congress passes a new relief package that Donald Trump signs into law, and unless that relief package includes enough state and local relief funds to make up for Nevada’s lost revenue and heightened expenses, we’re back to square one and the central question of who will be forced to suffer the deepest cuts.

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