“Whereas, Section 9 of Article V of the Constitution of the State of Nevada provides that, ‘[T]he Governor may, on extraordinary occasions, convene the Legislature by Proclamation and shall state to both houses, when organized, the business for which they have been specially convened;’ … Now therefore, I, Steve Sisolak, Governor of the State of Nevada … do hereby convene the Nevada State Legislature into a special session … to consider the following solutions to the deleterious effects of the COVID-19 pandemic, including the substantial general fund shortfall for the current biennium among other items …”
As you’re likely now aware, the Nevada Legislature recently met for a special session to address significant issues arising from the Governor’s decision to shut down the state on March 17th. The most critical issue that needed to be addressed was a massive, $1.2 billion budget shortfall that is a direct result of the shutdown.
In order to fill the shortfall, Legislators ultimately passed a budget that cut over $500 million with the largest reductions to health and education. Medicaid reimbursement rates, specialty care programs and funding for underperforming schools were all on the chopping block. Among other cuts, the $70 million promised for the New Nevada Funding Formula for education was cut, $138 million was redirected to the general fund from other accounts and the Nevada System of Higher Education will see about $135 million in cuts. The state is expected to use a combination of reserve funds and federal relief dollars to fill the rest of the shortfall.
In his statement at the close of the session, Governor Sisolak said, “While all states are facing devastating impacts to their budgets as a result of the COVID-19 recession, Nevada once again finds itself hit the hardest due to an over reliance on an unbalanced revenue structure and the continued need to successfully diversify our economy beyond hospitality and tourism.” Mining taxes were also hotly debated, and the decision to not increase the industry’s taxes was made at the twelfth hour of the session. Currently, mining is one of the most taxed industries in the state, paying the highest modified business tax rate, approximately 10 percent of all sales tax as well as an industry specific tax.
Sisolak went on to add, “… there are longstanding, structural problems that must be address to ensure Nevada is no longer the most vulnerable state in the nation every time the economy takes a downturn.” However, as of this Special Session, it seems as though Sisolak, and the Legislature itself, are simply paying lip service to this important diversification. Strides were made under Governor Brian Sandoval, but not enough. And, Sisolak has done little to further the diversification of the Silver State, apart from riding on Governor Sandoval’s coattails in that regard. Now, in the midst of a crisis, Sisolak touts the importance of diversification, seemingly to have just remembered how vital it is to Nevada.
Call to Action: I don’t know about you, but I am sick of Nevada facing economic crisis after crisis with no end in sight. Pandemics such as COVID-19, or even the recent Great Recession, are not within our power to predict or control. However, it is within our power to focus on diversification, control government spending and use our resources wisely, not wastefully. We can’t keep going back to the same industries with our hands out every time we need emergency funding. Get involved in our Battle Born state, demand diversification and speak up to stop out of control spending, before we face the next crisis.
By Whose Authority?
For more information on my Commentary and to see some of my backup research, or if you wonder why I take the position I take, go to www.LyleBrennan.com.
2 Chronicles 7:14 (NKJV) “If my people who are called by My name will humble themselves, and pray and seek My face, and turn from their wicked ways, then I will hear from heaven, and will forgive their sin and heal their land.”