UPDATE (FOX5) -- Sunday evening, the Nevada Legislature concluded the special session. Gov. Steve Sisolak released the following statement:
I appreciate the hard work of the Nevada Legislature during the 31st special session in making the difficult decisions that were necessary to amend the state’s Fiscal Year 2020-21 budget and address the $1.2 billion shortfall caused by the COVID-19 pandemic. Some of the reductions were restored with limited one-time funding options that were identified and additional Medicaid dollars identified at the start of the session based on just released utilization rates. Yet, with a $1.2 billion shortfall, we know our state will be challenged to provide the essential services Nevadans deserve in health care, education, and so much more.
Legislation passed during the special session includes the requested flexibility to take advantage of any direct federal funding for state governments, if authorized, for this purpose, to replace lost revenue and restore reductions. Flexibility is also included to continue to take advantage of the enhanced Federal Medical Assistance Percentage (FMAP) if it is extended later this month, which could also reduce the impact of the related reductions during this fiscal year.
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 overreliance on an unbalanced revenue structure and the continued need to successfully diversify our economy beyond hospitality and tourism.
As Governor, I have been faced with these budget realities and difficult decisions day in and day out since this global pandemic hit Nevada a little over four months ago in March. I know our lawmakers have also seen the impacts of this virus in their districts, and in this special session they have weighed the magnitude of this situation and its impacts on our State as a whole. Now that the immediate budget crisis has been addressed, we must recommit ourselves to uniting under our shared values and goals.
When faced with these unprecedented challenges, there is an expectation that disagreement will occur. Going forward, we must not focus on what divides us, but commit ourselves to the overwhelming consensus that was expressed by both parties during this session. That there are longstanding, structural problems that must be addressed to ensure Nevada is no longer the most vulnerable state in the nation every time the economy takes a downturn. We owe it to our fellow Nevadans, most importantly our children, to seize this opportunity going forward. I look forward to partnering with legislators and community leaders on this great task ahead of us.
We are in a constantly changing, unpredictable economic environment due to the COVID-19 pandemic. With governors around the country and our state legislators, I will continue to work to protect lives and advocate for federal assistance for the replacement of lost revenue that none of the COVID-19 bills have provided to date.
I am grateful for the flexibility under the special session legislation to restore the reductions in whole or in part from any additional revenue that may be generated in this fiscal year.
CARSON CITY, Nev. (AP) — The Nevada Legislature approved immense cuts to the state’s health and education budgets on Sunday in an effort to rebalance the state budget amid the ongoing coronavirus pandemic and plummeting revenue projections.
The revised budget passed through both the state Senate and Assembly after days and nights of deliberation in the part-time Legislature, which Gov. Steve Sisolak convened for an unscheduled special legislative session on July 8 to address a projected $1.2 billion revenue shortfall.
Lawmakers said the final proposal culminated comprehensive efforts to prevent the worst cuts outlined in Sisolak’s baseline budget proposal and noted the difficulty in deciding whether to cut education, health care or other spending.
“It’s impossible — impossible — for us to choose between all these problems,” Sen. Julia Ratti, D-Reno, said of the targeted cuts. “All I can say is we did the very best we could to balance all those needs without, unfortunately, the opportunity to add more revenue,”
Assemblywoman Teresa Benitez-Thompson said she was proud that the Legislature had found ways to restore some of the massive cuts to Medicaid programs the federal government doesn’t require states provide, including prosthetics.
“We’re actually giving back limbs to people who are impoverished and rely on the state’s medical insurance system,” the Reno Democrat said.
The final bill reduces furloughs and salary freezes that Sisolak had mandated for state workers and earmarks $50 million in federal relief dollars for a block grant program for schools sent reeling by coronavirus and facing unanticipated costs.
The education funding supplement won praise from Assembly Minority Leader Robin Titus, R-Wellington.
A day after voting against the bill because she said it prioritized state workers over education and hospitals, Titus voted in favor of the amended bill. She said the changes reflected successful efforts to find additional funds in state reserves.
“Thank you for finding this money. And thank you for prioritizing kids,” she said.
Unlike states that collect personal and corporate income taxes, Nevada relies heavily on sales tax revenue from the gambling, hospitality and live entertainment industries to underwrite its state budget. As concerts and conventions have been canceled, hotel rooms have sat empty and overall visitor volume has fallen in Las Vegas, lawmakers have had to confront one of the nation’s most severe budget crises.
Lawmakers from both parties found testimony about the effects of the cuts difficult to stomach, but a last-ditch attempt to cap mining tax deductions grew partisan and contentious, with Democrats in favor of approving the revenue stream and Republicans opposed to raising taxes during a recession.
The proposal, which would have capped the amount mining businesses can deduct from the state tax on net proceeds on minerals to 60% of current levels, died after failing to win the two-thirds majority needed in the Senate to increase taxes. After party-line votes in both chambers, Democrats blasted Republicans for voting against protecting funding for K-12 schools.
The long-awaited plan cuts more than $500 million from the state budget, with the largest reductions hitting the Department of Health and Human Services and the K-12 education system. It cuts Medicaid reimbursement rates and specialty care programs and funding allocated to the state’s most underperforming schools and its “Read by Grade 3” literacy program. The state will use a combination of reserve funds and federal relief dollars to shore up the rest of the shortfall.
Sisolak said in a statement he intends to sign the bill and was pleased with the idea to use federal relief dollars for the proposal’s education grant program.
“While we may not be allowed under federal restrictions to use (Coronavirus Relief Funds) dollars to fund budgeted programs reduced or eliminated due to the state’s dramatic revenue shortfall, we can use these dollars for new programs to help those directly impacted by COVID-19,” he said.
Sam Metz is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.