Nevada Legislative UpdateThe 82nd Session

 

In 1964, the Beatles sang “(Money) Can’t Buy Me Love” – the 82nd session of the Nevada Legislature proved that the Beatles were definitely right. Newly-elected Governor Joe Lombardo (R) and a legislature controlled in both houses by Democrats, began the legislative session with the largest budget surplus on record. At the December meeting, the Economic Forum projected $1.7 billion more for the upcoming biennium and $1.9 billion more from the current biennium. And if that wasn’t enough, when the Economic Forum met again in May to give the final budget projections, they added another $251 million to the pie. This gave the Governor and Legislature around $11.5 billion to build a budget, which is $2.6 billion more than the previous 2021 budget. (Note: the Economic Forum is a panel of economists tasked with considering all the monetary inputs to the state budget and setting a budget projection. The Governor and Legislature must stay within for the two-year budget cycle.)

Despite having so much money to work with, the Governor and legislative leadership couldn’t agree on much, leaving both sides and their supporters without their highest priority items. There’s an old adage in government that if everyone is equally unhappy then it makes for good legislation. However, it makes for a very unpleasant journey to the finish.

Although four of the five constitutionally required budget bills did barely make the 120 day “Sine Die” deadline (despite the Governor first vetoing the Appropriations Bill and, ultimately, signing it before the deadline). However, the Capital Improvements Budget bill did not make the deadline as it required a two-thirds vote and Senate Republicans were still pushing for more priority items related to education. Therefore, a Special Session was called for the next day and a budget deal was then cut.

Following the budget special session, another special session was called for the Legislature to take up the issue of providing $130 million in state funding to help build a stadium and bring the Oakland A’s baseball team to Las Vegas. This was a priority item for the Governor that did not succeed during the regular session. The hard feelings from the regular session played a large role in this special session and many Democrats complained that, while they were told there wasn’t money for their social priorities, somehow the state had extra money for a baseball stadium.

Ultimately, the funding of the A’s stadium was approved on June 14th but did have token opposition from a few Democrats and even a few Republicans.

Fresh Blood

In addition to having a new Governor, the 2023 Legislature had a very large freshman class. In the Senate, seven members, a full third of the chamber, were new to Senate service (though five of those seven had previously served in the Assembly). The Assembly had 15 new members, just over one-third of the body, only one of whom had previously served in the Legislature. This was also the first session legislative sophomores were facing actual lobbying, since the 2021 session was almost completely virtual.

Additionally, three of the four caucus leaders were new to their roles, with only Senate Majority Leader Nicole Cannizzaro (D) returning to leadership. She chose Senator Roberta Lange (D) as her assistant majority leader. The new Assembly leadership was Steve Yeager (D) as Speaker and Sandra Jauregui (D) as Majority Floor Leader.

Three legislators were serving their last term during the 2023 session, all three in the Senate. Democratic Senator Pat Spearman, a longtime champion of veterans’ issues, as well as Republican Senators Pete Goicoechea, well-respected for his deep knowledge of water rights issues, and Scott Hammond, an advocate for educational choice, have reached their term-limited maximum service in the Senate. No additional legislators are termed out or have made retirement announcements as of yet. 

For the Record-Books

Governor Lombardo set a record for the highest number of vetoes in a legislative session, rejecting 75 bills sent to him. The previous record for the most vetoes in a single legislative session was set by Republican Gov. Jim Gibbons in 2009, who vetoed 48 bills. Republican Gov. Brian Sandoval came close in 2017 with 41 vetoes. 

Governor Lombardo’s veto activity in this legislative session is something he predicted on the campaign trail, promising the Nevada voters a check and balance on the legislature, which is controlled by the Democrats. 

However, vetoes aren’t always the last stop for a bill. At the beginning of each legislative session, vetoed bills from the previous session are discussed for reconsideration. A veto override requires a two-thirds vote of both houses of the Legislature. In the Assembly the Democrats do hold a super majority and the Senate is one seat away. So the outcome of the next election cycle could be pivotal towards the ultimate fate of the legislation that was vetoed this session.

PRIORITY ISSUES

As always, but with the monetary stakes higher this session, the Governor and the Legislature had several budget and policy priorities for the session.

State Savings

For the Governor a larger than usual allocation of the budget to savings – $2.2 billion (split between the Education Stabilization Account and Rainy Day Fund) – was part of the budget plan.

Education

Making additional investments in Nevada’s school system was a priority on both sides of the aisle. Governor Lombardo submitted a recommended budget with approximately $2 billion more in funding for K-12 public schools than that of the previous biennium, and that aspect of the budget was approved readily by the Legislature.

He also pressed for an expansion of school choice, seeking to create new financial supports for charter schools as well as increased funding for Opportunity Scholarships, benefiting parents looking for options outside the public school system. While some key reforms, including a reinstitution of the state’s Read By 3 program, were able to be negotiated, major changes were not enacted on school choice this session.

Increasing reports of violence by students towards teachers prompted both the Governor and legislative Democrats to introduce and pass legislation to roll back certain provisions of restorative justice to make schools safer.

State Employee Compensation

A priority for both the Governor and the Legislature was to address state employee pay. Compared to what Nevada local governments and higher education pay, state employees in the Silver State are paid below their peers. State government saw the negative results of this during the COVID pandemic when state employees left service in large numbers saddling most agencies with double digit vacancy rates, and no ability to recruit. Ultimately the state settled on an 8 percent pay increase in the first year of the biennium with an additional 4 percent in the second year and $2,000 per year longevity bonuses.

Health and Human Services

In the healthcare space, the most prominent piece of policy was a change to the state’s medical malpractice cap on non-economic damages. After months of negotiations between doctors and the state’s trial lawyers, a deal was negotiated under which the cap will increase from the current level of $350,000 to $750,000 until 2028, increasing by 2.1 percent yearly thereafter.

The 2023 session saw the issue of physician assisted suicide make it further in the process than has happened in the past. Senate Bill (SB) 239 was passed with bipartisan support and opposition by both houses of the legislature but was eventually vetoed by the Governor.

Governor Lombardo and the Legislature also included several increases in healthcare expenditures in the budget with a focus on behavioral health services and Medicaid provider increases.

The legislature also passed SB 419 which began as a sweeping public health act but was significantly amended. One portion that did stay in the bill was the first steps in providing Medicaid coverage for undocumented people. Coverage for undocumented people is not eligible for the federal match in Medicaid.

Labor and Management

A feature missing in the 2019 and 2021 sessions, having a Republican Governor helped business interests ensure that bills which could be perceived as anti-employer had a much slimmer chance this session. Many of these bills did not make it past the various deadlines and the ones that did were amended to a neutral position for employers as legislators knew they would not get approval by the Governor’s office.

Some bills of note that did not make it were SB 252, which would have added focus groups to the list of recoverable costs in lawsuits; SB 344, which would have required paid time off for employees to attend school meetings and events; SB 271, which would have required the investigation of past complaints in Nevada Equal Rights Commission (NERC) investigations; and SB 427, which would have put in restrictive requirements for heat illness mitigation. This bill will be worked on in the interim with the Occupational Safety and Health Administration (OSHA).

Of the labor/management bills that did pass, SB 145, dealing with employee misclassification and SB 147, dealing with payment of wages upon lay-off were amended and a compromise was negotiated with the bill sponsor.

On the workers compensation front, SB 274, which would have changed the workers compensation system drastically by adding in the ability to sue for bad faith, was amended to remove those provisions but increase penalties for unnecessary delay of claims. Additionally, a consensus bill addressing claims administration was amended into SB 274 to become more of an omnibus bill on worker’s compensation.

Miscellaneous Priority Issues 

Apart from the larger priority issues, both the Legislature and the Governor both saw varying successes in some, less encompassing priority issues. For example, the Legislature’s attempt to pass gun control was unsuccessful. The three bills delivered to the Governor to restrict access to firearms were among his first vetoes of the session.

COVID Cleaning

One of the last vestiges of the COVID era was erased from Nevada’s statutes with the bipartisan passage of a law that reversed the daily hotel room cleaning mandate put in place in 2020.

Although the specifics of the bill were to simply return the processes around room cleaning back to what was acceptable to everyone prior to the pandemic, this turned out to be one of the bigger fights of the session pitting the Culinary Union against the casino resorts. Legislators had to pick a side but, but eventually decided that returning the state to pre-pandemic conditions was the right policy move to make.

Lottery

That same rivalry between the Culinary Union and the casino resorts was also the driving force behind the legislature finally approving the first step in bringing about a state lottery in Nevada. It is a constitutional change. This issue has been brought before the Legislature many times and failed. But this time the initiative was a priority issue for the powerful Culinary Union.

The ultimate approval of the lottery has a couple more steps, however. It must pass the Legislature again in 2025 and then be approved by voters in 2026.

Economic Development

Addressing the state’s vulnerability to industry-specific challenges revealed by the pandemic and subsequent unemployment crisis, two large economic development projects were proposed this session.

The first called for a major expansion of the state’s film tax credits to incentivize development of studio space in Las Vegas and establish the film industry more firmly in Nevada.

The second was a combination of tax incentives and public financing to build a Major League Baseball stadium for the Oakland A’s to move to Las Vegas. Neither bill received a vote in the Senate Finance committee before the session adjourned. However, the A’s stadium issue was taken up again in a special session immediately following the regular session and approved.

Gas Prices

A one year suspension of the $.23 gas tax was sought by the Governor but, this was not ultimately agreed to by the Legislature.

Water Conservation

Though a very wet winter has somewhat eased the immediate issues regarding water in both northern and southern Nevada, water rights remain a pressing concern in the one of the most arid states in the country.

The most significant piece of legislation related to water was Assembly Bill (AB) 220, brought by the Southern Nevada Water Authority (SNWA). While the component that drew the most attention regarded the conversion of septic tanks to municipal water system hookups, there were also provisions related to residential water limitations to be prepared in the event of a cut to Nevada’s allocation of Colorado River water.

The bill was amended prior to passage to include a specific threshold at which these limitations could be contemplated by the SNWA’s Board, with public notice and open meeting requirements before any limitations could be imposed. 

Administrative Agency and Board Reorganization

One of the priority bills for Governor Lombardo was SB 431. In its original form the bill made sweeping changes to the structure of the administrative branch, setting up more of a cabinet type structure. Much of the bill was amended out but it did maintain the consolidation of information technology (IT) services across state government, establishing a Chief Innovation Office to address state employee recruitment and hiring practices. The bill also sets up an office of Boards and Commissions within the Department of Business and Industry to establish consistent operating processes within the variety of professional licensing boards in the state.

Energy

Although some major energy legislation is common each session, and was expected this session, the only bill to pass was AB 524, legislation that declared several energy policy directives for the state. Those diredctives include emphasizing the importance of electric reliability and affordability, as well as the independence of regional energy markets, a thorough utility planning process and a commitment to reducing greenhouse gas emissions. 

In addition, the legislature did pass SB 293, sponsored by the Attorney General’s office, that put in place serious deceptive trade practice enforcement and consumer protections in contracts solar installation companies and salespeople engage in.

State Agencies Appropriations

Since the state has a significant budget surplus, the ability to rectify a lot of technology and infrastructure needs for which funding hasn’t been available in state agencies was possible this session. Once primary agency budgets were settled, the legislature contemplated well over 50 different bills, adding budget enhancements for a variety of tangible agency needs.

“Christmas Tree” Bills

Finally, once all the state needs are addressed and budgets were closed, the Legislature and Governor wrangled over what is called the “Christmas Tree” bills which are a collection of “one shot” appropriations to a broad variety of causes, mostly nonprofit focused. This session there were two such bills, SB 341 and AB 525 which total around $109 million in funds to over 70 different nonprofit organizations.

All-in-all, the 82nd Session of the Nevada Legislature was both eventful and record-breaking. A lot of work was done by Nevada’s elected officials, lobbyists and stakeholders. And this session certainly put the new Governor through his paces. Only time will tell how much of this legislation will pan out, but it’s clear the next few years will be interesting for the Silver State.