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 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 dollars to shore up the rest of the shortfall.
Sisolak said 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.