Nevada Legislature: $1.1 billion ‘Nevada Revenue Plan’ approved; largest one-time tax increase in history of state

Lawmakers shut down the 2015 Legislature Monday night after approving a state budget totaling more than $19 billion for the coming two-years.

They did so with more than an hour to go, leaving some time for other measures sought by one or both houses.

The battle since January when Gov. Brian Sandoval delivered the State of the State address wasn’t over his proposals to increase education funding, expand services to the poor, provide for special education, statewide full-day kindergarten and educational choice for parents. Lawmakers from both parties largely supported those programs as the correct way to improve the state’s abysmal K-12 performance. The battle was over how to pay for the proposals.

That question that didn’t get resolved until Sunday night when the Assembly approved the tax package generating some $1.1 billion to pay for it all.

That package brought the total General Fund budget to just over $7.3 billion for the coming biennium including some $3.69 billion in education funding.

The remaining $11.7 billion is in the Authorizations Act which spells out how all the rest of the state’s revenues — primarily federal funds — will be spent. The biggest pieces of that pie are in Medicaid, Medicare, Nevada Check-Up and other entitlement programs.

“This vote symbolizes the turning of a page to a new chapter in the incredible story of the Nevada family. This plan is a blend of the very best ideas forged from bipartisan compromise with the vision of working toward fulfilling the principles and priorities of the New Nevada and the Nevada Blueprint,” Sandoval said. “The legislature faced many challenges this session but none greater than the task of changing our education system to ensure that every child is given the opportunity to receive a first-class education. The passage of this bill begins a new era of public education in Nevada, a time when our students and schools are a priority in our communities.”

The critical tax plan passed the Assembly by a vote of 30-10 — two votes more than needed to reach the two-thirds majority.

“I understand why the word historic has been used a lot today,” Democratic Senate Minority Leader Aaron Ford said in a speech in the crowded Senate chambers on Monday. “It’s historic that we’ve finally reached a consensus in this building that funding our kids’ futures cannot wait.”

Of the 25 Republicans in the Assembly, 13 joined the 17 Democrats in supporting the plan including Erv Nelson, R-Las Vegas, who told fellow Assembly members he came to the 2015 Legislature a staunch tax opponent but changed his mind during session.

“I was misinformed,” he said. “I made mistakes. I sat and spouted the party line and I was wrong.”

Nelson said in listening to both sides, he now feels the governor’s plan for educational reform, that the tax plan he proposed are the right way for Nevada to go and that he would be voting for it.

“The leadership of both houses should be ashamed of themselves to force through the largest tax increase in Nevada’s history that includes the type of tax that voters did not support,” said Sen. Don Gustavson, who voted against the proposal along with fellow rural Republican lawmakers Sen. Pete Goicoechea and Sen. James Settelmeyer. “And you wonder why our constituents distrust politicians? Well you’re looking at them.”

In the final week of session, lawmakers beefed up the budget using added revenues from updated projections, the tax package and revenues expected from bills including allowing ride sharing services like Uber and closing loopholes in the Live Entertainment Tax.

Those sources and cuts within the budget generated enough extra cash to give state workers their first cost of living raises in 10 years: a 1 percent bump in fiscal 2016 and a 2 percent increase in 2017. Those raises will cost just over $36.6 million over the biennium.

Other late additions to the spending plan included restoring the ”bridge funding” designed to help Western Nevada College and Great Basin College transition to the new university system funding formula that shifts the emphasis more toward the universities by rewarding full-time students over the part-timers who typically attend community college.

The Board of Regents included that bridge funding but, even while touting the community colleges as producing the trained workers who will fill high-tech jobs at Tesla and other companies being brought to Nevada, Sandoval cut the money out of the budget.

After a strong push from concerned lawmakers including Carson Assemblyman P.K. O’Neill and Eureka Senator Pete Goicoechea, the $4.95 million was put back in the budget.

That translates to $1.5 million a year more for GBC and $1.1 million in 2016 and $750,000 in 2017 for WNC.

Another $477,312 was put back in the Desert Research Institute budget in recognition that DRI suffers under a weighted per-student formula since, as a research institution, it has very few students.

The Associated Press contributed to this report.