The 2017 Legislature will convene in February.
When the 2017 Legislature convenes February 6, the 63 members will face a long list of growing state needs and potentially contentious issues.
They range from efforts to revive the school vouchers program to fixing water law to prevent over-appropriation of ground water basins, abolishing the death penalty and expansion of the newly created UNLV medical school.
To deal with the fiscal and other issues is a legislative roster that includes 17 new faces — 14 in the Assembly and three in the Senate.
But almost everything on that list, as it always does, boils down to money. Preparing for the worst, Gov. Brian Sandoval instructed his agencies to detail potential 5 percent cuts to their current spending.
But the Economic Forum, which projects General Fund revenues for the coming two years, actually authorized the governor and Legislature more money than many had predicted.
The forum projections, which must be used to build the state budget, increase the total they can spend by $541.3 million over the current biennium to $7.89 billion. Many saw that as reducing if not eliminating the need for those types of cuts.
However, much of that added cash will be taken up by rising costs that are outside of state control.
The biggest increases will be in the Medicaid program, already the largest budget in the state at $6.4 billion. That’s $5.3 billion in federal money and $1.1 billion in state cash.
The immediate problem is that, beginning this month, the government is reducing the percentage it pays for the so-called “newly eligible” Medicaid participants who were able to get coverage under the Affordable Healthcare Act. Instead of paying 100 percent for those Nevadans, the percentage drops to 95 percent. It will drop to 90 percent by 2020.
With more than 650,000 participants, a large number of them “newly eligible,” Sandoval’s Chief of Staff, Mike Willden, said Medicaid and Nevada Check-Up will need $60 million more in state money the first year of the new budget and $88 million more the following year.
That eats up almost $150 million of that $541.3 million in added General Fund revenue.
The other potential issue is, the federal government pays 60 percent of the rest of Medicaid costs. State officials initially expected that to go down as Nevada’s economy and personal income recovered from the recession. Fortunately, because of the complex formula that sets that percentage, Nevada’s rate will remain at 60 percent this year. But even a fractional decrease next year could cost the state a lot.
At the same time, state agencies have requested $300 million more than the $7.89 billion available — a total of $8.2 billion — and only a tiny portion of that is in new or expanded programs. Like Medicaid, some of those expansions also are outside state control, the key one being medical and pharmaceutical inflation.
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One of the hot issues facing lawmakers is the drive to revive the school vouchers program, outgoing Senate Majority Leader Michael Roberson’s signature accomplishment from 2015. The so-called Educational Savings Accounts were upheld as potentially constitutional by Nevada’s Supreme Court. But that same court found the funding mechanism — taking the cash out of the K-12 school budget — unconstitutional.
Sandoval has promised to include funding for the program in his recommended budget but, since the Democrats have retaken control of both the Senate and Assembly, the program’s chances of survival are greatly diminished. With more than 7,000 families applying for vouchers worth $5,100 or so a school year, the program would cost the state more than $35.7 million the first year alone and is projected to expand dramatically in succeeding years if the program goes forward.
Southern Nevada lawmakers met last summer and announced that their top economic development priority was the UNLV Medical School created in the final days of the 2015 session. They called for the school’s budget to more than double from $12 million to $29 million.
That priority was established before the Las Vegas Raiders stadium proposal was advanced in a special legislative session this fall.
Several lawmakers have called for changes to Nevada water law that, currently, doesn’t regulate domestic groundwater wells. The result of that is a growing number of basins around the state are over appropriated, their groundwater levels slowly deteriorating. The result is growing numbers of regulatory and legal battles over the water. Those sorts of battles have raged for more than a century over Nevada’s relatively scarce surface waters. As Mark Twain put it, “whiskey’s for drinking, water’s for fighting.” Altogether, there are more than a dozen bills that propose changes to state water law.
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Throughout the budget building process, there have been repeated suggestions that Sandoval wants to do for the state’s system of higher education what his 2015 budget did for K-12 — putting more funding not only in the UNLV Medical School and Graduate Medical Education program but the core university system itself.
Advocates for Western Nevada and Great Basin colleges, which suffered serious budget cuts through the recession, are arguing more forcefully than ever that the governor and lawmakers can’t continue to charge them with the responsibility for turning out skilled workers for projects such as those by Tesla and Faraday Future while simultaneously refusing to increase their funding.
They will find out if anyone was listening when the governor releases his recommended budget.
A bill expected to generate a lot of controversy is the measure by Assemblyman James Ohrenschall and Sen. Tick Segerblom to abolish Nevada’s death penalty. If the bill fails or Sandoval vetoes it, Ohrenschall has said he’ll take it to a vote of the people complete with evidence that getting to execution day costs far more than life in prison without possible parole.
There are nearly 100 on Nevada’s death row, one of those cases dating to the late 1970s.
Finally, prefiled Senate Bill 80 would strip away the independence of the Public Employee Benefits program, converting it into a division of the Department of Administration run by an advisory board that no longer appoints the director or has the power to actually run the program. The bill does the same with the deferred compensation committee and gives the Board of Examiners control over awarding contracts in both programs.
The 2017 Legislature begins Feb. 6.