Reno Gazette Journal January 31, 2021
Nevada’s 120-day Biennial Legislative Session is set to convene on February 1st. As with any Legislative Session, there is an associated backdrop. While there will be plenty of time for us to discuss policy between now and May 31st (when the legislature is scheduled to adjourn sine die), this column will attempt to shed light on the themes which will cast a long shadow on the outcomes of the legislative process.
As most of you are probably aware, Nevada’s constitution requires two-thirds majorities in both chambers and the Governor’s signature for any tax increase. In the previous 2019 biennium, the Democrats had a 29-13 majority in the Assembly, which gave them the two-thirds majority in the Assembly with room to spare. On the Senate side, the Democrats had a 13-8 majority which was one short of two-thirds majority needed for tax-increase. In other words, the Democrats needed just one Republican defection in the Senate to increase taxes. With Republicans picking up three Assembly seats and one Senate seat in 2020 election, the Democrats will now need a total of four defections, two in each chamber.
Four may seem like a small number of defections needed to raise taxes until you consider that the Democrats were unable to secure the single Senate Republican defection they needed in the 2019 biennium. While they came close, they were ultimately unsuccessful. In this political environment, any vote to significantly increase taxes will be a death knell for Republican legislators in the primaries. You may recall that in the 2015 legislative session, Republicans joining forces with the Democrats to successfully raise taxes resulted in several Republican legislators losing or retiring shortly afterwards.
Let’s also not forget the fact that several legislators have political ambitions. Assuming Governor Sisolak seeks re-election (rumors abound that he may not), he will be a weak candidate due to his handling of COVID. Congressman Mark Amodei has hinted that he may be running for Governor, which would open the relatively safe Republican Congressional seat. US Senator Catherine Cortez Masto will be up for re-election, although her name has been mentioned as a potential Gubernatorial candidate. All state-wide constitutional offices will be up as well. Republican Senators Ben Kieckhefer and James Settelmeyer are both termed out in 2022. Senator Heidi Gansert will be in the middle of her 4-year term in 2022 and is said to be eyeing higher office. Assemblywoman Jill Tolles’ name has been floated as a possibility for US Senate. Given all of that, the chances of Republican support for any significant increase in taxes this session is very low.
One final point: Governor Sisolak’s proposed budget cuts a mere two percent over his previous biennial budget. Given the COVID shutdown, the budget cut seems too little. There is already a gap of approximately one billion dollars between what the Governor’s state agencies are asking for, and his budget. Nevada currently has the highest unemployment rate in the country. While the true depth of our crisis has been hidden behind federal stimulus, sooner or later federal unemployment checks and stimulus checks will go away. Travel, which generates significant revenues for the casinos (and in turn for the state), will take much longer to get back to normal. Convention travel to Las Vegas and Reno will lag. Mortgage forbearance, critical now for Nevada’s families, will eventually go away further exacerbating the financial conditions. With these and many other storm clouds on the horizon, deeper cuts will likely be necessary as tax increases are highly unlikely.