With barely a week left in the 120-day session, many of the major issues that have dominated discussion among Nevada lawmakers still remain unresolved.
Democrats, who outlined many of their policy goals through the “Nevada Blueprint,” are still in the process of negotiating which of their priorities — from minimum wage increases to criminal justice reform — will find favor with veto-wielding Republican Gov. Brian Sandoval.
And while many of Sandoval’s priorities are moving through the Legislature, his plan to restart Education Savings Accounts remains stuck in legislative limbo and in need of Democratic support. Click here for an update on the politics and policy surrounding that program.
The parties now must give and take to come up with a deal that’s acceptable to both sides. Here’s what’s on the negotiating table:
The Economic Forum projected the state’s revenue sources would yield about $140 million more over three years than forecast in a December projection. But while the budget surplus is welcome news, the money is quickly being swallowed up.
About $78 million in general funds need to go to “one-shot appropriations.” Those include about $63 million for the state’s Distributive School Account because enrollment exceeded forecasts and local school support tax revenue fell short of projections.
There are also one-time expenditures for emergency flood response, overages in the prison medical care budget and greater-than-expected demand for adoption subsidies.
Even after lawmakers closed budgets last Saturday, they’re still hearing bills with fiscal impact that change the balance sheet daily. In addition to the $60 million being held back for ESAs, there’s thought to be about $42 million of the projected revenue surplus yet to be allocated.
The Clark County School District wants to use that to add about $7 million more to the weighted funding formula to ensure all eligible students in 1-, 2- and 3-star schools receive additional funds. The Clark County Education Association, like Sandoval, hopes to to push that number even higher to ensure all 54,000 students statewide who are eligible for an extra “weight” receive it; the existing plan uses $72 million to cover about 30,000 students.
“I've had my priorities. My recommendation was to put it all toward the weights as you know, but there are some other things that they may want to fund,” Sandoval said on Wednesday. “You push in one place, it pokes out another, and we only have a fixed amount of money.”
The state’s largest school district is also holding out for $17 million to buy a human resource management computer program they say is critical to implementing the Legislature-mandated reorganization.
There’s no end to other ideas on how to spend the money, from additional raises for state employees and a higher contribution to their benefits packages to $5 million for a “Nevada Promise Scholarship” that would make community college free.
Lawmakers need to make final decisions soon — they’ll have to vote in the coming week on five major budget implementation bills.
Democrats remain hopeful they’ll be able to pass a bill raising the state’s minimum wage to $12 an hour this session — a proposal that Sandoval still says is still “under consideration.”
The main vehicle for doing so is SB106, which would raise the minimum wage 75 cents a year for 5 years until it reaches $12 an hour. A separate proposal that would have raised the minimum wage to $15 an hour, AB175, was amended to require employers who pay a $7.25 minimum wage to provide a minimum insurance standard equivalent to a Bronze Plan under the Affordable Care Act.
The proposals passed out of the Senate and Assembly, respectively, earlier this month on party lines. Nevada’s minimum wage is currently $7.25 an hour for workers with employer-offered health insurance and $8.25 for everyone else, with roughly 44,000 workers statewide earning less than $8.25.
Sandoval said this week that discussions are ongoing about whether to raise the minimum wage and, if so, to what level. He also indicated that he wants to see laws about when overtime pay kicks in included in the conversation.
“Overtime needs to be discussed in terms of the discussion on minimum wage,” Sandoval said, “In other words, how many hours worked and how overtime would apply to that.”
In 2015, Republicans tried to repeal a law requiring employers to pay overtime after eight hours of work in a 24-hour period, and then tacked on a $9 an hour minimum wage proposal to sweeten the pot. The proposal, which Democrats characterized as “poison,” would have only triggered overtime pay rates once an employee worked more than 40 hours in a week.
If all else fails, Democrats can move forward a minimum wage constitutional amendment, SJR6, which would increase the minimum wage to $9 an hour and, beginning in 2022, increase the minimum wage $0.75 each year until the minimum wage is $12. That measure, which has yet to receive its first vote in the Senate, would need to pass the Legislature this year and in 2019 before going to a vote of the people in 2020.
PAID SICK LEAVE
Democrats amended a comprehensive paid sick leave bill earlier this month to attract support from members of the business community. But it faces an uncertain future as it heads to Sandoval’s desk.
The bill, SB196, sponsored by Democratic Senate Majority Leader Aaron Ford, would require private businesses and employers in Nevada with more than 25 workers offer paid sick time time off, with some exceptions. The legislation, supported by casino giants MGM Resorts and Caesars Entertainment, requires businesses give their employees one hour for every 40 hours worked and caps the maximum total accrual at 80 hours.
The measure passed out of the Senate in April on a party-line 12-9 vote and out of the Assembly last week 25-15, with Democratic Assemblywoman Maggie Carlton joining Republicans in opposition to the measure. Carlton said the measure would “not serve the constituency” that she comes from.
Sandoval has expressed serious concerns about the policy, saying it could harm the state’s business-friendly reputation and stunt economic development in the state.
In his January State of the State address, Sandoval proposed a 10 percent excise tax on recreational marijuana, with about $70 million in proceeds going to the Distributive School Account — the state’s main education funding source.
While his bill remains on the sidelines, the concept is advancing through Democratic Sen. Julia Ratti’s bill, SB487.
Beyond the excise tax, the bill also makes other changes to marijuana taxation, such as imposing a 15 percent wholesale tax on medical marijuana to match the wholesale tax for recreational marijuana. Medical marijuana is currently taxed at 2 percent at the cultivation, production and retail phases; the shift to just 15 percent at wholesale is thought to be revenue-neutral.
Local governments can also impose a business license fee of up to 3 percent on marijuana revenue.
Policymakers hope to keep medical marijuana cheaper than recreational marijuana — something that could be accomplished at the state level by leaving medical pot out of the 10 percent excise tax and at the local level by choosing not to impose a business license fee on medical establishments.
“That was really important to a lot of people — that the medical industry stays intact and that there wasn't so much economic pressure of a shift toward recreational that we aren't taking care of the needs of people … who have a legitimate need for medical marijuana,” Ratti said.
Another $10 million in Sandoval’s budget for local governments to carry out the provisions of recreational marijuana could potentially be earmarked, directing the funds to specific causes such as mental health care.
Senators are scheduled to vote on the bill on Monday, although it could be postponed until legislative leaders achieve a deal on Education Savings Accounts. Democrats need Republican votes to pass the pot tax because of the two-thirds requirement, and Republicans need Democratic votes to pass ESAs.
CRIMINAL JUSTICE REFORM
Dozens of bills, mostly sponsored by Democratic lawmakers, have sought this session to reverse decades of “tough on crime” policies and focus on rehabilitating offenders and reintegrating them back into society. The measures addressed the broad spectrum of the criminal justice system — everything from jail diversion to re-entry and re-employment after an offender has served his or her time.
But Sandoval has expressed an openness to two measures, sponsored by the two Democratic leaders, that would seek to help offenders rejoin society. The governor said in an interview earlier this week that he had asked the two leaders to modify their bills and work out any overlap between the two.
“I want to compliment the speaker and the majority leader on their willingness to work with me to modify those bills,” Sandoval said. “As you know, there was some crossover between the two and some differences between them, and I told them they needed to work that out between the two of them, which they did.”
One of the measures, backed by Assembly Speaker Jason Frierson, would allow certain lower-level felons to immediately have their voting rights restored upon release from prison or discharge from parole or probation. A similar but more expansive attempt to restore voting rights to ex-felons was vetoed by Sandoval in 2011.
In a recent interview, Sandoval went out of his way to clarify that Frierson’s AB181 is very different from the bill he vetoed six years ago.
“I've had constant conversations with the speaker,” Sandoval said. “I have worked very closely with the speaker on that bill and it is very different than the bill that I vetoed a few years ago.”
SB125, sponsored by Ford, makes changes to eligibility requirements for criminal record-sealing, after being amended to remove a voting rights provision similar to the one in Frierson’s bill. The governor said that the dialogue on that bill is ongoing.
Amid a popular ballot initiative that would deregulate Nevada’s energy market and a two-year fight over how to treat and reimburse rooftop solar customers, Nevada legislators are still working on a number of major energy-related bills up until the final few days of session.
Those include bills to restore favorable net metering rates for rooftop solar customers and raising Nevada’s minimum standards for renewable energy generation. Two committee meetings held late last week left legislators with more questions than answers going into the weekend.
Here’s a look at where both bills are with only a week to go in the session.
After more than a year of bitter disputes and a proposed ballot question that was struck down in the courts, Nevada lawmakers are getting close to reinstating a popular system of incentivizing rooftop solar customers.
As amended, the measure would implement two concepts — reintroducing a “net metering” system where rooftop solar customers are reimbursed for “excess” solar energy produced, as well as a number of consumer protections and minimum warranty standards on solar panels.
Unlike the state’s previous net metering program, which reimbursed customers at the full retail price of electricity, the new system would create “tiers” where new customers receive 95 percent of the retail rate for electricity they “sell” back to the grid. Once total rooftop solar penetration reaches 6 percent of the historic peak electricity load — set at approximately 480 megawatts in the bill — the reimbursement rate would drop to 95 percent. The tiers would continue to drop in percentage until it reaches a floor of 80 percent once market penetration hits 10 percent of installed capacity (currently around 2 percent).
Customers who enroll at a certain rate would be able to continue selling back “excess” energy at that rate over a twenty-year period, even if the amount of solar penetration jumps and the tier is lowered. The bill also requires legislators to revisit and possibly revise the system once the final tier is reached.
It also includes several consumer protection provisions, including a requirement that rooftop solar installation companies provide cover pages to customers detailing pertinent information such as costs, timeline of installation and warranty information. The cover pages would need to be available in English and Spanish upon request.
It also requires warranties on rooftop systems cover at least ten years, and creates a “solar bill of rights” for all consumers.
While legislators in the Assembly were mostly on board with the measure, NV Energy has sounded concerns about the potential cost of implementing the new system, saying it would cost $63 million a year and $1.3 billion over a 20 year period. The utility, which offered an alternative net metering plan that legislators didn’t take up, is officially neutral on the bill.
Rooftop solar companies, which consider the bill to be a compromise because it creates a rough estimate of the value of solar below the retail rate, pushed back on the price assumptions and accused the utility of cherry-picking favorable utility-scale solar power purchase agreements to make a misleading assumption.
“NV Energy has consistently put out misleading numbers that don’t take into account the benefits of residential solar to the rest of the grid,” Sunrun executive Alex McDonough said.
The utility does have several more expensive power agreements that what were indicated in the utility’s presentation, but it maintains that older solar energy power purchase agreements were much more expensive.
In a recent interview, Sandoval said that restoring net metering was a “priority” for him, but cautioned that any legislation would need to take into account the possible effects of a deregulated, retail energy market and provide assurances to consumers who enroll.
“I just want to make sure that people who have installed that rooftop solar are protected,” he said. “I don't want the rug to be pulled out from underneath them if energy choice passes, which it likely will because it passed so overwhelmingly this time.”
RENEWABLE PORTFOLIO STANDARDS
Perhaps the most controversial of the myriad of energy bills introduced this session, AB206 would raise Nevada’s minimum renewable energy production standards to 50 percent by 2030.
It would gradually ramp up the state’s current Renewable Portfolio Standard goal by a certain percentage points every two year period, and give “multiplier” compliance credits to use of renewable energy storage systems and geothermal production.
The state’s current RPS standard goal is 25 percent by 2025. NV Energy is currently meeting its required RPS goal of 20 percent but the state’s fuel mix is still mostly dominated by natural gas, thanks to how RPS is calculated and “credits” given for energy efficiency and different multiplier credits.
It would also apply the renewable minimum standards to so-called 704(b) customers, named after the provision in state law allowing large power users who have paid an exit fee to leave the grid and purchase power on the open market.
The bill, which is sponsored by Democratic Assemblyman and longtime energy consultant Chris Brooks, has moved quickly in the last two weeks. It moved out of committee on May 17, and was approved by the full Assembly on Wednesday on a 30-12 vote (all Democrats and Republicans Jill Tolles, Keith Pickard and James Oscarson supported the measure).
Republicans have generally said they support the idea of increasing renewable energy production, but are concerned about how the measure would interact with a proposed constitutional amendment that would create an open retail energy market in the state. Question 3 passed overwhelmingly in 2016, and if passed again by voters, would take effect in 2023.
NV Energy has officially taken a neutral stance of the bill, but has raised concerns that raising the renewable standards would lead the utility to construct renewable plants or enter into power-purchase agreements that it would be forced to divest from in the near future — passing the cost onto electric customers in the state.
That issue has been echoed by several powerful casinos, including the Las Vegas Sands, Wynn Resorts and Nevada Resort Association, which have publicly opposed the bill and on Friday submitted a substantive amendment that would entirely revamp the measure.
The proposal, which is favored by NV Energy, would entirely remove the higher RPS standards from the bill and instead replace it with a requirement that at least 50 percent of “any new electric generating capacity” from a utility come from renewable sources. NRA president Virginia Valentine said the amendment addressed the association’s concerns about doing “too much too fast.”
Pro-renewable groups have by-and-large rejected the proposed amendment, saying that placing renewable minimums in the Integrated Resource Planning process — where utilities plan for energy supply and demand over a three-year period that must be approved by the state’s Public Utilities Commission — is short sighted and won’t guarantee a substantive increase in renewable generation. They’ve also raised concerns that the IRP process won’t apply to future retail choice providers if indeed Question 3 passes again in 2018 and the state moves toward an open retail market.
Gov. Brian Sandoval has played his cards close to the chest on the energy bills, but said in a recent interview that his main concern with the bill was how it would interact with the ballot question, which must pass a second time, that would significantly restructure Nevada’s energy market.
“I'd love to build as much renewable as we possibly can but we have to recognize at the end of the day the ratepayers are the ones who are going to pay for that,” he said. “And if the incumbent utility is required to build new renewable energy that they really don't need, that goes into rates and somebody's got to pay for that and that somebody are the ratepayers.”
Still, the governor’s office is planning to be more involved in energy issues over the next two weeks, with economic development chief Steve Hill taking an active role in policy discussions.
Democratic Sen. Kelvin Atkinson, who chaired the Senate committee, promised that the bill would be “processed,” though final details of what a future amendment will look like are still being negotiated.
Updated at 10:34 p.m. to correct several facts about AB405.
Disclosure: MGM Resorts International has donated to The Nevada Independent. You can see a full list of donors here.