Nevada’s Democratic legislative leaders said on Tuesday that communication with Republican Gov. Joe Lombardo has improved as crucial end-of-session dealmaking begins but that lapses still happen, while top Republican legislators appeared open to supporting Democrat-sponsored legislation capping insulin at $35 a month under private insurance.

In a wide-ranging conversation with The Nevada Independent CEO Jon Ralston and Capital Bureau Chief Tabitha Mueller, some of the Legislature’s top party leaders also disagreed on the Silver State’s economic outlook and continued their dispute over the funding mechanism for charter school teacher raises.

The roughly 90-minute IndyTalks discussion featured the top legislative Democrats — Assembly Speaker Steve Yeager (D-Las Vegas) and Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) — in addition to Assembly Minority Leader Greg Hafen (R-Pahrump) and Sen. John Steinbeck (R-Las Vegas), who filled in for Senate Minority Leader Robin Titus (R-Wellington).

The event at the National Automobile Museum in Reno came with less than three weeks left in this year’s legislative session, with plenty of work left on lawmakers’ plates. They must pass five budget bills and come to agreement on wide-ranging proposals on housing, health care, K-12 education and the state’s film tax credit program, all while dealing with a precarious budget situation that will make it harder to pass legislation with a price tag.

Lawmakers also discussed housing policy, the state’s rainy day fund, their relationships with Lombardo and the effects of the Trump and Biden administrations’ policies on Nevada’s economic outlook. 

Read on for highlights.

Lombardo dynamic

In light of Lombardo’s record-setting 75 vetoes from the 2023 session — something the governor himself described as “bad government” and that he and legislators chalked up to lack of communication — legislative leaders fielded questions about avoiding a similar clash this time around. 

Asked how they would rate Lombardo’s engagement with the legislative process on a scale of 1 to 10, Yeager and Cannizzaro both said “an 8 or a 9,” but acknowledged it was not that way at the start of the session.

Disputes over Lombardo’s recommended budget — which initially had a $335 million structural deficit — stymied communication at the onset, the Democrats said, but that has improved of late.

“I think we're at a really good place right now, having very productive discussions,” Yeager said.

Still, they acknowledged that lapses persist, as shown through the recent dispute over charter school teacher raises.

After Democrats on a budget committee blocked Lombardo’s request for the raises (while saying they supported the idea, albeit through a different funding mechanism), Lombardo said that he would veto any education budget bill without the raises included.

The Democrats said they had no idea this was his position.

“That was never in any conversation that I had,” Cannizzaro said. “That was something that we learned in a press release.”

Meanwhile, Hafen said that Republican legislative leaders — who run caucuses with significant minorities in both chambers — have a strong relationship with Lombardo. He described Lombardo’s approach to the legislative process as “hands on, but it's also hands off.”

“His door’s always been open,” Hafen said. “He wants us to do our jobs as legislators.”

Another looming issue was Lombardo’s potential vetoes.

Yeager expressed frustration with a lack of feedback from the governor’s office. Even when legislators make changes to accommodate some of the governor’s concerns — often based on their interpretation of prior veto messages — Yeager said they often still don’t know the governor’s stance. 

“There's a lot of time and energy put into those bills, and you don't want to see it get vetoed,” Yeager said.

Economic picture

A significant point of contention was the state’s economic outlook — and whose policies are to blame.

For the first time since 2009, economists on the Economic Forum lowered their revenue projections for the next two years in the middle of a legislative session, leaving the upcoming two-year budget $191 million smaller than what was originally estimated. Additionally, projections for the State Education Fund decreased by about $160 million, largely because of projected lower revenue from local taxes.

Democrats were pessimistic about the economic outlook because of the Trump administration’s economic policies, including its tariffs and antagonistic trade policies (a point echoed by the forum), which already appear to have slowed Canadian travel to Las Vegas. 

“The federal government is actively hurting the state,” Yeager said. “I would love to give you great news, but I'm looking at the weather forecast, and I only see storm clouds.”

Hafen was more optimistic about the state’s economic picture, citing favorable stock numbers and easing inflation nationwide (the latest monthly inflation rate showed significant slowing). He said the Biden administration’s policies — namely the infusion of federal funds through the American Rescue Plan Act (ARPA) — drove inflation.  

“Are people paying more today than they were four years ago? Absolutely they are, because we had infusions of COVID dollars that caused a lot of inflation,” he said.

Cannizzaro strongly objected to linking the infusion of these dollars to the state’s economic uncertainty because the downgraded revenue projections came after Trump took office, not earlier.

“If you're talking to our major industries, they are talking about seeing immediate effects of the chaos happening in Washington, and failure to recognize that as a huge part of this problem,” Cannizzaro said. “Attributing it just to ARPA dollars is trying to turn a blind eye to the reality of what is happening.”

Legislators did agree on deciding that the state should not yet tap into the rainy day fund, a pool of money to be used during emergencies, but for different reasons.

Hafen said that “I don’t think there’s a need” — saying it should be used for more dire economic situations. Democrats credited the legislative money committees for their resourcefulness in helping the state weather some of the current storm but were hesitant to use the fund considering more trouble may be down the line.

“The question is ‘how bad is it going to get?’” Yeager said. “There’s nothing that indicates we’re going to go the other direction any time soon.”

Policy areas

Housing

Cannizzaro said Republicans and Democrats have a shared desire to address accelerated housing costs.

Outside of bipartisan calls for the federal government to release more land for housing development, Cannizzaro noted the governor has indicated support for policies that Democrats have championed, including cracking down on corporate housing purchases.

Yeager said Democrats are open to some of the proposals in Lombardo’s housing bill, such as incentivizing development of affordable housing, and expects some portions will become law. Still, he’s worried that tariffs from the federal government could drive up construction costs, making the projects unfeasible. 

More land is great, Yeager said, but building housing on existing land is also essential. He is having conversations with the governor’s office about how to avoid vetoes of tenants' rights bills and about measures going through the Legislature to allow for accessory dwelling units that can help with infill development.

Steinbeck, a former Clark County fire chief, acknowledged concerns about sprawl that can increase wildfire risk and strain infrastructure but said that “shouldn’t stop us” when it comes to building much-needed housing inventory.

As speculation has risen about an effort by NV Energy to address wildfire liability for utility companies, Cannizzaro said conversations are taking place, but she hasn’t seen bill language. 

Paid family leave

Asked about his support of Assm. Selena La Rue Hatch’s proposal (AB388) to significantly expand paid family leave policies, Hafen avoided a direct answer and pivoted to say he supported a proposal (AB112) from Assm. Duy Nguyen (D-Las Vegas) ensures that employees can use sick leave for immediate family care, regardless of union status.

Opportunity Scholarships

Opportunity Scholarships — a needs-based scholarship for low and certain middle-income families to attend private schools — has become a political flashpoint in the past years, as Democrats have raised doubts about how the program is administered and say public resources are better spent in public schools. 

Yeager said he hopes there’s reform to the program.

“Before we ever think about additional funding, there's got to be some changes to that program. It's a disservice the way that it is run,” Yeager said.

Cannizzaro also said there is not enough support in the Senate Democratic Caucus to expand the program.

Film tax credits

A topic that has dominated the legislative session is more than an eightfold increase of the state’s film tax credit program to spur movie production in Nevada. As two competing film tax credit expansion proposals go before the Legislature, Cannizzaro declined to say whether either of the proposals may pass.

She said the main question is whether the proposals pencil out, which hasn’t been answered yet. She said there are also questions about whether the governor will sign the legislation. 

Still, she didn’t answer questions about what the governor has said to her about his stance on the proposals.

Health care policy

One of the governor’s key health care proposals includes splitting the Department of Health and Human Services into the Department of Human Services and the Nevada Health Authority — a measure that the Lombardo administration has characterized as a way to boost the state’s power when negotiating with insurers and ultimately lower costs. 

A budget implementation bill recently arrived, and lawmakers on the panel indicated that the plan would likely move forward.

Panelists also appeared supportive of a bill Yeager recently introduced to cap the cost of insulin at $35 a month for people on private insurance.

Hafen said he liked the concept of the bill, and is planning to speak with Yeager about the proposal. Steinbeck said that, on its face, he would support the legislation.