The Senate Finance Committee voted unanimously Tuesday to again amend a bill distributing the first round of bonuses for state workers this year, reversing a decision by the Assembly to exclude Nevada System of Higher Education (NSHE) professional employees under concerns that the bill was “significantly underfunded” in its original form. 

The move ends weeks of unexpected legislative whiplash over the bonus bill, driven by bicameral confusion over competing budget math and complicated calculations over how much different employee groups would cost to include.

AB268 would distribute the first $1,000 of a planned $2,000 in annual bonuses proposed by Gov. Joe Lombardo’s office as part of a broad plan to retain existing state workers and stem ballooning vacancy rates across state government. After the latest amendment, the bill will allocate nearly $25 million to fund the first round of bonuses. 

Those bonuses are set to be distributed in $500 quarterly chunks. In order to beat fast-approaching fiscal year deadlines, lawmakers quickly processed AB268 in a bid to release the first set of bonuses before the end of the first quarter this month. 

However, members of an Assembly budget committee amended the bill — which stipulates that the bonuses are to be paid to state workers employed as of March 31 and June 16 — to exclude NSHE employees, citing a lack of clarity over how the bonus bill would cover the higher education system’s employees.

The new amendment from the Senate would give NSHE a lump sum of $3.5 million for employee bonuses, leaving it up to system and institution officials to distribute that money and report to the Legislature on how they awarded bonuses. The amount appropriated to NSHE under the amended bill would not be enough to cover all 4,100-plus state-supported NSHE professional employees.

NSHE Chief Financial Officer Andrew Clinger told The Nevada Independent following Tuesday’s committee vote that the system could ultimately implement a cap that would give employees under a certain salary threshold the bonus, excluding the highest-paid staff.  

“The chancellor had presented before the committee [last week], and one of the things that we had talked about before was limiting it based on salary, so picking some salary level to cut it off at,” Clinger said. “So that's one option. There's other options to look at too. I just need to talk to the chancellor and insert that piece.”

In a roughly seven-minute monologue, Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) laid out the justification for the amendment, saying that lawmakers had not intended to “isolate a particular group.” But she also stressed the tight internal timeline to pass the bill and the unclear level of appropriations needed to provide the bonuses to NSHE employees.

She added that through the budget process, the committee still needs to discuss including NSHE professional employees in a Lombardo proposal to pay similar quarterly $500 bonuses in the upcoming two-year budget period. With $3.5 million set aside for just two such bonuses, she estimated that paying those employees further bonuses could ultimately cost closer to $20 million during the upcoming biennium.

“I feel as though some of the conversation was, ‘We can absolutely afford this. It's just $3 million or $4 million or somewhere in that vicinity,’” she said. “When we are talking about that as a committee and talking about how we are going to value state employees, we also have to take into account what effect that may have over the course of the biennium as we prepare this budget.”

Multiple sources also indicated that lawmakers have privately raised concerns over distributing bonuses to the highest-paid NSHE employees, who are exempt from state laws capping state workers from being paid more than the governor. That includes clinical and executive salaries into six and seven figures, a group ranging from university presidents to medical school faculty to high-profile coaches. 

Differences between the amount included for bonuses under the original language of the bill ($23 million) and the amount requested in the governor’s proposed executive budget ($20 million) also sparked confusion between lawmakers and the governor’s office.

On the Assembly side, Ways and Means Committee Chair Daniele Monroe-Moreno (D-North Las Vegas) argued that even with the $23 million included in the bill, that money would not be enough to cover bonuses for all state workers. The committee opted to exclude more than 4,100 NSHE professional employees, while adding in bonuses for year-round legislative staff and employees of the Public Employees’ Retirement System.

But higher education officials with NSHE, individual institutions and the Nevada Faculty Alliance (NFA) sharply criticized a move that excluded thousands of faculty — many of them paid less than the state worker average — from receiving the bonus.

Partly at issue was a running disagreement over just how many NSHE employees counted as “professional staff” and how those employees were calculated as part of the governor’s office math in determining their appropriation request. As AB268 worked through the Assembly side, it was unclear if lawmakers were working with the combined number of all NSHE employees (roughly 22,000 people) or the smaller total of professional staff alone (closer to 7,700 people). 

Within those professional employees, only a subset — roughly 4,100 — are funded by state dollars and therefore traditionally subject to state boosts to government worker pay.

Also confounding lawmakers: Just how much money needed to be allocated to cover higher payroll taxes brought on by the bonuses? 

The Governor’s Finance Office originally left the payroll tax calculation out of the original appropriation proposed in the executive budget. But representatives from the office told the Senate Finance Committee last week during a hearing on the bonus bill that they now wanted to add back that money, in addition to a requested appropriation to cover NSHE professional staff. 

But in an extended and at-time circular exchange last week, Cannizzaro pressed Lombardo’s Chief of Staff Ben Kieckhefer over the amount needed to cover payroll taxes — suggesting once again that the bill would not contain the funding necessary to cover the tax and the add-back of NSHE professional workers. 

As amended now to include faculty, the bill will head to a vote from the full Senate, which is likely to take up the measure this week to ensure Lombardo can sign the bill by March 31 — a key date listed for when workers must be employed to receive the bonuses.

This story was updated on Friday, March 31, 2023, at 12:15 p.m. to correct the amount of the recommended annual bonuses to be awarded through AB268. The recommendation is $2,000 annually, distributed at $500 per quarter.