Lawmakers OK $600 million in American Rescue Plan spending
Nevada received $2.7 billion from the federal American Rescue Plan (ARP) last June, launching conversations about how best to use the money to help the state recover from the devastating economic and public health consequences of the COVID-19 pandemic.
Now, ten months later, state officials have obligated more than half of those funds for dozens of different purposes, including allocations of $250 million for affordable housing projects and $204 million for broadband internet.
Altogether, members of the Interim Finance Committee — a group composed of one-third of the Legislature that helps oversee the inner workings of the state budget outside of normal legislative sessions — approved nearly $600 million in allocations of ARP state general aid on Thursday.
President Joe Biden signed the ARP into law in March 2021, directing nearly $7 billion to Nevada. That amount included $2.7 billion in flexible aid for the state government, and lawmakers in Carson City obligated roughly $770 million of those flexible funds during the legislative session. Among the allocations, $335 million went to repay loans from the federal government used to sustain unemployment benefits and $215 million was funneled toward education as part of a deal to create a new tax on the mining industry.
Since the end of the legislative session last year, state officials have obligated an additional $652 million of those funds, including nearly $20 million for COVID-19 treatments and $21 million for a nurse apprenticeship program. Throughout the interim, the governor’s office has typically introduced those allocations, which then go to the finance committee for approval.
While discussions on Thursday of a quarter-billion dollar housing initiative proposed by Gov. Steve Sisolak drew lots of questions and ire from several committee members, lawmakers signaled greater support for other major allocations, praising a $100 million earmark of ARP funds for state agency programs. The set aside of those funds is meant to streamline their use for projects proposed by state agencies, while allowing the finance committee to oversee and approve each individual proposal.
“Basically we're allowing one pitcher of $100 million, and we're going to have multiple catchers of all those dollars,” Assemblywoman Maggie Carlton (D-Las Vegas) said. “All those catchers will be coming to IFC, so we will be able to review them and hold them accountable.”
Even with $100 million set aside for various state agency programs, lawmakers approved just five allocations of those funds, totaling less than $6 million. The largest among those five was a transfer of $5 million to the Department of Agriculture to support an ARP food insecurity program, aimed at helping food-insecure Nevadans affected by the COVID-19 pandemic.
But a $320,000 contract to evaluate staff recruitment and retention efforts sparked the most contentious discussions. Several Republican lawmakers took issue with spending more money to study retention of state government employees.
“We have already heard we can't pay enough to our state police officers,” Assemblywoman Robin Titus (R-Wellington) said. “We know the issues, and then having another study when we're not solving issues is frustrating.”
Ultimately, lawmakers did approve the allocation for the contract unanimously, after Assemblywoman Sarah Peters (D-Reno) clarified that the funds would essentially be used to help streamline outdated human resources policies in state government. The contract calls for a consultant to review regulations and laws “that present roadblocks to recruitment and retention.”
Lawmakers also moved forward a more than $200 million investment in expanding the state’s fiber infrastructure.
The governor’s office of science, innovation and technology (OSIT) estimates there are 450,000 Nevada households that are “unserved,” meaning they lack a broadband internet connection that meets the minimum speed standards established by the Federal Communications Commission.
The ARP funds will supplement state funds, federal matching funds and other federal grant funds from the Infrastructure Investment and Jobs Act for a greater half-billion dollar investment in broadband, aimed at establishing “universal access to high-speed broadband that is affordable, reliable and scalable by 2029.”
Of the $203 million in ARP dollars, $93 million will be used to connect nearly every state government facility to fiber internet. Brian Mitchell, director of OSIT, said Thursday the project would include building more than 700 miles of fiber to connect 223 state facilities, including courts, schools, libraries and buildings for other state agencies.
“Not only do we want to connect as many Nevadans as possible, but we also want these funds to be used for long-term transformative investments in infrastructure assets that will benefit the state and its citizens for the next 30 to 40 years,” Mitchell said.
Another $10 million of the ARP funds will go toward a greater $40 million project to improve connectivity for tribal communities, and $100 million will be used for “broadband deployment, mapping and adoption projects,” through the Broadband Equity, Access and Deployment (BEAD) program established by the federal infrastructure bill.
Boost for opioid crisis response
Outside the slew of approvals for ARP allocations, lawmakers accepted a variety of health care-related grants from the federal government, including $6 million from the State Opioid Response (SOR) grant program.
Cody Phinney, an administrator at the Division of Public and Behavioral Health, said the funds would help ensure the state has the right structure in place to address the opioid crisis, especially as the state is set to receive hundreds of millions of dollars from settlements reached with major drug companies involved in the opioid epidemic.
“We're moving out of that crisis management mode,” she said. “[We’re] really focusing on making sure we have good balance between the urgent clinical issues of keeping people alive and keeping people from overdosing and making sure that all of those services are getting planned and put out into the community.”
DMV modernization still on track
In the midst of a major redesign of its online system expected to be completed in 2026, lawmakers approved a small boost in funding for the Department of Motor Vehicles (DMV) to continue with the project.
Despite some staffing issues identified by the DMV, including a delay in outside contractors getting started, DMV administrator Molly Lennon said the department has met its milestones and is still on track for completing the project. She also pointed out that a $9.4 million increase for the modernization project was in part to keep certain software contractors on board for the entire project.
Some of the approved funding was intended to make up for the loss of more $6 million in funds accrued through $1 technology fees. Last year, the Nevada Supreme Court ordered the DMV to pay back those collected fees, ruling an extension of the collection period unconstitutional because it was approved without the two-thirds majority support necessary for any tax bill.
On Monday, the DMV began issuing refunds for individuals who paid the $1 technology fee between July 1, 2020, and Aug. 31, 2021.
Community recovery grants
Though lawmakers spent no time discussing them, they approved four new ARP grants for nonprofits, including the largest allocation of funds yet through the state’s community recovery grant program.
The Legal Aid Center of Southern Nevada was awarded $2.6 million for a project aimed at helping students with disabilities gain access to educational services. In particular, the program will focus on providing services to underserved students, including those in the foster care and juvenile justice systems and children from low-income families.
Helping Hands of Vegas Valley will receive nearly $630,000 for delivering meals to seniors living in rural communities, and the Carson City Senior Center will get $25,000 to continue its senior nutrition program while its kitchen remains closed for critical repairs.
Lawmakers also approved awards of $170,000 to Moxy Up, a Douglas County-based group that provides educational assistance and crisis services to children in need, and $100,000 to Safe Nest, to help the organization provide mental health services to victims of domestic violence.
Despite a flurry of funding approvals at the IFC meeting Thursday, the state has not finished doling out the federal relief money. The state has $1.3 billion in unobligated funds out of the $2.7 billion in ARP state general aid, according to the Legislative Counsel Bureau’s Fiscal Analysis Division.