With just hours left before a deadline to sign or veto a pair of major government funding bills on Wednesday, Gov. Joe Lombardo’s Chief of Staff Ben Kieckhefer told The Nevada Independent that the governor is fully prepared to veto those budget bills if the governor’s legislative agenda does not move forward.

“It's not our goal to veto that budget,” Kieckhefer said in an interview. “Our goal is to get the governor's priorities moving.”

Since mid-May, Lombardo has twice threatened to veto the state budget in retaliation for Democratic legislative leaders failing to advance a handful of key policy bills sponsored by his office. That includes major expansions of school choice scholarships, an overhaul of state government, a substantial repeal of Democrat-backed criminal justice reforms from 2019 and the creation of a new voter ID law. 

However, Kieckhefer said Democratic leadership and the governor’s office are progressing on a deal to avoid a budget veto. Kieckhefer said he was “cautiously optimistic” about avoiding a special session stemming from budget vetoes — the first two major budget bills (the K-12 funding bill and the Authorizations Act) must be signed or vetoed by the end of Wednesday.

“We are in really positive negotiations with the speaker and the majority leader over what's going to constitute an adequate blueprint on that,” Kieckhefer said. “So I'm not going to be able to give you anything definitive, ‘This has to happen or that has to happen,’ but whatever happens, we have to feel confident that the governor’s policy priorities are moving toward his desk.”

Democrats hold 13 of 21 seats in the Senate, just one seat short of the two-thirds supermajority of 14 votes needed to override any gubernatorial veto. In the Assembly, Democrats hold a supermajority 28 of 42 seats. 

Assembly Democratic Caucus Director Leo Villalobos said negotiations have been “extremely positive” and Assembly leadership is optimistic that “both chambers and the governor’s office will find common ground in the next few days.”

Sources close to Senate leadership also confirmed that negotiations related to the budgets are ongoing and the conversations have been “positive.” 

If negotiations do not advance, Lombardo could veto the K-12 funding and Authorizations Act first two major budget bills by the end of Wednesday, while his deadline to sign another two (the Appropriations Act and state worker pay bill) is Thursday. The fifth bill (the Capital Improvement Program) requires a two-thirds vote to pass, and has not received a vote in the Senate as of Wednesday afternoon.

“There are always gives and takes in this process, but we're focused on achieving what the governor came here for,” Kieckhefer said. “We believe that we are reasonable partners with the Legislature in finding solutions and we think that we can get this done if we have reasonable partners on the other side. And right now I believe we do.”

Kieckhefer also said he believed a pair of proposals to use large amounts of tax credits to support a new Major League Baseball stadium in Las Vegas and vastly expand the state’s film tax credit program were not “mutually exclusive.” However, he said the proposed $190 million in annual film tax credits represents “general fund liabilities unlike anything we've looked at previously.”

Find summaries of other topics Kieckhefer discussed below.

Pressure on moving Lombardo’s priorities

The budget threats have yielded movement on at least one of Lombardo’s bills — AB330, which aims to repeal much of a bipartisan 2019 law creating a restorative justice discipline regime for K-12 schools, and which has since come under intense scrutiny. It also loosely mirrors another bill, AB285, backed by Democrats, that would overhaul the same law. 

After failing to advance past a recent legislative deadline, Democratic lawmakers granted Lombardo’s AB330 a retroactive waiver, allowing it to move forward without being subject to legislative deadlines. The bill moved out of committee Tuesday night without recommendation and awaits a vote on the Senate floor.

Kieckhefer said “we’re close” to a potential deal on the pair of school discipline bills, noting in particular that “a lot” of the changes being sought by Lombardo’s office have already been incorporated” to the Democrat-backed bill, AB285. Lombardo’s bill, AB330, could also receive a floor vote as early as today.

Though portions of two other Lombardo policy bills have been added into other measures — including a proposal to lift the cap on state employee pay added into one of the major budget bills, and accountability measures from his school choice bill, AB400, amended into SB98 on Wednesday — time is quickly running out to move other Lombardo-backed proposals forward, with fewer than six days left until sine die, the constitutionally mandated end to the 120-day session on June 5.

“The lack of time helps. I think the pressure of staring down sine die helps people reach across the aisle and helps people find compromise,” Kieckhefer said.

Kickhefer also addressed a statement he made in May indicating that even if no policy bills passed during the session it would be a good outcome if lawmakers were able to pass a balanced budget.

“Everyone wants to make progress on policy,” he said. “The idea of walking out of the legislative session without creating more accountability for our school system, while putting in $2.3 billion in new money doesn't really fit. So we would like to see policy priorities achieved. The Legislature has their priorities as well. I think walking away with five [budget] bills signed is probably not anybody's ideal outcome.”

Kieckhefer said the governor’s office would be prepared to go to a special session, if necessary, to pass a budget. He also did not rule out the possibility that a special session could be used to address policy priorities, despite Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) saying last week she would not be open to nonbudget policy discussions in a special session.

“In the unfortunate event that we end up with a special session, the governor has discretion to set the agenda and help put on the agenda what he thinks is best,” Kieckhefer said.

Budget negotiations

Kieckhefer echoed comments made in recent weeks by legislative Republicans who have warned of the potential downsides of using any one-time dollars for recurring expenses.  

“We're evaluating the budgets based on any fiscal cliffs that are being created, and the growth that is included in some of those bills and whether it is going to be sustainable in future years, coupled with whether we have savings that are necessary to smooth out any potential downturns,” he said. 

To that end, Kieckhefer pointed to proposed state funding for 600 preschool slots recommended in Lombardo’s budget that legislative Democrats moved to fund instead using one-time federal American Rescue Plan Act (ARPA) money. 

“We know the ARPA funding won’t be there,” Kieckhefer said. “So if we run into tougher times, it'd be nice to have those general funds already dedicated to that need.”

The two sides have also notably differed on their proposals for state employee pay — with Democratic lawmakers pushing forward slightly larger raises, smaller quarterly bonuses and cuts to employees’ retirement contributions — but Kieckhefer did not say whether the governor would support the state employee pay bill passed by Democrats.

He added, “we remain dedicated to taking care of state workers,” and highlighted the governor’s proposed raises for state employees, the largest in about 40 years.

Lombardo policy bills on the table

Kieckhefer said there were “numerous” bills spread between both houses addressing the governor’s goals, and that “I think we’re getting close.” 

That includes potential movement on proposals in AB400 to reinstate so-called “retention” provisions in the state’s Read by Grade 3 program that would hold back elementary students unable to read by grade level, as well as fund expanded early childhood literacy programs. 

Still, on at least two of Lombardo’s biggest campaign promises, his office remains at an impasse with Democrats. 

The first, also part of AB400, would substantially increase the size and scope of Opportunity Scholarships, tax credit-funded nonacademic scholarships distributed to low- and middle-income families as a means to subsidize the cost of private school tuition, including that of religious private schools. 

Lombardo’s proposal sought to boost those tax credits by tying them to a percentage of the state Education Fund, essentially quadrupling the amount of funding from current levels (roughly $13 million) to roughly $50 million for the first two years of the budget. The bill also proposes increasing that percentage over time up to a maximum of 5 percent, or roughly $500 million, in Opportunity Scholarship funding. 

“We think that's a smart way to do it,” Kieckhefer said. “We think that one half of 1 percent is an incredibly modest proposal.”

However, Democrats have publicly balked at the Opportunity Scholarship increase and, as recently as a press conference last week, saying that their compromise position was leaving funding flat, rather than zeroing out money altogether. Kieckhefer said he believed the two sides could still “come together” on bumping that funding.

“It's a reasonable ask and getting the program back up to the $25 million a year range is not far from where it was at one point,” he said. “So restoring funding to a program level that is consistent with historical precedent is entirely within reason.”
Democrats have also repeatedly called Lombardo’s election proposals — including implementation of voter ID and a rollback of expanded mail voting “dead-on-arrival.” Asked if there was any risk the governor would veto Democrat-backed election bills, including bills sponsored by Democratic Secretary of State Cisco Aguilar, Kieckhefer said only: “Potential.”

Veto decision-making

Kieckhefer said the governor is evaluating veto decisions through a “common sense lens” and using the metric of whether the policy will help the people of the state, would help businesses thrive and create jobs that would reduce tax burdens.

“The filters are based around economic opportunity for people in this state, first and foremost,” he said.

On Tuesday, the governor vetoed a statewide mental health consortium bill that passed out of the Senate and Assembly with unanimous approval. Kiekchefer said the governor vetoed the bill because it would have had a fiscal effect on the state.

“If there's a fiscal impact to the state, they get a bill passed and they go home,” Kieckhefer said. “We have to somehow make sure it works.”

Having served three terms in the Legislature as a senator, Kieckhefer said he knows there is pressure to take fiscal notes off of bills so that they can get passed. 

“We want to make sure that if there’s a law in place, we’re actually able to execute that law,” he said.

Kieckhefer also said he viewed the governor’s office as the final vetting threshold for bills coming out of the Legislature and the office has been “trying to let the legislators legislate as much as possible.”

“Having been in their shoes, I can understand frustration,” Kieckhefer said. “If [lawmakers] believe that they're not getting direction out of the governor's office, we don't necessarily see that as our job. We try to be responsive when asked, but our job is to evaluate bills when they come to us.”