Gov. Joe Lombardo vetoed a major piece of the state budget late Thursday night, throwing last-minute negotiations with legislative Democrats into chaos just four days before time runs out in the 120-day legislative session. 

Just before midnight, Lombardo vetoed AB520, also known as the Appropriations Act, a sweeping government funding bill that includes more than $7 billion in appropriations from the general fund, up more than $1 billion from the previous budget period. The bill, which passed on party-line votes in the Assembly and Senate, needed to be signed or vetoed by Lombardo by midnight on Thursday (the deadline for the governor to take action on a bill) after legislators fast-tracked the budget bill last week.

In his veto message, Lombardo called the budget language “undisciplined,” frequently criticizing the use of one-time money to fund ongoing programs and “the potential for Nevada to face a fiscal cliff.”

“In the short time remaining in the 2023 session, I encourage the Legislature to revisit the elements of AB520 and forward a revised budget that better balances our wants for today with our needs of tomorrow,” Lombardo wrote. 

The veto came hours after Lombardo signed another major budget bill — AB522, also called the state worker pay bill — and just a day after Lombardo and Democrats reached another 11th hour deal to sign two other budget bills alongside a pair of major school discipline bills. 

In a press release responding to the veto, Democratic leadership vowed to reintroduce and pass the bill before the end of session. They called Lombardo’s veto “reckless” and said it is a “flip flop” on his administration’s stance that “the single most important thing” is passing a balanced budget, even “if zero policy bills pass, from either party.”

Assembly Speaker Steve Yeager (D-Las Vegas) said the budget bill Lombardo vetoed helped Nevadans who are “too often left out and left behind.” He said the budget made significant investments in programs communities rely upon, such as early childhood education and resources for victims of crime.

“When this legislative session began, it was my hope and expectation that policy would come before politics and Nevadans would come before partisanship,” Yeager said. “With tonight’s veto, the governor made it clear that would not be the case.”

Despite Lombardo’s threats to veto the state budget if his legislative priorities were not addressed, he signed three of the five major bills used to fund the state government through Thursday afternoon.

Thursday’s veto came amid an impasse between Democratic leadership and Lombardo’s administration over policy priorities. Now that Lombardo has followed through on his threat, lawmakers are left with little time before the end of the legislative session on June 5 to attempt to override the vetoes or introduce a new bill to implement the Appropriations Act.

Any attempt to override a veto would require a two-thirds supermajority vote in both houses. That means at least one Republican senator would have to support the decision alongside Democrats, who hold 13 of 21 seats in the Senate, one short of the needed supermajority. Assembly Democrats hold a supermajority 28 of 42 seats.

Failure to pass the budget bills would move the Legislature one step closer to a special session, given the need to wrap budget negotiations before the start of the fiscal year on July 1.

Lombardo’s veto message also highlighted “critical budget policy issues” outside the scope of AB520, with the governor pointing to his proposal to increase the cap on the state’s Rainy Day Fund — an account used to support state government in emergencies — to boost state savings to a new record high.

A fifth and final budget bill, AB521, has remained stuck in the Senate since last week. That bill (the Capital Improvement Program) is the only major budget bill to require a two-thirds majority to pass because it renews a statewide property tax. Collectively, the five budget bills fund the state government from July 2023 to June 2025.

‘Lines in the sand’

The veto arrives after Lombardo Chief of Staff Ben Kieckhefer told reporters late Wednesday night that his office would not draw “lines in the sand” on what would stave off a potential veto. 

However, he also signaled that Lombardo would continue to seek at least $25 million annually in Opportunity Scholarship funding — roughly restoring the program’s original 2017-era funding, but also roughly quadrupling current funding levels nearer to $6 million annually.

Opportunity Scholarships — the center of Lombardo’s school choice agenda — are a limited number of tax-credit-funded, non-academic scholarships that subsidize private school tuition, including private religious school tuition, for certain low- and middle-income families.

The future of that proposal remains unclear, with neither side apparently ready to budge. Lombardo and Democrats appeared to reach an impasse on school choice funding by mid-Thursday, with advisers close to Senate Democratic leadership indicating that legislative Democrats would not move to increase funding for Opportunity Scholarships.

At the same time, Kieckhefer said the governor was also focused on advancing policy priorities including repealing key parts of Democrat-backed criminal justice reform measures and government modernization efforts.

It may no longer include, however, major election reforms. Kieckhefer said Wednesday that lawmakers were “frankly, just not going to pass” his election bill, which includes the creation of a voter ID law. 

“So while we would love to see it, it might be one that has to go directly to the voters since we know that it is both constitutional and popular amongst the people in the state,” he said.

Rare veto territory

There are few instances in state history of a governor vetoing one of the major government funding bills.

Most recently, Republican Gov. Brian Sandoval in 2011 vetoed the K-12 education funding bill passed by a Democrat-controlled Legislature, writing in his veto message that the bill increased spending beyond what state revenues could support. 

In response, lawmakers did not override the veto but introduced a separate funding bill with changes in a compromise with Sandoval that he later signed into law.

Just two years earlier, lawmakers voted to override the only other budget vetoes in recent history, after Republican Gov. Jim Gibbons vetoed all five budget bills.

This story was updated at 8:40 a.m. on 6/2/23 to add comment from Speaker Steve Yeager.

This story was updated at 12:18 a.m. on 6/2/23 to include Gov. Joe Lombardo's veto message.