In today’s edition: 

• Workers asked to pay more toward the Public Employees’ Retirement System.
• Everything you need to know about the legislative building construction
• State still owed $292,000 from defunct immunization nonprofit

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From the Capital Bureau Chief:

• Tonight is the night! For the third time since taking office, Gov. Joe Lombardo will sit down with The Nevada Independent CEO Jon Ralston for a 90-minute IndyTalks chat. During Lombardo’s last conversation with Ralston, the governor defended his record-setting 75 vetoes from the 2023 session and pledged to make allocating $43 million in leftover COVID-19 relief funding to mental health a “first priority.” With potential cuts to Medicaid and other federal programs looming, there’s a lot to talk about.
• ICYMI — During last week's joint finance hearing, Lombardo’s Chief of Staff, Ryan Cherry, cited a lack of staff experience and took full responsibility for the budget errors.
  • “Because this is my first time in building a budget, I did not have the option or the knowledge to look into some of this stuff.”
• One contentious part of the budget is the more than $520 million for one-shot appropriations, and questions about the sustainability of expenditures funded for just one cycle. (It’s worth noting, however, that the total one-shot funding accounts for only about 4 percent of the state budget.)
  • The proposed budget’s original $335 million budget deficit stemmed in large part from the governor’s proposal to permanently fund teacher salary increases, without increasing revenues.
  • People familiar with the budget process — who spoke on the condition of anonymity — said cementing the salary increases will give teachers stability and was the right decision. But it forced officials to relegate other ongoing expenses into one-time payments.
  • The problem is that the funding for the one-time expenses is not guaranteed from year to year. Lawmakers will have to decide whether to renew the one-shot programs in the future. 
  • One-shot allocations take place during nearly every state budgeting process but the size of the one-shots in this proposed budget (excluding one-shot allocations from the American Rescue Plan Act) is unprecedented. In 2023, at the height of when the state had COVID-19 funding, one shots accounted for more than $1 billion in the proposed budget. 
  • Since the 2017 session, outside of COVID-era funding, the second-highest amount of proposed one-shot appropriations in a governor's budget came in the 2021 legislative session with more than $226 million.
  • As state salaries increase and COVID-19 dollars are no longer available, the one-shot allocations built into the proposed budget could be financially unsustainable. 
  • To support rising future costs, the state’s revenue may have to dramatically increase. On the campaign trail, Lombardo vowed no new taxes. But so did former Gov. Brian Sandoval, and the Republican passed a major tax package in his second term.
• On top of those financial stressors, Sen. Nicole Cannizzaro (D-Las Vegas) said during a meeting last week that the state has to be prepared if the Trump administration cuts Medicaid, which serves 1 in 4 Nevadans and would affect the state’s budget. She also hinted that if the cuts happen outside of a legislative session, the Legislature may need a special session “to cut significantly budgets that we have.” 

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The construction down-low

The café on the legislative building’s second floor is now open, complete with a new seating area — one of several additions to the Legislature this year. 

Here’s what you need to know, courtesy of Diane Thornton, the interim director of the Legislative Counsel Bureau:

• How we got here: The Legislature in 2023 appropriated about $90 million to improve a building that was originally constructed in the 1960s.
• The front entrance, which was renovated for security and accessibility purposes, is about 80 percent complete but is fully operational, with some interior and exterior work, including a weather barrier project, remaining.
  • A rapid pace: This project would typically take three to four years, Thornton said, but it is nearly complete after about 18 months of work.
• Renovations to the building’s exterior include removing failing insulation and replacing it with a stone facade. This work has largely been paused during the session, but some stone installation will take place across the next couple of months.
• Other updates include:
  • Americans with Disabilities Act-compliant restroom renovations
  • Flooring replacements
  • Lighting, parking garage and elevator upgrades
• It’s not just construction: The Legislature’s IT system has also received a major overhaul, which includes larger presentation monitors, improvements to meeting audio, high-resolution cameras and on-screen language translation.

— Eric Neugeboren

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What we’re reading and writing

Experts say tax revamp needed to fund schools. State leaders don’t want to touch it. by Rocio Hernandez

The head of an advisory panel said without new revenue to aggressively increase education funding, schools will remain at the status quo.

Applications for loan repayment program for Nevada health care workers close soon by KUNR’s Lucia Starbuck

The treasurer's office estimates the program will support 75 to 100 people. It was created by legislation passed two years ago.

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Employee PERS contributions set to rise

• Fire and police employees across Nevada may see a significant decrease in take-home pay starting in July, when the employee contribution to their retirement plans is expected to rise from between 4.25 percentage points and 8.75 percentage points, depending on the contribution plan.
• The Nevada Police Union, which represents more than 1,000 state police officers, told legislators the increases could pose a threat to officers' financial well-being and hinder recruitment and retention efforts. 
• Fire and police employees typically have higher retirement contributions because they are eligible to retire earlier, which means the state might have to pay retirement benefits for a longer period of time. But under this new adjustment — which is based on a projection of future costs associated with the program — contribution rates for Nevada police officers will be among the highest in the nation, according to the union. 
• The union said the impact will be most pronounced for newer police officers, who could see nearly a third of their earnings directed toward the Public Employees' Retirement System (PERS). 
• At a budget hearing Monday morning, PERS officials told legislators that the increases were in part because of people living longer, which will cost the agency more money. “The main goal for all of us is to make sure that these retirement benefits that people have earned — that we will have the money to pay for them in the long term,” Tina Leiss, the PERS executive officer, said at Monday’s hearing.
• Democrats on Monday were concerned about the increases, but said the issue could have been resolved if Gov. Joe Lombardo, a Republican, had signed AB498, a vetoed 2023 bill that would have halved state employees’ share of retirement contributions. In his veto message, Lombardo said the PERS reforms could “present permanent and potentially unsustainable” increases to the state’s share of PERS payments.
  • That veto triggered a provision in a separate bill, AB522, and state workers instead received a 7 percent pay raise. 

— Isabella Aldrete and Eric Neugeboren

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Keeping Tabs

❤️Remembering Sen. Mike McGinness — Our condolences to the family of former GOP Senate leader Sen. Mike McGinness, who died Sunday after a long illness. Sen. Robin Titus (R-Wellington) recognized McGinness, who hailed from Fallon and served in the Legislature from 1988 to 2012, on the floor of the Senate on Monday. “Sen. McGinness was not only a tireless advocate for his constituents, but actually a voice of reason, compassion and integrity in all matters. It wasn't just the work that defined who he was. It was his character. He was known for listening with patience and speaking with honesty, his ability to bring people together to bridge divides and to put the needs of Nevada first, a lesson that we will all carry with us.” 

📽️Union secures project labor agreement for Summerlin Studios Project — There’s been few updates on the film tax credits, but one big detail that dropped last week is the Southern Nevada Building Trades Unions (SNBTU) entered into a project labor agreement with Summerlin Studios, renewing a similar partnership that had expired. It signals pieces are coming into place in anticipation of an effort to expand credits — the Summerlin Studios Project is contingent on receiving expanded film tax credits.

💉Immunization nonprofit still hasn’t repaid state — Division of Public Behavioral Health Administrator Cody Phinney told state lawmakers last week the state has still not recouped $292,000 it paid to a now defunct immunization nonprofit. The money has not been paid since March of last year. “We are working with our representatives at the attorney general's office on the actions that we can take to recoup that,” Phinney said. She said the debt owed to the state has not had any negative effects but said vaccination rates “aren’t going in the direction we would prefer.”

🥊 Trial lawyers-Uber feud heats up — Nevadans for Fair Recovery, an Uber-funded PAC, launched a billboard and digital advertising campaign last week to urge legislators to stand up to “greedy lawyers” who engage in “frivolous lawsuit abuse.”

• Context: This the latest development in the ongoing dispute between Nevada trial lawyers and Uber. Nevadans for Fair Recovery was the PAC behind Uber’s initiative to place a cap on attorney fees; the Nevada Supreme Court struck down that effort. A group of trial lawyers argued Uber was trying to stymie sexual misconduct lawsuits brought against the ride-sharing company.

— Tabitha Mueller and Eric Neugeboren

Looking Ahead

• Tuesday, Feb. 11: Nevada Tribes Day
• Tuesday, Feb. 11, at 6 p.m.: IndyTalks event with Gov. Joe Lombardo at the National Automobile Museum Event Center in Reno.
• Wednesday, Feb. 12, at 5 p.m.: Reception for the Nevada office launch of Cornerstone, the lobbying firm former Assembly Speaker Jason Frierson is joining, at Carson Piazza Bar.

Days until: 

• Last day for bill introductions: 42
• First house passage deadline: 71
• Sine die: 112

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And to get you going into the week, a few social media posts that caught our eye: 

• Bsky: This would be helpful. 
• X: What a blast from the past.
• Instagram: When you and your attaché are #twinning, you have to recognize it.

We’ll see you Thursday.

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