State of the State, budget are positive bridge-building steps for new Nevada governor

Tuesday, Jan. 24, 2023 | 2 a.m.

For almost 18 months, then-candidate Joe Lombardo attacked the economic policies of his predecessor, Steve Sisolak, as promoting “disastrous” and “harmful” policies that were “out of touch,” “destroyed our economy” and made Nevada “less prosperous.” When the two men debated, Lombardo tied increases in government spending under Sisolak to the recent rise in prices and inflation. And as of the writing of this editorial, Lombardo’s campaign website still declared that “Steve Sisolak devastated our economy.”

So you can imagine our surprise at hearing that now-Gov. Lombardo’s first proposed budget not only expands government spending by more than 25% — even when compared with Sisolak’s pre-pandemic 2019 budget — but that much of that investment is targeted toward continuing and even expanding Sisolak’s policies and programs.

To his credit, Lombardo finally recognized the success of Sisolak’s tenure during his State of the State address Monday, admitting that “in an unexpected twist of fate, the pandemic also created, for the first time in many years, an unprecedented budget surplus.” Note that Lombardo didn’t give Sisolak any credit for that surplus or the $2.5 billion increase in Nevada’s general fund revenue. But that doesn’t mean Lombardo isn’t going to spend all that extra money that his predecessor and the Democratic-controlled Legislature brought in.

In fact, with the exception of a couple of business tax breaks and a gas-tax holiday, Lombardo’s budget more closely resembles that of a progressive Democrat than a Trump-endorsed Republican.

As Lombardo himself said, “the executive budget reverses cuts to some programs made during the pandemic and addresses long-overdue investments in people, programs and facilities.”

His budget proposal includes $2,000 retention bonuses and a 12% cost-of-living adjustment for state employees over the next two years, which preserves institutional knowledge in an already lean and efficient state government.

He is proposing 5%-25% increases in state funding and reimbursement rates for Medicaid service providers, foster care providers, early intervention services, services for people with disabilities and certified behavioral health centers. These are admirable investments that will help ensure the most vulnerable members of our community receive the care and services they need to thrive.

Among Lombardo’s education proposals are $2 billion in new funding for K-12 students — a nearly 22% increase over current funding levels. This funding includes much needed investments in dual-language pilot programs, Teach Nevada Scholarships, expansion of Pre-K programs, deferred maintenance on educational facilities, a $2,116 increase in per-pupil funding and an almost tripling of Nevada Opportunity Scholarships.

This last item is troubling because despite being targeted at low- and middle-income families, Opportunity Scholarships can also redirect taxpayer dollars toward private schools, removing money from the public education system.

Lombardo underscored this possibility in his speech, declaring that “traditional public schools are not — and should not — be the only option.” While we agree that parents should have the option to send their child to a private religious school, that decision should not be funded by taxpayer dollars and certainly should not harm public schools in the process.

With regard to taxes, Lombardo’s proposals are targeted at helping small businesses and individuals struggling due to inflation.

While his proposed one-year holiday on the state’s gas tax is likely to garner the most headlines, the proposal’s impact is limited. According to a study by UNR, the average Clark County resident only uses about 1.5 gallons of fuel per day. By suspending the $0.23-per-gallon tax, most Clark County residents would only save about $125 during the year — a significant amount, but not life changing. Even Nevadans who drive more, such as those who commute from rural communities, are unlikely to save more than $250 annually from the gas tax.

More significant is his proposed change to the Commerce Tax Threshold, a special tax on Nevada businesses that meet certain revenue minimums. By increasing the revenue threshold from $4 million to $6 million, Lombardo effectively exempts businesses that earn between $4million and $6 million from paying the tax. It’s a well targeted proposal that will benefit small businesses exclusively.

The same cannot be said of Lombardo’s proposed 15% reduction to the Modified Business Tax Rate. While reducing this company-paid tax on payroll will benefit small businesses, it will also provide millions of dollars in tax breaks for large corporations with billions of dollars in revenue — effectively a taxpayer-funded handout to millionaires and billionaires.

Overall, despite campaigning on a platform of extremism and scare tactics, Lombardo’s State of the State address and accompanying budget were moderate both in rhetorical tone and content. He extended olive branches to Democratic lawmakers by praising the late U.S. Sen. Harry Reid and calling for investment policies that have been championed by Democrats for years.

He concluded his speech by making a commitment to govern with “transparency, candor and integrity.” Given his history of shape-shifting in pursuit of power and electoral victory, we remain cautious of his true commitment to these principles. Nonetheless, Lombardo is and will be Nevada’s governor for the next four years. To be hopeful and optimistic about the future of our state requires us to be hopeful and optimistic about the potential for our governor to pursue good public policy that benefits all Nevadans.

His State of the State address and accompanying budget lend credence to that hope and are indicators of the direction Lombardo claims he wants to move us in. Only time will tell whether he actually moves us in that direction or not. After the spectacle of a campaign fueled by ugliness and lies about his predecessor, Lombardo needs to prove himself to be a trustworthy moderate who deserves support. While we don’t agree with all of it and look forward to seeing more details, this budget is a good start.

We hope that both Lombardo and the Legislature can work together to move Nevada forward.