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October 17, 2017

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State of the State:

Sandoval announces new marijuana tax, seeks $60 million for school vouchers

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Gov. Brian Sandoval delivers his State of the State speech, Jan. 29, 2015.

Gov. Brian Sandoval delivered his fourth and final State of the State address Tuesday in Carson City, proposing a two-year $8.1 billion budget to fund workforce development, education, infrastructure and health care.

The proposed budget, outlined in an hourlong speech, represents a 10 percent increase from Sandoval’s $7.3 billion budget proposed in 2015. The governor also announced a 10 percent excise tax on recreational marijuana sales to help support the new budget, which includes $60 million for the state Education Savings Account program.

“We’ve heard from thousands of Nevada families about how crucial it is that we give them freedom of choice in the education of their children,” Sandoval said. “I look forward to building a bipartisan solution to get this done. It’s time to give Nevada families a choice.”

Of $115 million in investments for higher education, Sandoval said a combined $58 million will be allotted to UNLV and UNR, while $21 million will be given to career and technical education programs at the state’s four community colleges.

While only 30 percent of Nevadans ages 25 to 34 have earned some sort of post-secondary school degree, Sandoval said his education and workforce development agenda will lead Nevada toward a 60 percent tally for post-secondary degrees for that demographic by 2025.

“It’s ambitious, yes, but we’ve never shied from making bold choices,” Sandoval said.

The governor’s proposed 10 percent excise tax on recreational marijuana sales in Nevada was met with mixed reaction from the Nevada Dispensary Association, the state’s principal advocacy group comprising dispensary owners and industry employees, and state politicians.

Association President Andrew Jolley said that while he had heard rumors of the proposed tax, Sandoval’s announcement on Tuesday was not completely expected. Jolley, who noted an additional 15 percent tax already is in place for wholesale marijuana purchases on recreational marijuana, said overtaxing the new industry could result in higher prices for buyers of the legal product and the reentry of underground sellers.

“The higher the price, the stronger the illegal black market will be,” Jolley said. “We need to learn the mistakes of other states that have overtaxed marijuana and find the right balance.”

“The industry stands ready to work with Gov. Sandoval and the Legislature to do what’s best for the voter approved adult-use marijuana industry, our state and our education system,” added association secretary David Goldwater.

State Sen. Tick Segerblom, a leading Nevada politician in favor of medical and recreational marijuana, said he first heard of the new tax just hours before Sandoval’s speech on Tuesday. Segerblom said the governor’s mention of recreational marijuana use was “huge” and illustrates Sandoval’s willingness to acknowledge and incorporate marijuana as “part of the government.”

“The tax thing we can deal with it,” Segerblom said. “The reality is if you look at other states, their governors tried to push marijuana back. The fact that our governor has embraced it is a big step in the right direction.”

Sandoval also spoke about the growth of the Nevada economy during his first six years as governor. When Sandoval first took office in 2011, unemployment in the Silver State stood about 14 percent. That number fell to 5.1 percent by the end of 2016, and over 198,000 jobs have been added in that time, he said.

Sandoval credited the growth in part to higher tourism rates and growing casino revenue.

“Our diverse economy has helped us add jobs across the board,” he said, “with many industries either exceeding or nearing pre-recession levels.”

Shortly after Sandoval’s speech, Nevada Democratic Majority Leader Aaron Ford applauded the “great strides” made in the Nevada economy under the governor’s leadership. But Ford took aim at Sandoval’s support for ESAs, arguing it the private school voucher program takes state money from public schools.

“It is not fair to Nevada families to divert our limited resources toward private schools,” Ford said, adding that the Democrats will be focused on “ensuring an adequately and equitably funded public school system” in the 2017 Legislature.

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