Nevada lawmakers begin work on Gov. Sandoval’s final budget
CARSON CITY — A panel of Nevada lawmakers on Tuesday began the monthslong process of vetting Brian Sandoval’s final budget as governor, a precursor to the beginning of the legislative session that begins Feb. 6.
The Legislative Commission’s Budget Subcommittee will meet this week and next to get a high-level overview of the $8.1 billion general fund spending plan that includes one new revenue recommended by Sandoval: a 10 percent tax on the retail sale of recreational marijuana.
The review gives the lawmakers who will be serving on the Legislature’s money committees a head start on the more than 3,000-page budget that covers the 2018-19 fiscal years. With only 120 days to complete its work, the Legislature is using the review process to help meet its mandated adjournment date of June 5.
The proposed spending plan is more than 10 percent higher than the current $7.3 billion general fund budget, due largely to increased tax revenues as projected by the Economic Forum at $7.9 billion for the coming two years.
While a small number compared to the overall budget, the proposed revenue from recreational marijuana is an important component of Sandoval’s budget. In November, voters approved Question 2, which legalized the possession of up to one ounce of marijuana by adults aged 21 or older starting Jan. 1.
The state Department of Taxation has until Jan. 1, 2018 to adopt regulations for the licensing of recreational marijuana retail sales.
In all, revenue from recreational marijuana is projected to total nearly $105 million, with most of it going to public education. Sandoval’s proposed 10 percent retail tax is projected to bring in just over $70 million of the total. The rest comes from a 15 percent wholesale tax and fees that were part of the voter-approved initiative.
A smaller amount of revenue will come from the sales of medical marijuana.
Administration officials said Tuesday that there is no clarity from the Trump Administration on whether the federal law making the use of marijuana illegal will be enforced — something that was not done during the Obama administration. Nevada is one of several states where recreational marijuana has been legalized. Many other states also have medical marijuana laws, including Nevada.
Sandoval has directed the marijuana revenue to the expansion of several public education programs, including $30 million for special education, $42 million for English Language Learners, $30 million for low-performing schools and $4.3 million for gifted and talented education.
Assemblywoman Robin Titus, R-Wellington, questioned the marijuana revenue projections and whether the target will be hit. High taxes could cause consumers to grow their own, she said.
State Budget Director Jim Wells said the administration relied on the experience in Colorado, as well as other data, to come up with the projections.
“Like any other revenue that is projected there are a lot of moving parts,” he said.
Likely to be one of the most controversial proposals in the budget is Sandoval’s call for $60 million for Education Savings Accounts, a program that has been stalled due to a Nevada Supreme Court ruling. The program, which was unanimously opposed by Democrats when it was approved in 2015, would provide about $5,100 to parents to send a child to a private school, including a religious school.
Senate Majority Leader Aaron Ford, D-Las Vegas, said there is common ground for Democrats to work with Sandoval on his budget, but there are concerns. Those include a proposal to relocate some Nevada prison inmates out-of-state to a private prison to alleviate overcrowding; cuts to mental health funding; and ensuring that marijuana taxes supplement, not replace, public education funding, Ford said.
Ford later said he misstated the size of the mental health cuts in a video interview for this story. The reductions are much lower, and administration officials said the cuts are the result of more Nevadans getting treatment through Medicaid.
Other budget highlights include:
Contact Sean Whaley at swhaley@reviewjournal.com or 775-461-3820. Follow @seanw801 on Twitter.
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