We're discussing Governor Sisolak's recent State of the State address and the statewide budget, both released this week.

That's coming up on Nevada Week.

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(Kipp Ortenburger) Governor Sisolak this week gave the State of the State address to a vacant legislative chamber where, minus a pandemic, would have been chock-full of state leadership and honored guests.

Well, regardless of this more nontraditional environment, this address traditionally provides an opportunity for the governor to look back on the past two years and provide an overarching status update with respect to current economic, social and political indicators, but more importantly it provides a look to the future.

It sets the stage for what we as Nevadans can expect our state government to take on over the next two years as key budget and legislative priorities.

Finally, many times the address also set specific social and political tones, addressing issues affecting Nevadans such as COVID-19, social injustice and political divisions.

So with all that said, what can we take away from Governor Sisolak's State of the State address this week?

Well, a roundtable of local journalists who have been covering the governor's State of the State address and related stories joins us to shed some light.

Please welcome Colton Lochhead, journalist for the Las Vegas Review-Journal; April Corbin-Girnus, journalist for the Nevada Current, and Riley Snyder, journalist for the Nevada Independent.

Well, April, Riley and Colton, thank you so much for joining us again.

Welcome back to the show.

It's a pleasure to have you all.

I mentioned in the intro a non-traditional look to the State of the State address.

That doesn't necessarily mean that we didn't have traditional content and context that was presented by Governor Sisolak in the State of the State, so I want to start there and just maybe get some of the general themes and tones that you kind of pulled away from the State of the State address.

April, let's start with you.

What are some of the big takeaways you have?

(April Corbin-Girnus) I think, I mean, obviously there's a big focus on workforce, on the workforce, on workforce development.

Sisolak proposed several job training programs and emphasized using community colleges to help the workforce.

He sort of previewed a few proposals that we don't have a lot of details on yet but should hopefully be getting over the next legislative session, and I think that was a big theme.

It makes sense given the record unemployment rates that we've seen and the lingering unemployment rate as people are still out of work.

So I think that was one of the main themes.

And one of the big takeaways, I'd say, is there were a lot of people wondering whether or not the governor would mention any possible new taxes.

New revenue has been a push for a lot of advocates especially on the left, and Sisolak, during his first State of the State speech, said no new taxes and was pretty clear that he didn't want to do that.

This time he was mum on the issue, he didn't mention it either way, and I think that spoke a lot to advocates who hope to be pushing for that in this upcoming legislative session.

-Yes, we might have to mention too the numerous taxes that were on the table.

Of course we've got some education taxes that could be up for vote, sales tax and top-tier gaming tax of course, and then three potential constitutional amendments to mining that were voted on in the previous special session as well.

Colton, let's get your take on it too.

Economic development, economic diversification, I think we all kind of expected those to be talked about, but maybe within that, was there anything that kind of jumped out to you or surprised you on anything specific about the agenda?

(Colton Lochhead) I think one thing that really jumped out was his push for wanting to do tax incentives-- or not wanting any tax incentives while still trying to attract especially big-tech companies.

Obviously when Nevada was attracting some of the bigger tech companies like Tesla, tax abatements were a big part of that, a big part of that attraction.

So I think this kind of-- it's a definite change in how the state is looking at economic diversity and attracting businesses.

I'm kind of curious as to what that looks like.

One of the things that we didn't really get was a whole lot of details on a lot of these plans.

So really for me, that's really one of the things that I took away was there was just a lot of-- like April mentioned, there's a lot of talks of jobs, about increasing the number of jobs, really a lot of emphasis on infrastructure, construction, like short and long-term jobs, but not a lot of details as to how the state's going to get there exactly.

-Riley, let's bring you into the conversation too.

We're talking about tax increases not mentioned in the address, and we're talking about tax abatements is something that was not at least addressed or identified as a way that we might bring new business in.

As Colton mentioned, it's traditionally something that we've seen, bringing new business in.

You've really examined the budget and taken a real deep dive in what the proposed budget looks like.

Can you give us any more insight there of how maybe that specific piece of this, bringing new business in, would be accomplished?

(Riley Snyder) Sure.

So the Nevada budget is interesting because, you know, there's a lot of discussion about policy and economics and growing the base.

But I think what people don't realize is when you measure the budget, health and human services and education takes up about 94% of what the state is spending money on.

So you only have about 6% that's going to other sources or other programs.

Colton was talking a little bit about tax incentives and initiatives.

The governor called for something called innovation zones, but we don't have a lot of details on that.

That's somethin that will be hashed out through the legislative session.

You mentioned Blockchains LLC, which is a company in Northern Nevada that bought 67,000 acres at the Tahoe-Reno Industrial Center near the Tesla Gigafactory and has had these plans to build a "smart city."

They were mentioned by name in the governor's State of the State address, so I'm curious to see what the connection is there.

Again, in these state of the state addresses, it's sort of the most positive vision of the governor's agenda.

A lot of the details and like finer points that will be hashed out, that'll come later when the bill language or when the legislative session actually comes in and gavels in and starts going through those proposals.

-And then let's also mention, you know, here in Southern Nevada of course, we've got North Las Vegas and a lot of development, a lot of infrastructure that's been built that could potentially be used for new industry.

I want to bring attention to something else the governor talked about since we're talking about this kind of economic diversification side, this new energy economy, and it may be a little bit hyperbolic, but you mentioned the Silicon Valley of energy transmission and storage, that we could potentially be a central hub for something like that.

To the public it might be something that's new that we haven't really talked about yet.

Colton, can you give us more background on exactly what this idea is and maybe what some of the background has been that kind of leads us to maybe being in a good position to be this hub.

-Right.

So it's something that has been talked about for a long time in the state.

We have kind of an abundant amount of natural resources, natural renewable energies, things like wind and solar energy.

We've heard about it for years from a lot of the kind of green renewable energy advocates.

People like Senator Chris Brooks have talked about this have been-- and he was mentioned by name by the governor as well-- as this really being a state that is positioned almost better than any to really be kind of the hub for renewable energies.

So kind of similar to the innovation zones, we don't really know what that looks like at this point, but the pitch is this is something that can help Nevada transition.

It's part of his pathway towards a greener economy and more renewable energies in general.

But it's something that is going to lead to more jobs and kind of the idea of being that as you get more kind of a new industry, it's part of the diversifying the economy aspect.

So that's at least kind of how I've taken it, and I'm still, like everything else, kind of waiting to see some details.

We've heard and we've seen several of these projects.

I know there's been some of the powerline projects from NV Energy that are kind of going throughout the state.

We've had some of these massive solar farms, and I'm not sure exactly what else this is going to kind of incorporate or include.

-Yes, and you mentioned Senate Finance Committee Chairperson Senator Chris Brooks.

He has said numerous times of bills, any bills that are going to go through in the 81st legislative session must create jobs, create revenue, and not cost the general fund anything.

He said, quote, "If they come with a price tag, "they're not going anywhere."

I would assume of course any type of economic diversification and clean energy eventually would lead to revenue here, but we've seen that's been extremely slow, Riley, in general.

You know, any of these provisions that you see, are we going to see economic impact within two to five years, do you think, or is this more of a long-term plan?

-Yes, I'm really curious where this energy plan goes.

As viewers might know, over the summer NV Energy announced a proposal that went before the state's Public Utilities Commission to expand transmission between Northern and Southern Nevada.

So I'm not sure if people know this, but right now there's only one power line that goes between Northern and Southern Nevada.

They call it the "One Nevada Line" in a bit of marketing genius.

But this proposal would essentially create a triangle between Southern Nevada, Eastern Nevada and Reno, so you would have access to these large solar fields and the ability to build these large projects.

The problem is this takes a lot of time to get these in the ground.

They don't really create like a ton of jobs once they're established.

You have the initial burst of construction jobs, but these are on the two-to-five-year planning trajectory.

What the governor said that was interesting, he mentioned lithium mining.

That's more jobs that could be involved in this, energy storage is another aspect of it, but that transmission aspect, how it interacts with NV Energy's current plan and how that might play out, that's going to be really interesting to watch and see.

Back in 2013 NV Energy and former U.S.

Senator Harry Reid sort of struck a deal in the legislature that led to the closure of many coal-fired power plants in sort of a very like juiced-up process that worked out pretty well for the utility.

Nevada right now is on the way for more clean energy.

Voters remember just on the 2020 ballot, we added a 50% RPS to the state constitution that's in law.

So the amount of clean energy is going to go up, but this whole discussion is now about sort of the ancillary parts of the clean energy economy.

So not just like large solar fields, but you've got storage, you've got battery production and lithium mining, and you've got transmission as well.

So there's a lot of moving parts here in the energyscape that also affect the economy that are going to be really interesting to see how this all plays out.

-Absolutely, and of course all of that outlined in the clean energy-- or the clean strategy for the state that was released in December also.

April, I want to come to you and just talk again more about some of the big takeaways here and the fact that this is Governor Sisolak's second legislative session coming up.

We might assume there might be more of an aggressive and progressive agenda that was brought forth in something like the State of the State, especially because we do still have Democratic majorities in our Assembly and Senate.

But did you see indications of that in the State of the State address?

-I didn't.

I mean, he was silent on a lot of issues that people deem progressive and would have maybe hoped for.

Obviously he talked about the importance of healthcare and education but that's, you know, a wide-ranging subject that everybody has-- that crosses bipartisanship.

He didn't mention criminal justice reform, which was a big push in the last legislative session and will no doubt be another big push in the coming legislation.

Given the events of last summer and, you know, very high-profile deaths of black Americans being shot by police, you would have expected maybe for him to acknowledge that.

That was a conversation people in the community want to have, very badly want to have, and he didn't mention that.

Obviously there's a lot of things that he needed to cover in a, you know, shorter-than-normal speech.

I think it was about 30 minutes, if that.

So it maybe is not an indication that it won't be a policy priority for him going forward, but it was something that was definitely noticed, I think, within communities of color and within advocates who've been pushing for progressive causes.

-Yes.

Colton, I want to get your perspective on this too, not only the racial injustice conversation, which I believe was just mentioned towards the end, there wasn't any specific agenda items or legislative plan that was outlined there.

But let's also talk about trust in elections.

That was another big issue, and then of course the political divide.

Both April and Colton, when we had you on the show after the elections talking about that, we talked about this independent swing back to conservative votes and really how split we are.

None of those were necessarily addressed in any detail.

Why do you think they weren't in the State of the State?

-It's a great question because going into the session, one of the things that is going to be one of the hottest topics for both sides, for both parties, is going to be, you know, really looking at the election reforms or the election changes that were passed during the special session and looking at-- for Democrats, trying to figure out what, if any, or what all, will be applied going forward.

You know, parts of mail-in ballots, how prevalent mail-in ballots will be in Nevada going forward, things like that.

I spoke with Speaker Frierson just yesterday, and that's going to be a big part of the legislative agenda for Democrats going into the session is addressing election reform, and they want to expand access to voting.

Maybe not necessarily in a full mail ballot system like some other states have where it's an all mostly-mail ballot election similar to what we had in the special sessions, but it is going to be something that's a heavy-- it's going to be a strong presence in the session.

Republicans are obviously very concerned about any kind of mail-in voting and election security, but it is something that just was not even mentioned by the governor.

It wasn't really something that was addressed, and yet this is something that is going to be one of kind of the hottest topics over the next several months if not longer.

-And Riley, that was something that was mentioned in the Republican rebuttal to the State of the State address given by Robin Titus, the assemblyperson.

Can you give us maybe some big takeaways of the Republican rebuttal?

Of course what Colton is talking about specifically, about election reform, or anything else that really stood out to you.

-Yes.

So the response to the State of the State is always hard, right, because it's hard to respond to a speech you haven't seen yet, but I think what Republicans really want to focus on this session is the continuing state of emergency that the state is in.

They filed several bills, and that was talked about during Dr. Titus' response to the State of the State.

They want some limitations on that, and then election reform is going to be a big one.

I think it's going to be an interesting needle to thread for Republicans where they don't want to outright say the election was stolen, there was fraudulent votes cast which, you know, Republican Secretary of State Barbara Cegavske has said that didn't happen.

There's no real evidence and was rejected in court over and over.

But many of their voters have issues with how much elections were extended and how many changes did happen in this last election cycle, and to be clear, there were a lot.

Beyond just the special session bill, this is the first election cycle that we had-- extend the registration to vote.

That didn't happen in the past election cycle.

So that was another complicating factor, and I think all these changes that were made in the 2019 legislative session with the idea of expanding voting access, that helped contribute to the delay in recording results.

People remember that Nevada wasn't called for Joe Biden until the Friday after the election so it took several days.

Hopefully, the state is able to sort of massage out any kinks and make it easier going forward, but I think they specifically I think have pointed towards like Florida which was able to call the state for President Trump pretty early on as a goal to work towards.

So that's going to be one of the big political bargaining chips, I'm sure we'll talk about this later, but the whole redistricting thing plays a role as well.

Republicans don't have a majority, obviously they're in the minority but they're no longer in the super minority, so they have a little bit more leverage than they did in past sessions to try to get done what they want to get done.

-April, in addition to everything we've been talking about, I want to talk about one of the key things of a state of the state address is the governor highlighting some of the successes that our state has had over the last two years.

What really stood out to you there and some of the things that he highlighted and maybe things that are aligned with some of the stories that you've been covering yourself?

-One of the things that Sisolak and the Democrats were very proud of was a lot of investments they put in the 2019 legislative session in terms of Medicaid and health and human services and education.

They approved a major shift in the funding formula for K-12.

They increased Medicaid reimbursement rates, which is something that hadn't happened I think since the Great Recession, and they were very proud of that.

Then the special session happened over the summer and the budget was decimated, and they had to roll back a lot of that.

They took a lot of the funding away from that, and one of the things that Sisolak highlighted in his address this week was the ability to put some of that back.

The Medicaid reimbursement rates were increased again back to their form.

There's going to be movement on the pupil-centered funding formula.

So I think that's one of the things that they can say they're proud of and that the original projections from the Economic Forum and other people who watch these things, that we're at a rosier outlook than we were.

So originally at the beginning of the year he said-- he originally said there would be 12% cuts and sort of prepare for that, and that's been rolled back so it's less of a, you know, draconian-- which is a success and something that hopefully he'll definitely be highlighting and running on as he goes forward.

-Yes, the 2% cut, it looks like now, and Riley, we'll get more specifically to that budget and that rosy picture in just a second.

April, I want to talk a little more about the education funding side of this thing.

The education funding formula of course has been revised.

We have a committee that has been doing that work over the last two years.

It seems like, and this was mentioned in Governor Sisolak's State of the State address, that now the release of this, the launch of this is going to be kind of in a phased approach.

It looks like they're pumping the brakes a little bit on the release of this.

Is that because of where we are economically, or are there other reasons that you know of, of why we're kind of slowing this process down a little bit?

-It could be.

I don't know anything definitive.

I mean, I think a lot of that funding formula reboot is controversial.

It's a given that especially since it's not coming with new revenue streams towards education, there's a lot of people who feel like it will hurt their constituents, rural counties in particular, and a lot of controversy on that.

So I think taking a phased approach is probably-- there could also be just some political implications of it.

It's a little bit easier to swallow for people, and it'll be a little easier to push forward.

But of course for the people who want this funding formula and who think it's long overdue, the fear now becomes if it's a phased approach and the longer it takes us to get to implementing this funding formula, the more likely it is that it may never happen.

There may be a change in leadership somewhere or changing priorities in the state and they'll move away from that, which would essentially take us back to square one which is a funding formula that everybody basically hates and nobody really truly understands.

So that's what education people are watching.

The specifics about how exactly all of that worked out, or will work out, haven't really been released yet and most education groups have put out statements kind of saying things like we're going to watch and not fully saying whether or not they're supportive or against that proposal that he's doing.

But it's something that definitely will play out in the next 120 days.

-Yes.

There seems to be so many unknowns in a lot of what we're talking about.

Riley, unfortunately I think maybe the budget is in that position too.

It was described when it was released as being a fluid budget.

But I think looking at where the budget stands now, the surprise might have been that it is a rosy picture, that maybe, you know, it's not as-- it's definitely not a worst-case scenario type of budget at all and there might be some indicators there that we are planning for a rather quick economic recovery.

Give us some context, please.

-Sure.

So the thing about Nevada's budget is it's kind of like trying to throw a dart and hitting a moving target, right?

Like it's very difficult to set a budget for two years, you know, on a certain date and try to guess what tax revenues are going to happen, not knowing yet there's going to be a global pandemic back when the legislators approved the initial budget 2019.

So why is this current budget picture rosy?

That's because the Economic Forum, which under state law is required to make a projection of how much tax revenue the state's going to take in, they met in early December when we just had initial news of the vaccine that was going to come out.

So that panel, which is five private-sector economists, they're not elected by the state, they looked at all the information they had at the time and they said things look really good.

Right now we're feeling good about this vaccine and about Nevada's tourism-based economy coming back, so these are our guesses on how tax-- sales tax, business tax, payroll tax, all those are going to start to come back.

So the Economic Forum is going to meet again on May 1, or in early May, to provide a final update.

So there could be like a lot of changes between now and then, right?

Like the vaccine rollout could continue very well and cases could continue to go down and people start coming back to Vegas or, you know, it's an unmitigated disaster and there's more deaths and cases and everything else is going horribly, no one's going to want to come to Las Vegas so tax revenues go back down.

The other complicating factor here is federal aid.

So in late December, President Trump signed the federal stimulus package, but the provisions giving dollars to education and other programs in the state, those haven't been worked out yet because it was such a truncated period.

So there's dollars going to higher education and K-12 from the federal government, but the state can't put that in the budget yet because of federal rules and how to allocate that haven't been set yet.

Then we have President Biden and a Democratically controlled Congress saying they want to pass state and local aid, but when does that happen?

Does it happen in March, does it happen in April, does it happened in May?

Remember, Nevada only has a 120-day legislative session so the longer Congress takes, the more complicated Nevada's budget system takes, right?

You don't want to approve a budget for K-12, build everything kind of based on that, you know, maybe CCSD says we don't have enough money to keep these teachers employed, and then you have like $100 million dollars or $200 million coming from the federal government.

So it's a moving target.

It's very difficult to get right, and I think that's why they stress the fluidity of the situation because there are going to be a lot of changes between now and the end of session.

-The end of session, and let's even go farther than that.

It sounds like there could be the potential for maybe another special session based on what you're saying if we saw some dramatic shifts one way or the other in where our revenue is coming from.

Is that a potential?

Is that potentially on the table from what you're hearing?

-Yes.

As a reporter I don't want to think about that because I want to be done in June, but there's a chance for a special session if there are continual budget issues.

There's also a chance for a special session based on redistricting.

The U.S. Census Bureau, they're meeting on January 27 to sort of decide or get more information to states on when they'll be able to release census data from the 2020 census which the legislature has to use, and I think they're required by law to set new districts in place before the 2022 election.

But if there's a delay in that-- there was a delay caused by the COVID pandemic, we're not sure when that information is going to come out-- they might have to meet in a special session after the session to try to get all that out.

So it's going to be another huge sort of political, you know, bargaining chip on the table is whether or not that happens during the normal session or during a special session because that only takes a majority vote, and Republicans again are in the minority and I'm sure they don't want to be, you know, drawn out of existence for the next decade.

So a lot of chips to fall, I guess is the way to look at it right now.

-A lot of chips to fall, absolutely.

Well, thank you so much.

We really appreciate your time.

I wish we had more time to talk about this.

Riley, Colton and April, thank you so much.

We appreciate it.

(all) Thank you.

-Well, thank you for joining us this week on Nevada Week.

For any of the resources discussed on the show, please visit our website at vegaspbs.org/nevada-week.

You can also always find us on social media at @nevadaweek.

Thanks again for tuning in.

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