CARSON CITY, Nev. (AP) — Nevada Gov. Joe Lombardo said Monday he wants to cut business taxes, suspend the state gasoline tax for a year, make the single biggest investment in education in Nevada history and use the budget surplus to proposal fiscal savings.
The Republican also proposed stiffening criminal penalties, creating a new state office to expand school choice and raise state employee pay 12% over the next two years. He insisted all the initiatives can be accomplished without any new taxes.
Lombardo also announced plans to join Tesla CEO Elon Musk on Tuesday to unveil a new facility to unveil plans for a $3.5 billion-dollar manufacturing facility in northern Nevada. It's part of his determination to further diversify Nevada’s economy that is heavily reliant on casinos and tourism.
Lombardo’s lofty legislative goals took center stage in his first State of the State address in a packed assembly chamber in Carson City, setting the stage for how he’ll work with the Democratic-controlled legislature after his razor-thin victory in the western swing state.
The speech was met with a tepid response from the Democratic leadership, who said during a press conference after the speech that there were parts with which they agreed and disagreed, many proposals “left more questions than answers” due to what they called a lack of specifics.
Lombardo said “not a penny” of the unprecedented surplus will go toward recurring funding in the two-year $11.4 billion budget. Rather, he said his plan emphasizes savings and one-time programs such as the gas tax suspension and $313 million to the Rainy Day Fund, which is used in emergencies.
Lombardo proposed adding $313 million in what he announced as the “Nevada Way Fund,” another savings fund to be used for infrastructure and development projects once the traditional Rainy Day Fund reaches 25%.
“In simple economic terms, we’re buying with cash instead of credit,” Lombardo said.
Along with the creation of the Office of School Choice within the Nevada Department of Education, Lombardo announced $50 million in funds for opportunity scholarships, a program a Republican majority created in 2015. That allows vouchers to go toward tuition for low- and middle-income students who want to attend private schools, which was previously paid for by businesses who received tax credits for donations toward the program.
“Private schools, magnet schools, charter schools, micro schools, virtual schools and homeschooling are all viable alternatives that can increase the potential for student success,” he said, echoing his support for increased school choice.
It's part of Lombardo's proposed $2 billion increase in education funding over two years that would increase per-pupil spending from $10,290 this year to $12,881 by fiscal year 2025. Nearly $730 million would be placed in an “Education Stabilization Account,” an emergency budget tailored toward education, similar to a rainy day fund. Nevada has long placed near the bottom of national education rankings and funding.
To address a pervasive teacher shortage, interest from the stabilization account would go toward scholarships to public colleges or universities for residents who promise to teach in Nevada schools for at least five years.
Still, Lombardo said underfunded schools are no excuse for underperformance. “And if we don’t begin seeing results, I’ll be standing here in two years calling for systematic changes to the governance and leadership in K-12 education,” he said.
In his first three weeks in office, Lombardo already has enacted four executive orders, including one tasking the Department of Administration with addressing an approximate 24% vacancy rate among state employees. The order also directed state agencies to return to pre-pandemic operations, including normal in-person hours by July 1.
The former Clark County Sheriff was the only Republican in the nation to defeat a sitting Democratic governor in November, a significant win in a western battleground state where a predicted wave of GOP victories didn’t otherwise materialize.
A cornerstone of his campaign related to criminal justice, promising to repeal recent criminal justice reforms from Democrats that he has called “soft-on-crime.”
He expanded on his plan to repeal parts of a 2019 criminal justice reform law, acknowledging that he did not oppose the bill at the time but saying that three years later, it had “made things worse.”
Lombardo said he would introduce a bill to strengthen or expand certain criminal penalties. This includes reducing weights for possession and trafficking while increasing penalties, lowering the felony theft threshold and “strengthening drug laws” by reducing qualifying weights for possession and trafficking for certain drugs while increasing penalties, among others.
In a 90-second media availability in a legislative hallway, Lombardo acknowledged his crime reform proposals may be the hardest goal to get past the Democratic legislature.
In a rebuttal press conference, Democratic Assembly Leader Steve Yeager said while he agreed with Lombardo’s statement that incarceration should be a “last resort,” Yeager opposed Lombardo’s efforts to repeal the criminal justice law and said he was disappointed the governor would “fall back on a tough on crime narrative.”
Democratic Senate Majority Leader Nicole Cannizzaro noted the governor did not mention access to reproductive rights or affordable housing, along with raises specific to public school teachers.
“I think there are still a lot of details that we just don’t know, and so we’ll have to see with these bills,” she said.
Associated Press writer Scott Sonner contributed to this report from Reno, Nevada. Gabe Stern is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms. Follow him on Twitter: @gabestern326.