LAS VEGAS (KLAS) — Republican Gov. Joe Lombardo’s spending plan includes a big boost for education, three new state office buildings, raises for state employees — and a cut in some taxes.

The $11.4 billion state budget unveiled Monday night also sets aside a big chunk of money for discretionary spending: a $313 million rainy day fund and $313 million for the “Nevada Way Fund.”

In his State of the State speech, Lombardo emphasized themes of family and “The Nevada Way” as he began his remarks, but quickly turned to business:

“My executive budget not only lowers the tax burden on working families and businesses, but it also reserves more than $1 dollar in savings for every new dollar in general fund spending,” Lombardo said. “It bears repeating, we will reserve more than $1 dollar in savings for every new dollar in general fund spending.”

EDUCATION

Education spending will increase by $2 billion over the next two years, including expanding per-student funding this year to $12,406 — an increase of $2,116 over current per-student funding. By the beginning of the 2025 school year, per-student funding will be $12,881.

“When all is said and done, my budget proposes spending more than $2,000 dollars per student more next year. After years of celebrating a hundred dollars here and there, this investment is truly historic,” Lombardo said.

“Along with this funding, I expect results,” he said. “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.”

Lombardo has included $50 million for Opportunity Scholarships in the budget — an element of his school choice initiatives that could face some opposition. These scholarships would funnel money to schools outside of Nevada’s public school system.

A response from Nevada Assembly Speaker Steve Yeager (D-Las Vegas) indicated opposition ahead for anything but public school funding.

Lombardo said, “My goal after we finish this legislative session is to give Nevada parents significantly more choices to make about their child’s education.”

The governor also intends to fully fund the equity weights for ELL (English Language Learning), at-risk students and students in gifted & talented programs.

Other education expenditures include $30 million to preserve and expand Pre-K programs, $30 million for Teach Nevada Scholarships and student teacher stipends, and $10.5 million for dual-language pilot programs.

For universities and colleges, Lombardo plans to restore operating budgets to pre-pandemic levels. The plan also calls for: $20 million to support more graduate students and increase stipends; $9 million to increase faculty and future student capacity at the UNLV Medical School; $6 million to continue state support for Promise Scholarships for Nevada high school graduates attending community colleges.

CAPITAL PROJECTS

The budget outlines $1.2 billion in spending, including $412 million in one-shot funding for maintenance and planning, and $535 million in bonds for construction. Many of the maintenance projects had been deferred.

Three new office buildings are planned. The budget summary released Monday night lists the Southern Nevada DMV, Southern Nevada Veterans Home renovation, planning for a new North Las Vegas Nevada Veterans Home, and funding for state forensic hospital expansions and new construction.

“My budget also saves taxpayers over $260 million dollars in interest payments on bonds, enabling us to, among other things, create more construction jobs in future years,” Lombardo said.

“In simple economic terms, we’re buying with cash instead of credit,” he said.

STATE EMPLOYEES

Cost of living raises are planned for state employees over the next two years — an 8% raise beginning in July (the beginning of fiscal year 2024), and a 4% cost of living raise the following fiscal year. During his speech, Lombardo specified that the raises and bonuses are for executive branch employees.

Lombardo’s plan also specifies annual retention bonuses of $2,000 — $500 each quarter — for all employees. He said he intends to pay those $500 bonuses starting in March.

TAX CUTS

A one-year suspension of the gas tax is part of Lombardo’s plan to lower taxes. That’s a total of $250 million.

He also intends to adjust two business taxes. The commerce tax threshold will be increased to $6 million, a 50% increase. The Modified Business Tax rate will be adjusted downward to 1.17% — a reduction of 15%.

“No sunsets. No court decisions. No gimmicks. Just plain old fashion tax cuts that allow Nevadans to keep more of what they earn,” Lombardo said.

HEALTH CARE

Another area the governor has outlined addresses funding levels for doctors and programs under the Nevada Department of Health and Human Services. The budget lists:

  • Medicaid rate increase of 5% for physicians, dentists, and nursing homes
  • Foster care rate increases of 25% for foster care
  • Expansion of Certified Behavioral Health Centers throughout Nevada
  • Rate increases for Nevada Early Intervention Services
  • Rate increases for services for individuals with disabilities

According to the document released Monday night, the two-year budget contains savings of $2.2 billion, and will have an ending fund balance of $473.8 million — 8.37%.

But how exactly he plans to make that work is a point of contention. Property tax and sales increases might be on the table if Lombardo follows recommendations from the Nevada Commission on School Funding. Getting approval for that could be difficult.

“Overall, my budget sets aside more than $2 billion in total savings to safeguard against cuts to education and critical programs in the years to come,” Lombardo said.

“Included in those savings is $315 million for the Nevada Way Fund, a new sub-account to be used for transformational economic development projects and critical infrastructure needs in areas such as emerging markets in the north and south ends of the Las Vegas Valley, as well as in other emerging markets in Nevada,” he said.

Yeager’s response for Democrats pointed out that Lombardo failed to address “skyrocketing rents or the looming eviction crisis that will force many Nevadans to move in with family members or friends, or worse yet, to the streets. Home cannot mean Nevada if you don’t have a home. The Nevada way isn’t to turn a blind eye to these problems, but get to work on solving them.”