State lawmakers learn they'll have less money to work with than they previously thought.

Plus... (Roberta Lange) Jobs in aerospace, defense, medical research, and video game publishing.

-Legislators consider two film tax credit bills.

Why one state senator says hers is more than just a film bill.

That's this week on Nevada Week.

♪♪ Support for Nevada Week is provided by Senator William H. Hernstadt.

-Welcome to Nevada Week.

I'm Amber Renee Dixon.

Why State Senator Roberta Lange thinks her film bill is better than the bill that Warner Brothers and Sony are supporting, that's ahead, but we begin with the state's budget.

State lawmakers have to pass a balanced budget based on how much revenue the state is projected to earn.

An economic forum makes those projections and is now forecasting a revenue decrease of about $191 million over the next two years.

For more on the fallout from this, we bring in Tabitha Mueller, Capital Bureau Chief Reporter of The Nevada Independent.

Tabitha, thank you for joining us.

(Tabitha Mueller) Thanks for having me on.

-All right.

Tell us about this economic forum.

Who's on it and how does it work?

-So the Economic Forum consists of a panel of economists who review sort of different proposals for what the revenue could look like, and then they pick the best projection.

And they meet a few times during the year.

The one that we really care about, though, is May, when they meet and they sort of say, okay, let's look at the updated numbers.

Do we need to shift anything?

And so that's sort of what we're talking about today, because obviously no one has a crystal ball to know exactly what's going to happen.

But we can at least look at indicators and changes and say, what do we think is going to happen, and how do we budget for that in the upcoming biennium, or the two-year state budget cycle.

-Okay.

And as you reported, this is the first time since 2009 that projected revenue has decreased midsession.

2009, that alone makes me think this is a big deal.

How big of a deal is it to lawmakers you're speaking with?

-It's definitely a big deal.

And we need to remember that 2008 was the Great Recession, right?

So that's the context that we're coming into this from.

I think lawmakers and economists have both kind of pointed to the changes that we've seen recently.

We're talking about the tariffs the Trump administration has implemented, economic changes, as well as shifts in kind of tourism that's driving this.

I think a lot of folks are saying we need to kind of batten down the hatches.

We have to make sure that our spending is going to meet the budget revenue, right?

We cannot go over budget, by law, and as part of this, too, do we need to consider alternative forms of revenue streams as well as tapping into some emergency funds that we have available to us?

-And we're not just talking about the $191 million, but you also reported on the education budget.

What's going on with that?

-Yeah.

So we have a State Education Fund, and that's made up of a lot of local government, you know, taxes and revenue.

You can think about cannabis funding.

There's also a special mining tax that kind of feeds into that fund.

And that one had a projected shortfall of about $160 million and over the next two-year budget cycle, right?

And when we're talking about that, that is a massive amount of money when you combine that with 191 million.

In total, it's about $350 million that we're talking about.

And that also is going to shape how, what legislation passes, what programs we can implement looking forward from that.

-Okay.

So this news came out, I think May 1, May 2.

Several days have passed since then, as we speak.

What are lawmakers doing now, if anything?

Has any action been taken?

-So I don't think any action explicitly has been taken in terms of, here is, you know, a list of things that we're changing, but they are reviewing the budget proposal and making sure that it can match the fiscal, the fiscal needs of the state, right?

And so we've seen just some trimming down of things.

We've seen, Do we really need to spend this money on, you know, new offices, those types of deals.

There's also been some shifts in, well, can we put things into bonding or, you know, other kind of needs as well?

And there's also some considerations on what legislation can move forward.

-And when you think about the bills that have been proposed this session that involve a lot of money, what comes to mind for you?

Because those obviously could be impacted.

-Absolutely.

I mean, there's a-- there's a large number of bills that are currently in finance committees right now because they have a fiscal note attached to them.

That could spell danger for those measures if we don't have extra money, which we know we don't.

And one of those, in particular, Governor Joe Lombardo's crime bill had a $42 million fiscal note on it.

That comes pretty pricey.

That's new spending and something that lawmakers are going to have to consider.

I think the other thing we've seen is sort of a tampering down of expectations.

Before the session even started, Senate Majority Leader Nicole Cannizzaro had proposed doing this massive universal pre-K expansion.

So making sure that all children who are in pre-K have access to it, that was estimated to cost about $500 million along with other things that she had wanted to do.

When she put forward the bill last week, we didn't see that universal pre-K. We saw that there were calls for free childhood literacy programs and some other things to the extent that money is available.

And that's been sort of the topic or phrase of the day, right?

Everything has sort of this note of "to the extent that money is available" so that if it does pass and we don't have the budget, that may not be funded.

-This has to be awfully deflating for lawmakers.

What are you hearing?

-It really is.

I think that lawmakers are really frustrated by this.

It means that some of the goals that they had coming into session may not happen.

It means they're going to have to make some tough calls.

I know that you talked with Senator Roberta Lange about the film tax credit proposal.

You know, will that generate enough revenue to justify spending the amount of money that that bill is proposing?

I think those are all the questions that they're grappling with, and there's some really big, important programs.

I mean, there's some funding for rural schools is up for discussion, revamping them, revitalizing.

There's some programming for gardens and community spaces.

Like, that's everything that's under consideration, and all of that has to be weighed.

We have some big health care bills that are expected to drop.

One from Governor Joe Lombardo, he talked about it in his State of the State Address.

And in his State of the State Address, he said he wanted to kind of bring something to help provider shortages.

We have graduate medical education proposals.

We just aren't sure what that means for those measures until we, you know, get through the budgets and start to make sure that we have the things covered that are-- that need to be covered.

-What about teacher raises?

They were supposed to be permanent last session.

Am I right?

Am I remembering all this timeline correctly?

Now they're not permanent.

Are they going to be factored in this year?

-So we kind of asked Assembly Speaker Steve Yeager about this, and he sort of said that there's still a month to go and that they can maybe get creative in the way that they move money around.

And so I think that that's the key phrases, obviously we don't know if it's not a possibility, not a-- not something that's going to move forward.

I could see that being a tricky thing politically if they don't fund those teacher raises again.

That's not going to be popular on either side of the aisle.

So my guess is they really try to make sure that teachers remain whole, that those raises are stable, but obviously we're still kind of moving forward with the budget process.

-And Assemblyman Yeager also told you that a special session might be in the future.

Why is that?

-So Assembly Speaker Steve Yeager has sort of indicated that a special session might be in the works, and that could be because of what's happening at the federal level.

These budget deficit-- or these budget shortfalls that we're seeing are really for our state revenue budget.

But our state budget relies on about a third of federal funding.

When we talk about that third of federal funding, if there are cuts at the federal level, that means we are going to have to make cuts at the state level, especially if it's to programs like Medicaid, which makes up a majority of that spending.

And so the federal budget is expected to kind of come out in the fall, and that's when Speaker Yeager said that he would kind of maybe expect to see a special session.

Now, that's just, again, a guess.

If I had a crystal ball, I' be able to tell you exactly what would happen, and I would be probably a millionaire, because I would get all those scratch off lottery tickets.

But I think that looking at it now, that's what it appears to be.

-Okay.

Speaking of the lottery, that was a bill that was proposed.

What happened with that?

-So the lottery bill died unceremoniously, I think in the earlier on in the legislative session.

That will not be moving forward, and that has been an issue that's been proposed over-- you know, this isn't the first time this has come up.

I think there's always concerns about, how do we create this?

How do we establish it?

And with that measure, in particular, I think that there was consternation around the fact that proponents didn't really advocate for it.

They didn't come in.

It passed in 2021-- or 2023, excuse me, and it would have needed to come back in 2025 because it was seeking to modify the Constitution.

-Another bill that had a lot of talk surrounding it, we had Sheriff Kevin McMahill in studio earlier this year talking about red-light cameras.

What happened with that?

-That bill will not be moving forward.

It was very controversial.

We saw a lot of folks saying that we needed this.

We saw a lot of folks saying that this was something that would be, you know, oversurveilling the population, presenting other concerns, and so that is not on the table anymore.

-Okay.

-I will add the caveat that in the legislature, even if a bill dies, it can still be resurrected in a number of ways.

It can be amended into another bill.

They can have a waiver attached to it.

So when I-- the only thing that you know is truly dead is at the end of the legislative session, June 2, the last day.

But I think that that bill is probably not going to move forward.

-But even then, Tabitha, as you've reported about the nursing shortage and the idea for a licensure compact, how many sessions has that come back?

What does it involve?

You did a really nice article on this.

-Yeah.

So when we think about the Nurse Licensure Compact, just to start off, it's basically the idea that if you get a nursing license in one of the compact states, you can practice in that state without having to go through an additional licensing process.

There are 41 states that are a part of the compact.

For the last few sessions, Nevada has considered the compact, or it's been proposed, but it has not moved forward.

So what we did is take a deep dive into looking at why Nevada isn't a part of this.

And I think the framing really is unions have really opposed this bill.

They have a big presence here in the legislature.

And when we asked the Senate Democratic Caucus about why this bill didn't move forward, they sort of said that there were better ways to address the nursing shortage than through this measure.

Proponents have indicated that this won't solve the nursing shortage here in Nevada.

We need a lot more than that, right?

We need more nurses from the nursing schools.

We need more investment in that area.

But what they have said is that this is one way to potentially increase the number of nurses in Nevada or who could come to Nevada if they wanted to.

And so that's, I think, an interesting nuance.

And they said, This is a tool; it's not necessarily the solution.

-And how many states are involved in that compact?

And what would that mean?

How does that play out?

-So there are 41 states in the Nurse Licensure Compact, and essentially, if Nevada joined it, what would happen is nurses would-- it would make it so that nurses who were part of that compact come to Nevada without doing an extra additional licensing process.

So right now, when you come to Nevada, you have to fill out a license, you have to pay a fee, you have to go through the licensing process, and that could take a little bit of time.

And if you were in a compact state, you wouldn't have to fill out an extra fee.

You wouldn't have to fill out an extra application.

You just have the one application, and it works for any participating state.

-And so opponents, when asked why not just give it a try, what do they say?

-So we asked the Senate Democratic Caucus about this, and they said that there are better ways to address the nursing shortage, that this is not the total solution for it.

There's other means that we can kind of fix this, and I think that when you look at the reviews, there's sort of some mixed research on, you know, how effective is this.

And when we kind of went back to proponents and said, Look, this is what they said, it was sort of a thing of like, Look, that may be the case, but one tool to just at least increase and try something could be helpful.

-All right.

Tabitha Mueller, thank you for your time, and best of luck to you in this less than a month left in the session.

-Absolutely.

Thanks for having me on.

-Yeah.

So less than 30 days left in this session, yet two similar bills are still alive.

They both look to dramatically increase Nevada's film tax credit program from $10 million a year to more than $1 billion over the next 15 to 18 years.

One key difference between them, though, is that Assembly Bill 238 has the backing of Warner Brothers Discovery and Sony Pictures.

The other, Senate Bill 220, does not.

That's Senator Roberta Lange's bill, who says her bill provides a lot more money for education and workforce development programs.

So Senator Lange, why should Nevada lawmakers choose your bill, SB 220, over the other bill, which has the support of Warner Brothers Discovery and Sony Pictures?

(Roberta Lange) Well, there are similarities.

I mean, we both are doing a film bill.

Their film bill is very similar to the bill I did two years ago, and the bill I did this year, we are doing $186 million for education.

They are doing $24 million for education.

That's a big difference.

And so I think when you look at that and you look at what you can do, I mean, we are doing an investment, and at the end of our our lease, our 100-year lease, our building is going to revert to the Harry Reid Tech Park for eternity.

The other thing that's different about my bill is we are, we are on public land.

And being on public land, we generate taxes and stuff for the state through my bill.

-That is a key difference, that it's on public land, well, owned by UNLV, correct?

-Correct.

-Okay.

Another key difference, I believe, is that you have said it yourself, this is not just a film bill.

What else in relation to what kind of programs are going to come out of this development should it happen?

-We have expanded to do the Creative Technology Institute, which will be jobs in aerospace, defense, medical research, and video game publishing.

All of that creates a bigger economic development and will bring more resources to our state.

-Wow.

Do you mind going a little bit more into the defense aspect?

What would that look like?

-Well, thank you for that question.

That could be anything from drones to technology.

We, I would hope, could work with Nellis and Creech on some of those things and be eligible, actually, to apply for defense grants into the research.

-All right.

I know you have said that your bill is similar to what the assembly side bill is.

Is it possible that you are going to be combining these bills, or what's more likely that just one will advance?

-I would say that their bill is similar to mine, because I had mine first, and I-- look, I am 100% in favor of trying to combine the bills and making one bill that's good for our state.

You know, the legislature is a body that compromises all the time, so why not compromise and figure out how we can do one bill and strong economic development for our state?

I know that the other side has said they don't think that will work, but, last session, we all came together for my bill, and I think we can do it again.

People need to sharpen their pencils and decide what their bottom line is, and you're not going to get everything you want.

I think one of the other things about my bill that's different is that on the tax credits that we would receive, our tax credits, the developer cannot buy them back.

They have to go to somebody else.

And we do that because we don't want the developer to have the tax credits.

They are responsible for the building and the infrastructure and all that, and they shouldn't go to them.

They should be able to be bought by other people.

And generally what happens in our state is the tax credits, the casinos buy the tax credits to lessen their-- they can buy them less than what their-- less than what they cost and be able to use that to offset their taxes.

-Got it.

Okay.

And prior to this session, your bill did have the support of Warner Brothers.

For our viewers who are wondering what happened there, what would you say?

-I would tell you that they had a different vision.

I stay in contact with them on a regular basis.

I just think their vision was a little bit different, and we didn't fit in with kind of what they wanted to-- how they wanted to proceed.

And so we've left, we've parted ways.

But that doesn't-- in the film industry, everybody works together.

So, for instance, I could give an example.

So MBS Studios is our studio partner.

They do productions from Marvel, Sony, Warner Brothers, Lucas Films, Paramount.

I mean, they're the largest global content manager in the nation-- in the world.

And so Warner Brothers and Sony use them.

So there is an opportunity that they could use our studios, too, along with where they are.

So I just think that, you know, it was a difference in vision, and I respect that.

And there-- I know that there will be opportunity in the future to work together.

-Could you point to what that difference in vision was?

-I don't know, to be honest with you.

You know, I didn't delve into that.

Just had conversation about, you know, I wish you wouldn't have left.

I really enjoyed working with you.

I think they bring a lot to the community, and but I believe that Manhattan Beach Studios, known as MBS, will be a great addition to our community and the workforce development, the education, and everything that we're trying to accomplish.

-MBS Group being the lead occupant of the studios that would be constructed.

-Yes.

-Have you had any talks with the assembly members who are the sponsors of the other bill about combining them at this point?

-I have.

I've had conversation with them.

They're just not, they're not at the point where they're willing to take that step.

I'm willing.

I'm ready.

I met with Sony, and Sony said, If you want to talk about that, just give us a call and we'll come.

We'll come to Carson City, and we'll sit down and talk with you about how we can come together on this.

So I think it's early.

I know there's only a month left in this session, but in legislative time, it's early.

And so, but I hope that those conversations will take place.

We've been told by the majority leader that only one bill will go forward.

It needs to be a combined bill, and so that has been my focus since I started this.

-Do you know why they do not want to proceed in combining the bills at this point?

-I don't know.

I don't know if it's financial.

You know, I really don't know.

They haven't, I mean, when I asked them, they just said, No, it's just not going to work.

-Not yet.

When would they have to?

When would these talks need to start happening?

Because there is just a month left.

-Yeah, in three weeks.

That's what I think.

In three weeks, that's-- look, the bill won't be heard until the end of the session anyway.

We have to close budgets.

As you know, there's a lot going on with the financial picture in our state, and so I think that it won't happen until we get a better idea of that financial picture.

And but I would say that we, we aren't asking for any money until 2028.

So in the next biennium for which this legislature is planning the budget, we don't affect the budget at all.

It will be after; it'll be in 2028.

-Okay.

Still, with the state's Economic Forum projecting a budget smaller than they had predicted earlier in the year, a decrease in state revenue over the next two fiscal years, how can you justify giving away tax credits, even if it isn't until 2028?

-What I would say to you, because I was asked this question just yesterday, and someone said, you know-- -Who asked you?

Was it a reporter or a lawmaker?

-A lawmaker.

-Okay.

-And I said, What better time to do this?

Here we are.

We had COVID.

We had a recession.

Each time, we relied on one industry in our state, which is gaming and mining, and we heavily rely on them.

Here we are again with another situation, a budget shortfall, and here we are again relying on one industry.

What better time to do some economic development?

I know the governor is interested in economic development.

What better time to do this is right now, because we have to get this in place so that we can fund education, so that we can fund healthcare, so that we can help with the budget shortfalls when we have them and have other opportunity.

-We did talk about the newest projections from the Economic Forum.

They were released last week.

What kind of impact have they had so far on the legislature?

-Well, I think everyone is trying to digest that because, you know, are we going to have a special session?

Are we going to be able to-- we have to be able to have a balanced budget, because that's what our Constitution requires.

And how do we do that?

What do we need to do that?

I know that the Finance Committee, the Joint Finance Committee, is working very hard.

People, departments have been bringing their budgets to them, asking for more people, and they've said no, and they've kept status quo.

Fortunately, we have a very large historical amount in our rainy day fund that I think, you know, it's for times like this, right?

And we also have the money in education when they redid the formula a few years back.

And so we have a rainy day fund in education that hopefully can help fill that hole as well.

But you never know what's going to happen from the federal government.

Every day they're cutting elements to-- that affect the state of Nevada.

And so I, I as a legislator, really appreciate my colleagues on Finance that are working so hard to make sure that we can meet the needs of Nevadans and have a balanced budget.

-Senator Roberta Lange, thank you so much for joining Nevada Week.

-Thank you.

-As for the competing film bill, AB 238, Nevada Week recently spoke with its sponsors as well, and you can watch that interview at vegaspbs.org/nevadaweek.

And I'll see you next week on Nevada Week.