The Nevada Legislature is now in session.

It's the second legislative session under Republican Governor Joe Lombardo, who, last month at the State of the State Address, proposed a budget that ended up having a $335 million deficit.

So where does that budget stand now?

For that, we turn to Tabitha Mueller, Capitol Bureau Chief for The Nevada Independent.

Tabitha, thank you for joining us from Carson City inside the Legislative Building.

(Tabitha Mueller) Thanks for having me.

I'm excited to be here today.

-So Tabitha, this sounds like a simple question, but as you and I have discussed ahead of this interview, the answer is not simple.

The question, though, is the budget now balanced?

-So the deficit has been eliminated after the Governor's Office made changes to how some programs were funded and incorporated certain items that were left out of the original revenue projections.

So, yes, I can say that the deficit was addressed.

-So then, do Democrats believe that the deficit has now been erased?

Are they buying that?

-I think that the deficit has been addressed is something that most parties can agree on.

The way it was addressed is now where the contention lies.

So a lot of when the Governor's staff went through the amendments yesterday, a lot of Democrats had questions about some of the changes that they made.

And some of those changes surrounded proposals that the Governor made during his State of the State Address that theoretically could be ongoing, right, continuations into future years.

But what they said is, You know what?

We don't know if we have the revenue for this in the future, so we're going to make these one-time funding allocations.

For example, one of the proposals was pre-K programs, right, and extending those.

And they said, We know that we have money in the pot now.

We don't know if we have money in the future, and so we're going to fund these with one-time allocations.

That means that in two years, lawmakers are going to come back and have to discuss that and say, Do we continue to fund these programs; do we have the money for them?

And I think that Democrats were really hesitant to say we're going to fund this if we can't continue them in the future.

-And I think, when we spoke ahead of this, how you made it make sense to me is that there are different pots for ongoing funding and for one-time funding, is that correct, and that's why this one-time funding makes such a difference in the budget?

Because, to me, it sounds like it's the same amount of money.

It's the same dollar figure.

Aren't you just putting a new title on it?

-So we know that there's money that comes back to the state from unspent funds, right?

We allocated it, it might not have been used, so it comes back.

We have a vacancy rate, so maybe we allocated some money for a teacher salary or for salaries that aren't being used.

So when that money comes back into the state, the State has the ability to use it for these one-time allocations, and that is the key point here, I think.

-Okay.

Thank you for helping me understand that.

So then, how big of a deal is this, in the first place, that the Governor submitted a budget that the State could not pay for?

-That is-- it was very unprecedented.

I think that the point is, the Governor proposes the budget, the legislature then has to go through the budget amendments, make changes, and address them.

We have 120 days to get those addressed.

I think in the short term, it's a really big deal, right?

Lawmakers are going to have to have late nights.

They're going to have to work through the changes.

They're going to have to have committee hearings, have conversations about it.

In the long term, though, hopefully, we'll be able to iron everything out by the end of the 120-day session.

-You did note that they were able to identify some savings.

What were those savings?

-So I think some of the savings that folks talked about is kind of some savings within the Medicaid realm, right, within healthcare services.

The State is moving to a statewide managed care organization instead of a fee-for-service model.

And that's a little bit complicated, but we can say that that is going to cost the State less money over time, and it's going to then reflect some increased revenue sources that wasn't originally noted in that first budget, right?

It was like they accounted for it, but it wasn't actually in the budget, and so I think that was something lawmakers were talking about yesterday.

-Now, will these changes impact the legislation that seems to be, or seems to have, at least at this point, bipartisan support?

And I'm saying bipartisan support because we saw both Republicans and Democrats applaud these proposals when the Governor made them at the State of the State Address, one of them being permanent teacher raises.

So as you mentioned last session, these raises happened with one-time funding.

State of the State this year, the Governor says, Let's make those permanent.

Will they now be permanent under these changes?

-So, yes, the way that these amendments are written is that it doesn't cut or eliminate programs, is what the Governor's staff said.

The ongoing teacher pay raises are included in this budget as written.

Now, maybe that changes as time goes on.

Maybe, you know, Democratic lawmakers say, Hey, maybe this, we can't afford this, or we need to think of other programs.

But for now, that is in the budget as proposed, and lawmakers will be addressing that in the coming weeks.

-What about raises for charter school teachers, which is also something that the Governor proposed?

-So that is included in his proposed budget.

Now, whether or not Democrats will include that is another matter altogether.

We don't have much insight yet into what Democrats plans are for that type of proposal, but I know that they didn't fund it in 2023, so that could be a point of contention in the future.

-Right.

And so the charter school teachers falls under the school choice umbrella, which Governor Lombardo is a proponent of, but was unable to get a whole lot accomplished last session.

Any indication that Democrats will budge on this topic?

-So we saw that in the amendments there, about $6 million over the next two years for opportunity scholarships.

And in those scholarships are state scholarships for students from low- and middle-income households to attend private or religious schools.

Now, last night what we heard from the Governor's Chief of Staff, Ryan Cherry, is that the first year of funding in the budget amendments is about, which is about $2 million, is for coverage of existing students within the program, students that already have those scholarships.

And Democrats have kind of indicated that they're fine with students continuing if they have those scholarships, because they don't want to, you know, hinder their education or put a stop in that for some reason.

But the most interesting point is in the second part, which is the second year of the state budget, and that is $4 million in funding for increased scholarships.

Now, Chief of Staff Ryan Cherry said that that will-- they're also planning to have increased transparency and requirements, but Democrats did push back on that, and I think there will be an ongoing discussion about whether they'll fund that initiative.

-And I wonder what his chief of staff is saying when asked, How did this happen in the first place, that you had such a big budget deficit?

-So last night, lawmakers did kind of push the chief of staff into talking about that.

And what he basically said is that there-- he was-- this is his first time as chief of staff.

You have new staff members.

It was a new budget process to do this, and he took responsibility for the errors and said, you know, This is my fault, and we need to address this moving forward, but we are fixing it.

He said the amendments were a fix, they're working on it, and he said he took full responsibility for the errors because it happened on his watch.

-Another area of seeming bipartisan support was in the proposed splitting of the Department of Health and Human Services into two separate entities.

The new entity would be called the Nevada Health Authority.

Why do Democrats and Republicans appear to be on board with this splitting, at least right now?

-So the Department of Health and Human Services is the second largest state entity, state agency, that we see.

And I think that by splitting it, what the goal is, is to say we can streamline services.

We can say-- we can enact cost savings by getting everyone kind of on the same page and organizing, you know, public employees' benefit system, health insurance negotiations, putting them all kind of under one roof.

-And you bring up federal law.

Underneath that Nevada Health Authority, there is a proposed Office of Mental Health.

How did that come to be?

That involves the federal government, correct?

-That Office of Mental Health, from my understanding, is helping to address some issues that the State has had staying in compliance with the Americans with Disabilities Act.

There was a DOJ, Department of Justice, investigation that found that we didn't have support, enough supports or community-based services for kids to actually be living and staying here in state.

They were being shipped out of state to out-of-state facilities away from their homes and communities and away from their families and support.

And what they said is, We have to fix this.

You need to do it.

And what the State has done and said, We're working on it.

We have a plan.

They've reached a plan agreement and a settlement with the Department of Justice, and they're going to be implementing that in the future.

I think it's going to take probably at least five years, is what we're looking at, to fully kind of come into compliance.

And I think that Office of Mental Health, we still don't have a lot of details on it, but it's going to kind of be the place for organizing, making sure that behavioral health needs are kind of being met and sort of fulfilled there.

-And that is a topic that you covered so thoroughly recently, a four-part series called "We've Got to Talk," discussing mental health access in rural Nevada.

I encourage everyone to go and read that.

Thank you so much for your time, Tabitha Mueller of The Nevada Independent.

And you can read Tabitha's reporting at thenevadaindependent.com.

That's also where you can find coverage of the Nevada Democracy Project.

That is a joint project between Vegas PBS and The Nevada Independent.

We are holding community listening sessions.