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Sandoval’s Nevada budget blueprint lays foundation for Sisolak

CARSON CITY ­— Nevada Gov.-elect Steve Sisolak had measured words Wednesday for an $8.8 billion state spending plan being finished by his predecessor as both incoming and outgoing administrations await the release of final revenue projections that will chart the state’s fiscal course for the next two years.

Sisolak, who takes office in January, will have final say on the budget that will go to the Legislature in February. But he will work from a fully formed blueprint prepared by the outgoing governor, a requisite duty for the current administration in its waning weeks.

In a statement Wednesday, Sisolak, the first Democrat to serve as governor in 20 years, praised his predecessor, a moderate Republican, for his stewardship and cooperation. Gov. Brian Sandoval’s administration has briefed Sisolak’s transition team on budget details and taken feedback from the incoming governor.

“Gov. Sandoval has done a good job leading our state over the last eight years, and I look forward to keeping our state moving forward,” Sisolak said. He said he will spend the coming weeks “working with my team to craft a budget that puts our priorities first.”

Based on Sandoval’s proposal, with interim financial projections, Sisolak will probably have new money to work with in the coming two-year budget cycle — about $700 million more. Sandoval’s final $8.8 billion proposal is nearly 9 percent higher than the $8.1 billion budget for the 2017-2019 biennium. The plan will get fine-tuned after official revenue projections are released at a meeting in Carson City on Monday.

The outgoing governor wants to make the transition for his successor as “smooth as possible,” said Mike Willden, Sandoval’s chief of staff.

“We want to leave them with something that is pretty well-baked,” he said. “If we waited until after the election, and we’d done nothing to build a budget, it would not be physically possible for the incoming governor to build a budget in the six weeks they have for the transition.”

Willden said he has had several meetings in the last few days with Michelle White, the executive director of Sisolak’s transition team, and has exchanged emails and data to start working Sisolak’s priorities into the mix.

Sandoval’s proposal includes a change on how marijuana tax money is allocated, and an increase in state spending on Medicaid. The governor set aside no funding for a controversial, and now moribund, state program for enhanced school choice.

Marijuana money

Revenue from a 10 percent special sales tax on marijuana that now goes into the state’s rainy day fund would be diverted to education. The tax, estimated to generate $50-$65 million annually, would fund projects recommended by Sandoval’s school safety task force, including new fences, locking doors and security cameras at schools. Other funding would go to bolster the Millennium Scholarship fund. Willden said the state treasurer’s office is projecting a $31 million deficit in that fund through 2021.

Sisolak, during the campaign, said he wanted the excise tax revenue to go to education. Asked last week about funding school safety projects and the Millennium Scholarships, he demurred pending appointment of his transition team and budget director.

Medicaid spending

The projected $700 million in new spending Sandoval is proposing is largely spoken for in his budget to offset increased expenses, among them the state’s contribution to Medicaid. Under the Affordable Care Act, the federal government’s match on Medicaid funding gradually has declined from 100 percent to a final rate of 90 percent in 2020. Willden said that means the state will be on the hook for more than $210 million in higher Medicaid costs over the next two years.

Education

Sandoval wants $20 million for the state’s opportunity scholarship fund. Launched in 2015, it allows businesses to donate tuition money for low-income students in exchange for a tax write-off. Lawmakers gave the fund $20 million in 2017, more than quadrupling the number of recipients. Sandoval has proposed to continue the higher funding.

But his budget includes no funding for Education Savings Accounts, a voucher-like program that offers another form of school choice. The program was effectively abandoned in 2017 amid a deadlocked Legislature.

Sandoval supports ESAs, but Willden said the opportunity scholarships are “effectively similar,” allowing greater choice for low- and middle-income families.

Contact Capital Bureau Chief Colton Lochhead at clochhead@reviewjournal.com or 775-461-3820. Contact Bill Dentzer at bdentzer@reviewjournal.com or 775-461-0661.

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