“This is not your typical hearing on a bill,” said Assemblymember Daniele Monroe-Moreno during an evening Ways and Means Committee meeting in late March. Usually, lawmakers try not to hold so-called “after dark” meetings until much later in the session, when the Legislature’s 120-day constitutional deadline forces them to work into the evening. But that’s not what made this meeting unique.
As the committee chair, Monroe-Moreno asked legislative staff to create an in-depth presentation outlining steps taken by previous lawmakers to address the economic fallout associated with 2008’s Great Recession and the pandemic. And for three and a half hours, the committee’s fiscal analysts outlined the cause and effect of every cut and furlough lawmakers approved as part of the state’s recovery from those downturns.
The presentation on saving money was a departure for a committee tasked with deciding how the state’s revenues should be spent, especially considering that just two years ago, many of those same lawmakers were deciding how to appropriate a $2 billion surplus.
“I felt it was very important that we all know what the state has done in the past to keep the lights on, and then have a conversation about those things that we might have to do in the future,” Monroe-Moreno said. “None of us know what’s ahead of us, but the best way to deal with that is to prepare for it.”
How much lawmakers need to prepare is still a mystery.
That’s partly because Nevada was already struggling to improve a stagnant economy — a major talking point during the 2024 election. Since the pandemic, Nevada’s unemployment rate has stubbornly remained the country’s worst. And while the state has seen wage growth in recent years, it comes at the same time that everything has gotten more expensive. Nevadans, on average, now pay more than the national average for groceries, fuel, housing, and childcare. And a new analysis shows it’s now one of the most expensive places in the country to own a car, as well, mostly because of higher-than-average insurance costs.
It’s an economy forcing people to stay home and reevaluate their finances, and that’s a problem in a state so heavily reliant on tourism and sales taxes to generate revenue. It’s an issue we’re already seeing play out on the local level. In recent months, communities across the state began forecasting budget deficits for the coming years. Increased labor costs and stagnant tax growth will force Las Vegas to tighten its belt by roughly $25 million next year (in addition to cuts dictated by the massive Badlands settlement). Same with Reno.
There are also signs that President Trump’s trade war may further hamper growth. According to the Las Vegas Convention and Visitors Authority, Las Vegas welcomed more than 41 million visitors last year. This year, travel to Sin City has slowed. Visitor volume was down nearly 12% in April as compared to the same period last year. Convention attendance was off by 20%, and gaming revenue had dipped nearly 14% on the Strip.
Then there’s the state’s reliance on federal funding. A report released in April by Nevada’s nonpartisan Guinn Center for Policy Priorities found that federal money made up about 28% of the state budget last biennium. Much of it went to fund Medicaid, fix highways, and manage public lands. Those funds are potentially now on the chopping block due to the Trump Administration's fundamental restructuring of the federal government.
Lawmakers are considering a proposed constitutional amendment to raise revenues by reforming the state’s property tax scheme.
In Nevada, property taxes are calculated based on the age of a structure. Newly built homes are taxed at a higher rate than older structures, even if the older home is worth more. The proposed amendment, Assembly Joint Resolution 1, would instead reset property taxes, basing them on the price of the property upon resale, regardless of its age. It’s a move that would put the state’s property tax structure in line with the rest of the country. Analysis of a similar proposal from 2017 found that recalculating property taxes upon sale could have generated as much as $13 billion in additional tax revenue for the state and local governments over a 10-year period. Obviously, that proposal went nowhere, and even if this new resolution passes this session, lawmakers would have to approve it again in 2027 before placing a question about modifying property taxes on the 2028 ballot — meaning the earliest it could take effect is 2029.
In the meantime, it leaves state lawmakers with little choice but to prepare for the worst. That includes potential cuts to state employee pay and benefits through furloughs or layoffs, as well as reductions in services like Medicaid, which could leave thousands of the state’s most vulnerable residents without access to healthcare.
Of course, many argue that less government spending is a good thing that will, in and of itself, spur more economic development. Others say Nevada has become over-reliant on the federal government, especially after the pandemic, when Congress sent billions to the states to stimulate an economy still reeling from shutdowns.
Either way, the unfortunate reality is that money is like a drug. You have to feed the beast a little more each time to keep the good times rolling. It’s either that or experience pain when the drug stops flowing. No matter what, we're going to feel the pain this time around. How much and for how long remains to be seen.
