Nevada Governor calls for robust education investment, tax increases

By Robin Respaut

(Reuters) – Republican Governor Brian Sandoval called on Thursday for robust investment in education that would be paid for by tax increases in a state budget that will most likely contrast with the agendas of Nevada’s fiscal conservatives.

Sandoval, during his State of the State address, outlined $7.3 billion of general fund spending over two years, a 12 percent increase over the current budget. His proposal included $882 million in education, a modification to the state’s business license fee, and a permanent tax increase.

The plan offers more funding to early literacy, school technology, technical career training, and monies to open new charter schools and to support students in impoverished regions of the state.

“Today’s public education system was largely established in the 1950s,” Sandoval said. “Our students are different, and their needs are different.”

Such an investment would offer a boost to schools across Nevada, where the high school graduation rate is the second-lowest in the nation and preschool attendance is the lowest.

In December, the state warned that gambling and mining tax revenues had fallen short of projections. That, coupled with higher-than-expected school enrolment, left Nevada with an estimated $162 million shortfall.

Moody’s Investor Service called the shortfall “a credit negative step backward at a time when most states are rebuilding reserves.”

To close the gap, Sandoval said he could generate more than $430 million from a modified business license fee and by making permanent “sunset taxes” that were set to expire in June.

“It’s time we are honest with ourselves — these revenues are now a part of our comprehensive budget,” said Sandoval. “I know this approach will cause debate. You will all find that there is no perfect solution.”

In November, both houses of the legislature flipped from Democratic to Republican, offering Sandoval a better opportunity to streamline his agenda. But his call for higher taxes and spending will most likely alienate fiscal conservatives in a state that has historically prided itself on low taxes.

The proposed budget would invest in a hotel and a medical school at the University of Nevada Las Vegas, as well as transportation infrastructure, and bonds to build a veterans’ home.

Determined to make Nevada “the most digitally connected state in the nation,” Sandoval announced data center provider Switch was poised to expand in Northern Nevada and Las Vegas, bringing $2 billion of investment.

(Reporting By Robin Respaut; Editing by Paul Tait)