Proposed Budget - Fiscal Year 2024-2025
On January 23, Nevada Governor Joe Lombardo released a budget proposal for the fiscal 2024-2025 biennium. The recommended budget calls for $24.11 billion in total spending in fiscal 2024, a 6.5 percent decrease from fiscal 2023, and $24.35 billion in fiscal 2025, a 1.0 percent increase from fiscal 2024. General fund appropriations are recommended at $5.40 billion in fiscal 2024, a 13.3 percent increase from fiscal 2023, and $5.61 billion in fiscal 2025, a 3.9 percent increase from fiscal 2024. When looking at total spending by fund source, the largest categories are other (31 percent), federal (31 percent), general fund (23 percent), transfers (13 percent), and highway fund (3 percent). The budget is based on forecasted general fund revenue (after tax credits) of $5.18 billion in fiscal 2024, a 1.7 percent decline from fiscal 2023 forecasted level, and $5.38 billion in fiscal 2025, a 3.7 percent increase from fiscal 2024. The budget proposal calls for increasing the rainy day fund to an unprecedented $1.6 billion, or roughly 30 percent of unrestricted general fund revenues. The recommended budget also includes a series of tax relief measures.
Proposed Budget Highlights
In his letter to the legislature, the governor notes the state currently has a historic budget surplus. However, the governor points out that part of the state’s current fiscal prosperity is due to federal stimulus funds which are not indefinite. As a result, the budget proposal seeks to balance the need to spend with the need to save. Highlights of the governor’s recommended budget include:
Tax Relief
- Uses surplus dollars to prepay the State Motor Vehicle Fuel Tax in fiscal 2024, saving taxpayers $250 million
- Lowers the Modified Business Tax by 15 percent, or from 1.36 percent to 1.17 percent
- Increases the standard exemption of the Commerce Tax by 50 percent, from $4 million to $6 million
Rainy Day Fund
- Increases the amount that can be held in Nevada’s Rainy Day Fund from 20 percent to 30 percent of unrestricted general revenues and fully funds the account at $1.6 billion
- Establishes the Nevada Way subaccount, designed to reduce Nevada’s need for and dependence on the Rainy Day Fund
Infrastructure and Modernization
- Invests $323 million in system modernization upgrades across the state
- Allocates $1.2 billion to state capital needs, including $495 million to address immediate maintenance and facilities issues in key state administrative buildings
- Invests $400 million for broadband expansion in rural Nevada
Elementary and Secondary Education
- Increases funding for K-12 education by over $2.0 billion, or 22.6 percent
- Increases base funding per student by nearly $2,000 and fully funds equity-based weighted allocations for at-risk, English-learner and gifted and talented students
- Fully funds the Education Stabilization Account at more than $730 million
- Allocates $50 million to the State Infrastructure Bank to support low or no-interest loans to public schools in rural communities
- Makes a direct appropriation of $10 million to the Teach Nevada Scholarship program and earmarks interest earnings to the Education Stabilization Account for programs specifically designed to increase the teacher pipeline
- Expands Nevada’s Pre-K program by 600 seats, bringing total allocation to $60 million
- Creates the Office of School Choice within the Nevada Department of Education and increases funding for Student Choice Opportunity Scholarships to $50 million
Workforce Development
- Restores funding to economic development programs, workforce innovation programs, and the State’s Knowledge Fund
- Invests $1.4 million in a pre-apprenticeship pilot program, focusing on construction trade
Higher Education
- Restores $74.8 million in COVID-era cuts to higher education institutions, including $1.9 million to graduate student stipends and $4 million to increase the number of graduate teaching assistant positions
- Prefunds $75 million in the Millennium Scholarship program and provides $6 million in continued support for the Nevada Promise Scholarship
- Invests $65 million in deferred maintenance for aging college and university buildings
- Adds $9.2 million to the UNLV Medical School budget to increase the number of students it can serve and graduate
Public Safety
- Allocates $48.6 million to increase public safety employee wages by two grades
- Invests $90.4 million in deferred maintenance, renovations, and upgrades
Veterans
- Invests $99.8 million to remodel and expand the Southern Nevada State Veterans Home and $1.5 million to fund the planning for a new North Las Vegas State Veterans Home
- Allocates $1.8 million to the Adopt-a-Vet dental program to provide critical care
Healthcare and Foster Care
- Allocates an additional $1 billion through a combination of provider assessments and federal matching funds to increase quality and access in private hospitals
- Provides $17 million for an expansion of Nevada behavioral health centers
- Allocates $13.3 million to address deferred maintenance in mental health hospitals
- Calls for a 5 percent rate increase for dentists, physicians, and skilled nursing facilities
- Increases overall foster care rates by 25.6 percent