The Nevada Legislature was supposed to move forward with the one big tax proposal of this session. Instead, the marijuana excise tax Governor Brian Sandoval (R) proposed was defeated by the Senators from his own party. As a result, the public education budget, including vouchers, is undergoing major changes.
The marijuana excise tax was the highlight of Sandoval’s State of the State address. And yet, Senate Republicans vote against Sandoval’s marijuana tax. Why did they? And what happens now?

SB 487 was the marijuana tax bill introduced by Senator Julia Ratti (D-Sparks) to create a “well vetted, clean, and efficient” tax structure. She later amended this bill to include the 10% excise tax Sandoval proposed in January, and the bill had been on track to for a big, bipartisan vote of approval yesterday. Leaders in both parties counted on this $64 million in marijuana tax revenue to place into public education.

But now, the budget has a pothole. Why?

When SB 487 first came to a vote, it failed on a 12-9 party-line vote. Even though Democrats have the majority, tax bills require a supermajority of two-thirds to pass.
Senate Majority Leader Aaron Ford (D-Spring Valley) immediately called for another vote. He asked his Republican colleagues to remember voters’ decision when they approved Question 2 to legalize recreational marijuana last November, saying, “We have set aside more than $60 million in new funds for public education.”

“This is very good public policy. Democrats know it. Republicans know it. And most importantly, our constituents know it. It is now incumbent upon us to honor the voters’ will.”
– Senate Majority Leader Aaron Ford 

Despite the pleas from Ford and other Senate Democrats, Republicans voted against SB 487 again. Senator Joe Hardy (R-Boulder City) exclaimed, “I do not think it’s always good public policy where the ends justify the means.” This was while he and his Senate Republican colleagues voted to reject the $90-100 million funding stream Sandoval was using to balance his recommended budget.
Democrats then ordered the Senate into recess. The Senate Rules Committee voted along party lines to strip the $60 million Sandoval requested for ESA vouchers from the budget and reallocate it into the main K-12 public education budget (SB 544).
Shortly after this, Senate Republicans stormed out. Legislative Police were searching the State Capitol grounds for them while Senate Democratic leaders proceeded with the day’s business.

Photo by Andrew Davey

Photo by Andrew Davey

Senate and Assembly Republican leaders then snuck inside the State Capitol Building for a closed-door meeting with Governor Sandoval.

No media were invited inside. Instead, a group of reporters waited in Sandoval’s office lobby. When Roberson emerged, the press followed him back to the Legislative Building.
Roberson gave a cryptic answer to the question on whether Sandoval will veto a budget with no vouchers: “I don’t know about that.” When asked how he’d fill the pothole created by his caucus’ pot tax rejection, Roberson demurred. He pointed out how Democrats were already redirecting hypothetical voucher funds back into public schools, but declined to comment on the fiscal chaos his caucus had just unleashed.

Photo by Andrew Davey

Despite Republicans’ vote to reject the Republican Governor’s marijuana tax, Democrats vowed to press on… And kill off his voucher program, once and for all.

“We’re going to pass the budget without ESA funding. […] We’re calling their bluff.”
– Senator Tick Segerblom (D-Las Vegas)

Segerblom has led the charge on marijuana legalization, taxation, and regulation this legislative session. Following the failure of SB 487, Segerblom noted his dismay over Republicans’ rejection of a tax that marijuana businesses want to pay. “They’re asking to pay this tax, for money to go to education. […] This state is so desperate for revenue.”
On Republicans’ voucher demands, Segerblom said, “They wanted too much. We wouldn’t go there.” As both sides neared a compromise last week, Sandoval backed out as he refused to budge on voucher funding or other policy bills the Legislature has passed.
Segerblom feared failure to pass SB 487 would “screw things up,” but refused to give into Republicans’ demands “If he wants to call a special session on ESA vouchers, then he has to call one on pot tax, too. He could veto all sorts of bills. It’s his legacy.”
Now that Republican legislators have rejected the marijuana tax that Nevada’s Republican Governor originally proposed, Democratic legislators can hand Sandoval a budget with no vouchers. While that sounds simple enough, in reality the Republican walkout has thrown Carson City into chaos. The Legislature must now rework the budget, and Sandoval must make a big decision.
Will the Governor end the chaos and sign a budget so state business can continue uninterrupted? Or will he force a special session over private school subsidies that tend to serve more affluent students? Watch this space, as these final days of session have become even more interesting.