Gov. Joe Lombardo delivering the Nevada State of the State address on Jan. 15, 2025. (Photo: Richard Bednarski for Nevada Current)
Republican Gov. Joe Lombardo is proposing splitting up the Nevada Department of Health and Human Services and moving several major divisions and programs into a new agency called the Nevada Health Authority.
His proposed Nevada Health Authority would manage Nevada Medicaid, the Silver State Health Exchange, and the Public Employees’ Benefits Program. That would allow the state to leverage its purchasing power, he said. The agency would also house a new Office of Mental Health, which would not involve any additional funding for mental health initiatives but would instead absorb existing employees.
The proposal, which Lombardo announced during his second state of the state address on Wednesday in Carson City, reflects a broader belief that the state can do more without increasing funding in key areas like health care and education. He outlined that vision for state lawmakers and the public in a speech that ran roughly 45 minutes.
“We are certainly headed in the right direction and the outlook is positive,” said Lombardo, who is amassing a large reelection campaign warchest. “For it to remain sustainable, we must sharpen our discipline and focus.”
Lombardo in his speech said he declined “millions of dollars in state agency requests for more funding.”
“Many of the proposed program enhancements were thoughtful but now is exactly the wrong time to strap more burden on the backs of hardworking Nevada families,” he said. “So, I held the line.”
That means Lombardo has not budgeted raises for state employees, though his proposed budget does include funding to make permanent the temporary raises earmarked for educators and staff at public school districts last session. Lombardo is also proposing those raises be extended to charter school educators, who were left out of the 2023 bill.
The governor provided a high-level overview of his proposed $12.7 billion executive budget. The budget will be given to the Nevada State Legislature for consideration during the upcoming session, which begins Feb. 3. The budget amount, which is set by the Economic Forum, assumes state revenue will remain relatively flat compared to actual revenue collected and spent during the current biennium.
Lombardo said he will introduce five priority bills–focused on housing, healthcare, education, criminal justice, and economic development. Those bills have not yet been filed with the Legislative Counsel Bureau, and full details are not yet publicly available. But among the proposals he teased:
-
$1 billion in new attainable housing units, supported by some direct dollars, the Nevada State Infrastructure Bank, and bonds;
-
reducing the felony theft threshold and implementing harsher penalties for repeat offenders;
-
reducing trafficking thresholds;
-
prohibiting the use of diversion courts for offenders who commit crimes against children and the elderly;
-
creating an Excellence in Education Fund that would reward the highest-performing teachers and administrators;
-
“decisive action” for consistently underperforming schools, which could include being removed from the district;
-
expanding open enrollment policies at K-12 schools;
-
doubling investment in graduate medical education;
-
and requiring all health insurance plans in Nevada to adopt standardized and digitized prior authorization plans.
Lombardo called for bipartisanship and finding common ground, addressing legislators directly: “I would ask that before some of you say no, work with me, collaborate with my agency heads, ask questions, give input, offer alternatives, and set aside partisan politics.”
Democratic legislative leaders in a press conference after the address said it was difficult to comment on Lombardo’s plans without knowing full details but that they agreed with Lombardo that housing, healthcare and education need to be top priorities for the state.
“Imitation is the best form of flattery,” said Assembly Speaker Steve Yeager, a Democrat from Las Vegas. “A lot of what you heard the governor talk about tonight were things that we proposed last session. There were bills that we passed and they got vetoed.”
Lombardo during the 2023 legislative session vetoed 75 bills, setting a single-session veto record for a governor. Numerous Republicans running for state legislature last year campaigned on protecting his veto power.
Yeager pointed out that Lombardo spoke of putting Nevadans above “out-of-state investors looking to cash in” but last session vetoed a bill to establish a corporate landlord registry. That bill, sponsored by state Sen. Dina Neal, a Democrat from North Las Vegas, had bipartisan support.
Lombardo in his state of the state address also proposed:
-
putting $1.3 billion in Rainy Day Fund;
-
streamlining and possibly axing some of the state’s more than 300 boards and commissions;
-
and expanding tax credits for target industries like childcare and healthcare.
Election reform
Lombardo in his address said it makes “zero sense” to keep counting ballots four days after an election and emphasized the need to receive and count all ballots by Election Day.
The governor said he hoped to work with Democratic Secretary of State Cisco Aguilar on a bipartisan bill, but he added he is willing to take the issue directly to voters if the Legislature doesn’t act.
That’s the path Lombardo took after Democrats wholeheartedly rejected a voter identification requirement he proposed during his inaugural state of the state two years ago. A voter ID proposal–Question 7 on the 2024 General Election ballot–was backed by Lombardo and other prominent Republicans and approved by voters. It will appear again on the ballot next year for final approval.
Senate Majority Leader Nicole Cannizzaro, a Democrat from Las Vegas, acknowledged that “everybody is frustrated” when results are not available on election night, but that the desire for results must be balanced with keeping elections as open and accessible as possible.
Cannizzaro pointed to a secretary of state report showing that less than 2% of all mail ballots received for the 2024 general election were received after Election Day.
She suggested the state prioritize making sure county election offices have the resources they need.
“I do not believe that the answer is telling some Nevadans that their vote, despite it being within the bounds of the law, can’t be counted because for some reason it didn’t make it to the clerk’s office,” Cannizzaro added.
‘Fuzzy math’
Speaker Yeager said Democrats have “some real concerns about the budget” proposed by Lombardo.
“I do not believe that the budget that was proposed was balanced,” he said. “It looks like ongoing expenditures are more than revenues. The budget that was brought to us actually has a structural deficit.”
Yeager said lawmakers will have “many questions” for the governor’s staff once budget subcommittee hearings begin next week. He pointed to one example involving Campus for Hope, a proposed 20-acre regional homeless complex backed by the gaming industry and funded through a private-public partnership. According to Yeager, the governor is proposing reverting $90 million of a $100 million matching fund setup by the state for that project, but the bill establishing that matching fund does not allow for reversion.
“As we’re digging into the budget, we’re finding a lot of that,” he added.