New programs offer challenges for state in ’14
January 5, 2014
Nevada faces a number of challenges in 2014 as an array of new programs such as unmanned drones, medical marijuana and driver ID cards for undocumented residents roll out.
Two of the four Department of Motor Vehicles offices in Las Vegas were inundated with applicants Thursday — the first day immigrants could apply for a driver-privilege card. Thousands showed up to apply for a card and take their driver’s test, overloading the system so badly that DMV officials stopped taking applications by early afternoon.
Officials say they expect the lines to be long for some time as a projected 60,000 people apply for the cards and take their driver’s tests.
Insurance companies will benefit from the law, given that those new drivers will be required to purchase and show proof of auto insurance.
This also is the year Nevada is supposed to set up and license a system of medical marijuana growers, producers of food products, test labs and dispensaries to provide the product to card-holders. Voters approved legalizing the use and possession of medical marijuana more than a decade ago in a ballot question that directed the state to provide them a way to get it. Until the 2013 session, neither lawmakers nor the governor’s office made any attempt to do so.
The original deadline for beginning to take applications was April 1, but Marla McDade Williams of the Health Division said she expects that will have to be pushed back substantially and that applications won’t actually be processed and licenses issued until late fall.
The law, sponsored by Sen. Tick Segerblom of Las Vegas, is modeled after laws in effect in Colorado and Arizona and contains many more restrictions and safeguards than, for example, the dispensary system in California. But those working on regulations to implement the law say there are still numerous issues to be worked out.
Just a couple of days before the year’s end, the state got news that its intensive drive to become one of just six jurisdictions designated as a test bed for unmanned aerial vehicles was successful. Gov. Brian Sandoval, along with a long list of other state officials and businessmen, say that designation will open the door to huge economic benefits, bringing high-tech industry, capital investment and jobs worth an average of more than $60,000 a year to Nevada.
Rural governments in the state are especially interested because, they argue, drone testing can be best done over Nevada’s less-populated areas.
How much of that economic boon actually materializes remains to be seen.
A lot of attention will be focused on Nevada’s handling of the Affordable Care Act health insurance mandates. Sandoval decided to create a state exchange saying that, although he doesn’t like the federal law and believes it should be repealed, he thought it would be much better for Nevada to manage its own exchange than to rely on the federal government.
While arguably working much better than its federal counterpart, Nevada Health Link had registered only about 13,000 people by the deadline to be insured Jan. 1.
Exchange officials say their goal is to sign up 118,000 Nevadans for an insurance plan.
As the state moves toward the 2015 Legislature and the governor prepares his next two-year budget, an unavoidable issue will be what happens to the tax increases used to balance the current budget.
Those tax hikes generated $1.18 billion through rate increases, fund diversions and prepayments. The largest chunks came from the increases to the Modified Business Tax rate — a net of $234.7 million — and the Local School Support Tax increase, contributing an estimated $331.3 million.
But all those increases and diversions are scheduled to end at the close of this budget cycle.
Although Nevada’s economy is recovering, there’s no way tax revenues will increase enough to cover that tab. So, unless Sandoval and lawmakers want to cut that much from the budget, they’ll have to either postpone the sunsets or enact some new tax to raise revenue.
One potential source of revenue could be the teachers’ union business tax on the 2014 ballot. If voters approve that 2 percent tax on business earnings, it will generate an estimated $800 million over the biennium. But that ballot question is strongly opposed by business and conservative groups that say it would kill the state’s economic recovery.
Finally, state workers will be watching Sandoval and lawmakers to see if they end furloughs, the remaining piece of the cuts they suffered through the recession. The rest of the cuts, including pay reductions and step increases, will have been restored by the end of this biennium.