Assembly Speaker Steve Yeager and Senate Majority Leader Nicole Cannizzaro 5 days before Trump’s inauguration, i.e., in The Before Times. (Photo: Richard Bednarksi/Nevada Current)
Two years ago Nevada’s Legislature and governor boasted of passing “historic” funding increases for education and approved a deal to publicly subsidize a stadium for a Major League Baseball team. State lawmakers even flirted with a giant program to publicly subsidize California film corporations.
About five weeks ago, on the evening of Joe Lombardo’s state of the state address, the Republican governor vaguely outlined a few proposals while legislative Democratic leaders entertained themselves by making fun of “fuzzy math” in Lombardo’s state budget. It seemed the 2025 legislative session would be a somewhat uneventful affair characterized by Democrats and Republicans mutually mining for political mini-gotchas and assorted 2026 campaign fodder. Banal, perhaps, but at least not particularly threatening.
Five days later, Donald Trump was inaugurated.
And just like that, roughly a month into Trump 2.0, the 2025 Nevada legislative session has been plunged into a maelstrom of uncertainty, danger, and dread.
Instead of scoring political points while arguing over a couple tenths of a percentage point of the budget and playing footsie with film credits — the merely dreary trajectory the session was on prior to Trump solemnly proclaiming he had been “saved by God to make America great again” — Lombardo and state lawmakers are now facing the prospect of cuts more devastating and unprecedented even than those considered and/or undertaken during the Great Recession or the pandemic.
But this time, state budget cuts wouldn’t be driven by a collapse of the global financial system or a virus that shut down the economy and killed more than a million Americans.
The threat of a budget crisis this time is posed by Trump and Republicans in Congress paying for tax cuts for the wealthy by cutting federal funding for arguably the single most important program provided under the auspices of Nevada state government — health care for low-income Nevadans and their children, through Medicaid.
Yes, Trump of late has been saying Medicaid won’t be cut. But Trump is a notoriously untrustworthy source. And while he says one thing, he’s done another, and endorsed the U.S. House budget framework which relies on deep cuts to Medicaid to pay for his tax cuts.
Last week the KFF health research organization estimated one of the more prominent plans to cut Medicaid spending being considered by congressional Republicans would deprive 320,000 Nevadans of health care coverage, unless the state compensated for the loss of federal funding by coming up with nearly $700 million a year over the next 10 years.
This week an analysis by the state Department of Health and Human Services, prepared at the request of state Senate Democrats, estimates the cost at more than $900 million a year.
Technically, at least in terms of the amount of additional taxation the Nevada economy could bear, Nevada is better positioned than most states (at least 40 of which would be facing comparable Medicaid funding cuts) to come up with the money.
All Lombardo and two-thirds of state lawmakers would have to do is substantially raise — double, for instance — the lowest-in the nation gaming tax, lift the property tax cap, and crib from Washington state and establish a tax on wealth.
But whether the annual cost of compensating for federal Medicaid cuts is $700 million or $900 million, under current political constraints and as a practical matter, even after devastating cuts to other programs and services, Nevada wouldn’t be coming up with either number. (Though what a spectacle it would be if the thing that finally drove Nevada Republicans to raise taxes turned out to be Donald J. Trump.)
As Democratic Assembly Speaker Steve Yeager told reporters Thursday, “The money’s just not there,”
And estimates about how much money there is are more precarious than usual. Democratic state Sen. Dina Neal and other legislators, along with the state’s Economic Forum, have warned the impact of tariffs and other Trump economic policies could damage the state’s economy, and hence, state government revenue.
The Medicaid cuts would inflict damage all their own to the economy. The KFF study suggests they could reduce Nevada’s GDP by nearly a full percentage point.
If there’s one small silver lining, it’s that the notion of publicly subsidizing California film studios, which was always braindead public policy, is even more inane now.
Like the baseball field, paying film corporations to do some of their work in Nevada sounds splashy, but promises to bring merely more of the same to Nevada’s low-wage economy.
Consideration of such shiny objects was a Biden-era luxury lawmakers can no longer afford.