The pandemic’s devastating effect on the economy means lawmakers have less funding to divvy up. It’s left them only undesirable options: They raise taxes, make cuts or bank on a sooner-than-expected recovery yielding more tax revenue than projected.

Democrats enter the session with majorities in both legislative chambers despite losing seats in both in November.

But with only a three-seat advantage in the 21-member Senate and a 10-seat advantage in the 42-member Assembly, the Democrats lack supermajorities needed to raise taxes unilaterally under the state constitution. It requires two-thirds approval on tax proposals.

Assembly Speaker Jason Frierson said that nothing was off the table, including proposals to raise taxes to prevent cutting state spending on priorities such as health care and education.

“We are going to have to largely focus on our budget, which is going to, you know, involve some tough cuts and we’re going to make sure that the cuts reflect our values proportionally, to the extent that we can,” the Las Vegas Democrat said.

Lawmakers have also asked legislative staff to prepare bills that address other hot-button issues — including elections, criminal justice reform and the state’s problem-plagued unemployment insurance system.

The Nevada Association of Counties and Nevada League of Cities are backing bills to change Nevada’s property tax system that were pre-filed before the start of the session. Nevada currently caps the amount property tax burdens can increase annually, even as property values increase. A proposal backed by counties would change the formula for capping property taxes to limit the cap from falling below 3%.

The League of Cities’ bill would cap taxes on commercial properties at 8% and residential properties at 3%. One of the issues to be discussed is related to sales and gambling taxes.

SALES AND GAMBLING TAXES
A powerful teacher’s union successfully gathered thousands of signatures to compel the Legislature to consider two tax proposals that would raise revenue to be used to fund K-12 schools. The Clark County Education Association’s first proposal would raise the portion of Nevada’s sales tax dedicated to school funding from 2.6% to 4.1%. That would push sales taxes in Las Vegas and Clark County to nearly 9.9%.

The second proposal would increase the gambling tax rate from 6.75% to 9.75%. The proposals are likely to prompt battles with the tourism and hospitality industry, which argue higher taxes will jeopardize key sectors and dissuade tourists from visiting the state.