5.9.25 Ways and Means Comments
NSEA believes in Schools Over Studios. We oppose AB238, which would extend $1.65 billion in tax giveaways to Hollywood studios over 15 years.
NSEA has been engaged all session on the K-12 budget, asking the Legislature to reject the Governor’s proposed $2 budget. Instead, we called on the Governor and Legislature to Pass the Plan offered by the Commission on School Funding to reach optimal education funding. However, yesterday’s actions taken in the K-12 Budget Subcommittee indicate that $2 is all Nevada students will get next year, despite still having access to hundreds of millions of dollars in the Education Stabilization Account after backfilling the reduction in anticipated revenue.
The Commission on School Funding was empaneled by the Legislature in 2019 and has been working since then to identify optimal funding and propose a revenue path to reach that level in 10 years. The Commission’s Plan calls for increasing education funding by about $2.5 billion over the next 10 years by reforming property tax abatements and depreciation and expanding the base on the sales tax. The only section of the Commission’s 534-page document that contemplates tax abatements is Exhibit F, an investigation of tax credit school voucher programs. The only mention of the film industry is in a recommendation to extend the sales tax to the downloading of digital movies.
The Commission on School Funding is a serious body and has taken a professional and methodical approach to their mission. They have not recommended a film tax credit to improve the funding of our schools. That’s because Funding Commission Chair Guy Hobbs knows better than anyone that these tax credits don’t generate revenue for the state and wouldn’t help the schools. In fact, Hobbs authored the economic impact report for this bill. While any $1.6B subsidy would have significant economic impact, Hobbs found that it would have a net cost to state government of over $1.3 billion. We repeat, the State of Nevada would lose over $1.3 billion over 15 years if AB238 passes.
Sadly, there has been a fundamental contradiction in the actions of Nevada leaders when it comes to properly funding public education and other vital state services. While nearly every elected official claims to prioritize education, there’s a competing record of corporate giveaways, from Tesla to the Raiders, that cost the state over a billion dollars. Immediately after last session, the Governor convened a special session to give billionaire John Fisher $380M in public money to build a baseball stadium in Las Vegas. A majority of legislators voted to approve the proposal.
The budget impacts of tax credits are real. According to the Economic Forum’s projections, Nevada is estimated to lose $119M in general fund revenue to tax credits this year. That goes up to $148M next year, with $36M for the A’s before a shovel even hits the ground. In the out year it rises to $160M.
Those are funds that otherwise could be going to important services, including education. Imagine taking away another $110M/year!
During last session, NSEA and our allies pointed out Nevada was the only state in the country to receive 3 Fs in education funding in the 2023 “Making the Grade” report released by the Education Law Center. Even with record increases made to education funding, Nevada still trailed the national average by $4099 per pupil. In May, 1000 educators and allies rallied with umbrellas in hand outside this building, pleading for more consideration for education. Instead of doing more, SB1 was passed for the A’s.
In response, NSEA launched Schools Over Stadiums. While we haven’t yet stopped those subsidies in the streets or the courts, we have succeeded in generating a ridiculous amount of coverage, turning the tide of public opinion. In an Emerson College poll of likely Las Vegas voters in 2024, 52% opposed the use of public money for the construction of a baseball stadium. Only 32% were in support. That’s 20 points underwater. Now with Schools Over Studios, NSEA is committed to continuing our efforts to make sure Nevada’s priorities line up with the people.
We urge legislators to reject AB238 in the strongest possible way. Meanwhile, we hope that the Legislature will give full consideration to the revenue proposals put forward by the Commission on School Funding. Please, Pass the Plan.
Second Testimony From NSEA (5.9.25)
Let’s set the scene, the Nevada Film Marquee reads “Waste Side Story?” Directed by “Schools Over Studios” Rated F, like our education rankings, for fiscal recklessness and misplaced priorities while Nevada ranks 47th in per pupil funding with the largest class sizes in the nation.
Just one day after this body approved a meager $2 increase in per-pupil funding, this body is considering handing $1.65 billion in public money to Hollywood studios.
It sounds like a fantasy film, but it’s a Nevada documentary about misplaced priorities.
Or Perhaps it’s a silent film. Despite their passion, educators are being ignored. They’re pleading with lawmakers to Pass The Plan, to invest every available dollar in our schools and other essential services. But instead, they watch their lawmakers try to funnel public dollars into hollow “economic development” projects like AB238. And, if it passes, the State of Nevada will lose over $1.3 billion over 15 years.
You heard from Guy Hobbs today, who’s ALSO the chair of the Commission on School Funding. They’ve provided a roadmap to fully fund our schools. He knows better than anyone that these tax credits don’t generate enough revenue for the state and wouldn’t help our schools. In fact, the only mention of the film industry in the plan is related to extending the sales tax to downloading digital movies.
But instead of giving that plan a green light or using reserves to meet the $604M our schools need to meet their recommendations, it’s been shelved in favor of a massive, historic subsidy at the worst possible fiscal moment.
Nevada education needs the Blockbuster Budget. Hollywood doesn’t need to bankroll its blockbusters with Nevada’s budget. You do not solve systemic issues by starving our schools and feeding the rich. Every dollar to Hollywood is a dollar not invested in classrooms, student supports, or educator pay.
So here’s the moral of the story
Education is Economic Development. States with strong public schools attract families, fuel long-term investment, and draw businesses looking for a skilled workforce.
While our schools are stuck in a tragedy, with a financial cliffhanger, the Legislature is working hard to ensure Hollywood Executives get to walk off with public money and live happily ever after.
We say Schools Over Studios, because that’s the script that should be written. Public funds should serve the public good, not subsidize corporate profits. The credits have not yet rolled on the 83rd session, and this committee has the opportunity to rewrite this ending put essential services like education at the center of our budget, not on the cutting room floor.
NSEA engaged at yesterday’s meeting of the K-12 Budget Subcommittee, asking the committee to reject the Governor’s proposed $2 budget. Instead, we called on the Governor and Legislature to Pass the Plan offered by the Commission on School Funding to reach optimal education funding. After years of work, the Commission identified optimal funding and proposed a revenue path to reach that level by 2035. To increase education funding by about $2.5 billion over the next 10 years, the Commission recommends reforming property tax abatements and depreciation, while expanding the base on the sales tax.
The only section of the Commission’s 534-page document that contemplates tax abatements is Exhibit F, an investigation of tax credit school voucher programs. The only consideration of the film industry is a recommendation to extend the sales tax to the downloading of digital movies.
The Commission on School Funding is a serious body and has taken a professional and methodical approach to their mission. They have not recommended a film tax credit or any other enticement of industry to improve the funding of our schools. That’s likely because tax credits just don’t generate new net revenue. This is particularly the case for film tax credits. Study after study shows that film tax credits, whether for an existing industry or to lure studios or production to a new location, cost more than they bring in. In California, the Legislative Analyst Office found that California had made 65 cents for every dollar spent on film tax credits. An audit conducted for New York State’s Department of Taxation and Finance found their film tax incentives only produced 31 cents in direct and indirect revenue for every dollar spent. Meanwhile, Georgia has built a significant film industry with the lure of tax credits. However, the Georgia State University Fiscal Research Center found that Georgia only saw 19 cents of revenue for every dollar the state spent.
Sadly, there has been a fundamental contradiction in the actions of Nevada leaders when it comes to properly funding public education and other vital state services. While nearly every elected official claims to prioritize education, there’s a competing record of corporate giveaways, from Tesla to the Raiders, that cost the state over a billion dollars. Immediately after last session, the Governor convened a special session to give billionaire John Fisher $380M in public money to build a baseball stadium in Las Vegas. A majority of legislators voted to approve the proposal.
The effects are real. According to the Economic Forum’s December projections, Nevada is estimated to lose $119M in general fund revenue to tax credits this year. That goes up to $143M next year, assuming the A’s build their stadium. In the out year it rises to $157M. Those are funds that otherwise could be going to important services, including education. Imagine taking away another $100M/year.
During last session, NSEA and our allies pointed out Nevada was the only state in the country to receive 3 Fs in education funding in the 2023 “Making the Grade” report released by the Education Law Center.
Even with record increases made to education funding, Nevada still trailed the national average by $4099 per pupil. In May, 1000 educators and allies rallied with umbrellas in hand outside this building, pleading for more consideration for education. Instead of doing more, SB1 was passed for the A’s.
In response, NSEA launched Schools Over Stadiums. While we haven’t yet stopped those subsidies in the streets or the courts, we have succeeded in generating a ridiculous amount of coverage, turning the tide of public opinion. In an Emerson College poll of likely Las Vegas voters in 2024, 52% opposed the use of public money for the construction of a baseball stadium. Only 32% were in support. That’s 20 points underwater. Now with Schools Over Studios, NSEA is committed to continuing our efforts to make sure Nevada’s priorities line up with the people.
We urge legislators to reject AB238 in the strongest possible way. Meanwhile, we hope that the Revenue Committee will give full consideration to the revenue proposals put forward by the Commission on School Funding. Please, Pass the Plan.
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