Lombardo’s child care tax credits are better than Democrats’ film tax credits

“Nevada’s economy is already suffering from the chaos caused by President Trump’s trade wars, which have blown a $350 million hole in our state budget,” Nevada Senate Majority Leader Nicole Cannizzaro and Assembly Speaker Steve Yeager said in a joint statement this week.

“Congressional Republicans’ new plan to cut federal SNAP funding will cost Nevada another $50 million every year, shifting that cost onto Nevada taxpayers. And while we don’t yet know the full state budget impact of the GOP’s proposed Medicaid cuts, it is clear that low-income Nevadans will lose their coverage and our uninsured rate will rise,” added the Democratic legislative leaders.

So with Washington piling so many additional costly burdens on the state, and given both the scale and duration of the chaos created by Trump’s helter-skelter economy remain unknown, the only prudent thing for Nevada Democratic legislators to do is … give $120 million of public funds to California motion picture corporations every year for 15 years? 

That was not the course of action recommended by Cannizzaro and Yeager. Well, not in their joint statement this week, anyway. 

Instead, they said that Republican Gov. Joe Lombardo should “join the 23 other governors who have already spoken out against these cuts before a bill is passed and the damage to Nevada is done.”

Fair enough. But Cannizzaro and Yeager already made Lombardo say “Medicaid” once this year. Shockingly (to no one anywhere), Trump and congressional Republicans appear not to have noticed the governor of Nevada having an opinion on something, and are storming ahead to deprive people of vital safety net programs — while leaving states to pick up the slack — Lombardo’s concerns notwithstanding.

Meanwhile, a panel of Yeager’s Democratic Assembly colleagues indicated during a hearing last week that a critical mass of Democratic legislators will be steaming ahead with the largest public subsidy to private industry in Nevada history (and that is not a low bar) by authorizing $1.8 billion worth of transferable tax credits for Hollywood film corporations.

Even the one (and only) existing analysis of the proposal’s economic impact, an analysis built at the film industry’s request and based on numbers provided by the industry, predicts roughly half the total jobs that might be created via film tax credits would be in hotels, retail, and food service.

Those are already the state’s three largest occupational sectors. With exceptions, most notably Culinary union members working under collectively bargained contracts, jobs in those sectors are often held by people in households who rely on Medicaid and other programs that Trump and his congressional lapdogs are about to slice and dice.

In other words, an enormous film tax credit bill will almost certainly generate even more Nevada workers who will need Medicaid, while at the same time deprive the state of $120 million in annual tax revenue the state will need to compensate for Trump’s Medicaid and SNAP funding cuts.

The tax credit bill’s sponsors, Democratic Assemblymembers Danielle Monroe-Moreno (who is also chair of the Nevada Democratic Party; this thing has always been a Democratic brainchild) and Sandra Jauregui, said don’t worry be happy at last week’s hearing, because:

• The film industry won’t get any public assistance until 2028, so the bill wouldn’t compound the aforementioned “$350 million hole in our state budget,” and
• “Additional guardrails,” as Jauregui dubbed them — as yet unidentified — will be in place in case the economy is still being tortured by Trump’s tantrums in 2028.

Here’s an idea for a guardrail: Put the Godzilla of Giveaways on ice. If everyone insists on continuing to consider it, get some independent economic analysis that critically takes into account the performance of film tax credits elsewhere, and present some verifiably concrete reasons to move ahead other than the fact that Howard Hughes Holdings thinks it would be cool.

Lombardo(!?) has a better idea

Weighing in at $12 million a year — one-tenth the size of the film tax credits giveaway — the governor is proposing a plan to use transferable tax credits for new and expanding child care facilities.

Here’s the difference between more child care and more film industry: If Nevada never has more of a local film industry than it already has (the economic impact of which after all is mostly more of the same), that’s not going to be a drag on the economy we have now. But chronic unaffordable and/or unavailable child care continues to be a drag on Nevada’s economy every day in countless ways, and it has been for years.

Child care allows parents to work. And that means child care is good for the parents’ employers, i.e., business.

Quality affordable child care also helps assure the well-being of the child, not only through the day-to-day care itself, but by buttressing household financial stability — the most important factor in a child’s educational performance and success, according to mountains of research.

Unlike sports fields and film studios and tax breaks for any and every company that bats its eyes at the state, promoting and assisting quality child care is genuine economic development, saving money for families, the community, and the state. Over the long-term, child care is one of the soundest investments a society can make.

Lombardo’s tax credit proposal, which is included in an otherwise unremarkable economic development bill, would provide transferable tax credits to help finance a new or expanding child care facility for up to five years. True, $12 million a year is not, well, $120 million a year, and it’s hard to say how much of a dent the program could make in the state’s child care shortage.

But even small progress on the child care front — especially on a bang-for-buck basis — would be at least ten times more beneficial to Nevada families than ladling public money to Sony Pictures and Warner Bros.

As this is written, roughly 20 days before the Legislature is scheduled to adjourn for a year and a half, the legislation including the child care tax credits isn’t even scheduled for a hearing.

Things appear to be going swimmingly for Sony and Warner Bros. though.

Cannizzaro and Yeager, like every elected Democrat in the country, need to call out Trump and congressional Republicans. Of course they do.

At the same time, Nevada’s Democratic legislative leaders, and those who advise them, also need to carefully and thoughtfully tend to what’s going on in their own back yard. There’s more than one school of thought that says state and local Democratic failure to do that is why Trump won.