Tales of the Legislature: Weaponization of Fiscal Notes 

The NFA has proposed two bills – Assembly Bills 188 and 191 – to the Nevada Legislature. AB 188 proposes restoring retiree health benefits to post-2011 hires and retirees on the PEBP Medicare Exchange, while AB 191 seeks to establish collective bargaining rights for NSHE professionals, including faculty and graduate assistants. Both measures have encountered substantial cost estimates from the relevant agencies – costs that may be overinflated or designed to discourage legislative support.

What are Fiscal Notes?

When a bill is introduced at the Nevada Legislature, the Legislature’s fiscal staff requires that relevant government agencies provide a fiscal note showing the budgetary impact of the proposed legislation. Fiscal notes play an important role in the process as they provide legislators with information about potential costs. When a piece of legislation has a recognized cost, it needs to be funded to ultimately be successful. If a bill has a fiscal note, it will be referred to the budget committees, Assembly Ways & Means Committee or the Senate Finance Committee, for consideration of an appropriation to fund the legislation. 

Weaponization of Fiscal Notes

Fiscal notes can be misused in a variety of ways. For example, those seeking to kill a bill or extract concessions can attach unrealistically high dollar amounts. Agencies may use fiscal notes to request staffing increases denied in the normal budget process. Short deadlines for agencies’ fiscal notes also contribute to inflated estimates—it may be easier to calculate a worst-case scenario than to do a full analysis. Ongoing staffing shortages likely mean that some agencies struggle to carry out this analysis even if they want to.

Weaponized fiscal notes are especially problematic in sessions with a budget shortfall, when bills with fiscal notes often die in budget committees. If agencies submit exaggerated fiscal notes, there is no mechanism for an independent review and modification of fiscal notes other than a hearing in front of a budgetary committee. The bill’s sponsor and proponents then must attempt to negotiate away the fiscal notes, either by conversations with the agencies or by amending the bill to avoid the fiscal impact.

AB 188 - Restoration of State Retiree Health Benefits

State employees hired after 2011 will receive no health benefits when they retire, while earlier hires receive a contribution from the state toward Public Employees’ Benefits Program (PEBP)  premiums or Medicare costs. As explained by the NFA’s fact sheet on AB 188, restoring benefits from the Public Employees’ Benefits Program (PEBP) for state retirees would stabilize the retiree health fringe rate (currently around 2.50% of all state salaries), rather than letting it decrease in future decades as post-2011 hires begin to retire after the minimum 15 years of service. No savings from these cuts have yet been realized, and restoring these benefits would merely keep budgets in line with current costs.

PEBP attached a fiscal note of $1,024,975 in FY2027 and $2,486,075 in future biennia for AB 188. The request includes four new staff positions, a 12% increase from their currently funded 34 positions, even though PEBP projects an increased caseload of only 0.15% in FY2027 and perhaps 2.0% over 10 years. The amount of over one million dollars is unclear, since PEBP did not provide an itemization. While PEPB may need increased staffing, AB 188 does not add significantly to its caseload. Because the fiscal note does not itemize expenses, we cannot determine whether other projected costs are reasonable.

AB 191 - Collective Bargaining for NSHE Professional Employees

AB 191establishes collective bargaining in state law for Nevada System of Higher Education (NSHE) professionals, including faculty and graduate assistants. NSHE’s fiscal note on AB 191 includes $840,000 in FY2026, $1.7 million in FY2026, and $3.5 to $6.3 million in future biennia. These projections appear to be based on the assumption that all eligible employees – and some not eligible under AB 191 – would form bargaining units within the next two or three years. This is highly unlikely, since only four bargaining units have formed in the last 50 years – these four units represent 14% of all eligible employees, fewer than 1,000 of 7,200 eligible faculty.

NSHE’s fiscal note claims that the implementation of AB 191 would require 20 new staff, including seven labor attorneys. In contrast, the State’s Labor Relations Unit (LRU) for the 12 bargaining units for 19,000 Classified employees has only two attorneys and four other employees to handle collective bargaining negotiations, contract administration, and litigation. NSHE’s staffing requests are highly exaggerated.

The current faculty bargaining units at NSHE (CSN, TMCC, and WNC) are handled by existing administrators and human resources, and since NSU's new bargaining unit has already formed under NSHE’s internal regulations for collective bargaining, AB 191 does not add to any future negotiation costs for these four bargaining units. In addition, only one new bargaining unit, for graduate assistants, would be likely in the next year if AB 191 is enacted. 

NSHE’s projected high staffing needs and costs could represent: 

• An attempt to make AB 191 unaffordable and kill the bill; 
• An attempt to slow down the formation of new bargaining units even under the old rules citing budget constraints;
• An expectation that NSHE will be defending against a great number of prohibited labor practices by NSHE institutions; 
• A desire to deploy a team of labor lawyers for anti-union activities; or 
• A lack of understanding of collective bargaining. 

With its costly fiscal note, NSHE is approaching collective bargaining with an adversarial mindset. That is an unfortunate choice. Collective bargaining does not need to be adversarial, time intensive, or costly. Professional employees who seek to join together do so out of a desire to have a stronger voice in their workplace. Nevada’s higher education employers should embrace the opportunity this bill provides to strengthen relationships and improve collaboration. NSHE should only expect increased costs to defend themselves if they interfere with workers’ efforts to organize or if they refuse to recognize employee collective bargaining rights under the law. The employer can avoid the costs of defending themselves against prohibited practice charges by committing not to violate the law.

NFA’s summary of AB 191 cites studies that show that faculty unionization is actually associated with lower institutional costs and improved student outcomes.

Moving Forward

For both PEBP and NSHE, some modest additional costs and appropriations may be reasonable. NFA has been ready to discuss reasonable expectations (as we have in previous sessions) but neither agency has moved from their fiscal notes.