Neal proposes tapping tobacco tax for children’s mental health ‘savings plan’ 

Democratic State Sen. Dina Neal is asking state lawmakers to squirrel away $1.6 million a year in preparation for 2026, when federal money allocated to ease the state’s dearth of mental health treatment options for children is expected to run out. 

The request originated in the Legislative Interim Committee on Revenue, which voted unanimously last year to tap the tobacco tax to help fund programs currently paid for by the American Rescue Plan. 

Senate Bill 95 calls for taking 5% of revenue gleaned from the state’s 30 percent tax on Other Tobacco Products, which is imposed on tobacco and nicotine products other than cigarettes. Currently, the tax generates more than $23 million a year in general fund revenue.  

Neal said the state allocated $1.6 million a year in ARPA funds to the Northern Nevada Adolescent Services, and $2.4 million to Southern Nevada Child and Adolescent Services. 

“Knowing that our money was going to eventually evaporate by ‘26, the plan was to bring a bill that would allow $1.6 million to accrue up until 2026, so that any ARPA funding that was being used, there wouldn’t be a loss or gap in that funding,” Neal said during a hearing Thursday before the Senate Committee on Revenue and Economic Development, which she chairs. “I saw it as a savings plan that was going to start early. …and we wouldn’t have to then have a conversation about how to fill a hole.”  

There was no testimony in opposition to the measure. 

“I think everybody recognizes the importance of children’s mental health and making sure we get funding for that,” said State Sen. Heidi Gansert, a Republican.  

A Department of Justice investigation determined last year that Nevada is institutionalizing children out-of-state for lack of in-state options.