Treasurer: Voucher program disruptive and transformational

Nevada Treasurer Dan Schwartz said Tuesday the new law allowing parents to get public money to pay private school tuition “is going to be the most disruptive and transformational program in state history.”

Schwartz told the Rotary Club luncheon at the Carson Nugget there are a number of issues with the law as passed by the 2015 Legislature that’s going to have to be addressed including whether it violates the constitutional amendment that prohibits giving public money to religious entities, how use of the money is going to be audited and the impact on school districts losing that money.

He said, his office had no input in the legislation until a week before the end of the 2015 Legislature.

“I read the bill after it was signed,” Schwartz said.

Parents who attended the first workshops on the bill primarily objected to the fact students must attend public school for 100 days before they can get the roughly $5,000 in public K-12 funding to take to a private school.

Schwartz said that was put in the bill because, without it, there would potentially be a $200 million hole in the education budget.

But the 100-day rule causes problems for the school districts as well. The school year is 181 days long and, by the time the student leaves after 100 days, the school district would have spent nearly two-thirds of that per pupil allotment. To prevent a hole in the school district budgets, the law holds them harmless for departing students — which means the state must make up the difference.

That issue is a problem only in the first year of the program since students don’t have to do the 100 days after the first school year.

“This has to reduce, at some level, the amount of money available to public schools,” Schwartz said.

The auditing process, Schwartz said, is also a bone of contention. To get around the constitutional ban on spending public money for religious purposes, he said the money wouldn’t go to the religious school but directly to the parents.

That creates a serious problem for the state since, when the money hits the parents’ bank account, the state loses control of it.

“We do lose control,” Schwartz said of the bill from Sen. Scott Hammond, R-Las Vegas. “But the parents have to pay the invoice to the private school.”

He said it’s especially problematic when parents use some of the money to pay tutors.

He has proposed auditing a 10 percent sample to see how much of a problem exists. But he said the Legislative Counsel Bureau and/or Department of Education want every account audited to make sure the money is getting to the educators and not to the parents.

Schwartz said that would force his office to hire a significant number of auditors not in his current budget.

He said those portions of the law need to be fixed to make what is an extremely popular program work. He said his office has received 2,000 applications for the Educational Savings Accounts in just the first two weeks and more are coming in every day. Schwartz has scheduled another workshop on the program for this Friday.