Bill updating school funding formula introduced at Nevada Legislature

With just 21 days left in the 2019 Legislature, Senate Democrats on Monday introduced legislation that would completely overhaul the 52-year-old formula that funds K-12 education in Nevada.

SB543 drew immediate criticism from not only Republican lawmakers but the union that represents the vast majority of Nevada teachers.

“To introduce this massive overhaul of the funding formula on the 99th day of session is irresponsible and speaks to the poor process,” said Nevada State Education Association President Ruben Murillo.

Senate Minority Leader James Settelmeyer, R-Gardnerville, raised the same objection adding he sees several major problems with the bill including its potential impact on bond ratings.

Senate Finance Chairman Joyce Woodhouse, D-Henderson, said Nevada’s population is seven times what it was when the Nevada Plan was enacted in 1967 and as a former classroom teacher, “I can tell you our classrooms looked a lot different then.”

“If we want to improve Nevada schools, it’s critical we move from the Nevada Plan to a modernized approach,” she said.

Senate Majority Leader Nicole Cannizzaro, D-Las Vegas, said the new plan is “transparent, classroom focused and student centered.”

She was joined by Sen. Mo Denis, D-Las Vegas, who said the top priority was ensuring the plan would be “student centered,” that the money would follow and match the needs of students including those who are English Language Learners, those living on the edge of poverty, special education and the gifted and talented.

Weighting formulas for those students would provide more than the base per-pupil amount approved by the state.

But they agreed it can’t be implemented immediately. The new formula won’t take effect until the 2021-2022 school year.

The centerpiece of the new plan is to take control of all K-12 education funding at the local level and put it in a single fund with the state money. A bit less than half the roughly $10,000 per student Nevada now spends is collected in the individual county school districts and is outside of state control. Those funds are generated primarily by property taxes and the Local School Support Tax.

“There are so many different education resources it’s often unclear where resources are coming from and where they are going,” said Denis.

He said the Nevada Plan is so complex, it’s impossible for people to understand how it works to set what each district gets per pupil or even whether the money is actually getting to the classroom.

Jeremy Aguero of Applied Analysis said combining some 80 different revenue streams into one would greatly improve the state’s ability to monitor K-12 spending. He said it would enable the state to ensure the money follows the student according to his or her needs.

But he said no district would be adversely impacted because of the hold harmless provisions in the bill.

Aguero, who helped draft the plan, said under the hold harmless section, no district would get less money than it’s getting this coming school year.

“This proposal would have a devastating impact on the rural areas of Nevada,” said NSEA’s Murillo. “”It’s nothing more than a freeze and squeeze of those areas starting in 2021.”

Asked how many districts would see a flat budget in 2020-2021, Aguero said to his best recollection, 12 of the 17.

Settelmeyer said he believes just two or three of the districts would see a funding increase in 2021 — primarily Clark and Washoe.

He said that type of hold harmless would mean despite rising costs of everything, particularly rural districts could face a flat, fixed amount of education revenue for a decade adjusted only by minimal inflation amounts.

Aguero said the bill makes every effort to exclude bond redemption money from the fund to protect district bond ratings. But Settelmeyer said taking all the education funds away from the districts and putting it in a single fund would do just that because bond ratings are built using the district’s total bank account, not just its Capital Improvement account. He said those district bank accounts would be empty because the money was taken by the state, resulting in lower bond ratings. That, he said, would shut down needed school construction projects.

Aguero conceded a number of districts have raised concerns about the impact the proposed formula would have on them.

Woodhouse and Denis both said they believe the new plan will be well understood when lawmakers hold hearings on it next week so its introduction just 21 days before the end of the session won’t be a problem.

Denis said he believes NSEA’s objections are because it doesn’t clearly understand the new plan.

“This plan simply moves money from one area of Nevada to another, creating new winners and losers,” said Murillo.

Settelmeyer agreed: “Fundamentally, we need to find more funds for Washoe County and Clark County.”