Nevada Senate passes school funding overhaul

After more than an hour of discussion, the Senate voted 18-3 on Wednesday to pass the bill designed to overhaul how Nevada funds K-12 education.

All three “no” votes were from Republican senators who represent rural districts they say would be hurt because SB543 would take money from those small districts.

But the majority of Republicans joined in support of the bill along with all Democrats in the body, agreeing the 52-year-old Nevada Plan no longer fairly distributes education funding.

Joyce Woodhouse, D-Henderson, and Mo Denis, D-Las Vegas, developed the bill around the idea funding should be “pupil centered” with money following students according to their needs instead of using a formula that calculates per pupil funding by district according to local wealth.

The existing formula results in per student formula of $10,000 in one county — Elko — while Eureka County next door can spend $40,000 per student because of tax revenue from the huge gold mines on the Carlin Trend.

Denis pointed out there are more K-12 students in Nevada today than the entire population of state when the Nevada plan was developed in 1967.

The biggest change AB543 would make is to sweep all the local funding streams now controlled by individual districts into a statewide Education Fund. Those local funds account for nearly half the average $10,000 per student funding per school year but Denis pointed out the state doesn’t control how they’re spent.

Woodhouse said that creates a lack of transparency that makes it difficult to determine whether the money is actually getting to the students who most need it.

But since SB543 makes such a dramatic change, Woodhouse and Denis said it won’t actually take effect until a couple of years from now. During the coming biennium, they said the new plan will be run side by side with the existing plan to see how it works and potentially what adjustments need to be made so it benefits all students.

Sen. James Settelmeyer, R-Gardnerville, said he agrees with many parts of the bill including creating an education Rainy Day Fund to help when there’s an economic downturn. But he said tiny Storey County with just 150 students would lose about $1.5 million.

He pointed out if applied next year, the new plan would reduce funding in 14 of Nevada’s 17 county school districts with the only real beneficiaries being Clark and Washoe school districts.

He said Storey and other small districts are looking at a funding freeze that could last a decade while costs continue to rise with only minimal inflation increases.

Sen. Pete Goicoechea, R-Eureka, said Elko would take a big hit as well and it would be eight years to get back to parity with existing funding.

He said if gold prices were to drop to $900 an ounce, there’s no way Elko and Eureka could maintain their school operations.

“It’s going to be very hard on rural school districts,” he said. “They won’t have the opportunity to build in good times and struggle through the bad.”

The third “no” vote was from Ira Hansen, R-Sparks, whose district includes a large swath of Northern Nevada including Humboldt, Lander, Esmeralda, Mineral and Nye counties.

But most Republicans supported the bill, agreeing with Sen. Ben Kieckhefer, R-Reno: “In the end, this bill adequately reflects the needs of how we should be distributing education funding on a going forward basis.”

He said after recent efforts to create categorical funding outside the formula to provide for English Language Learners and other students with special needs, “this bill is the next logical step in accomplishing those goals.”

He was joined by Republicans Joe Hardy of Boulder City, Scott Hammond of Las Vegas, and Heidi Gansert of Reno,

The bill is designed to apportion money among students according to their individual needs whether that’s English Language studies, those on the edge of poverty, special education and even the gifted and talented.

Still unanswered is the potential impact the new plan would have on school district bond ratings since it would sweep all local funding that helps support those bonds into a state account.

SB543 goes to the Assembly for consideration.