Funding law adds another $238 million to shortfall
The $580 million reduction in revenue projections ordered by the Nevada Economic Forum on Friday is just the first shoe to drop on the state’s beleaguered budget.
The other shoe, the statute guaranteeing public school funding, will add well over
$200 million to that total.
Under Nevada Revised Statutes, state government must protect K-12 education from unanticipated reductions in sales tax revenues that school districts depend on to pay for teacher salaries and educational programs. Fully
2.6 cents of the sales tax collected in Nevada goes to K-12 education in the 17 county school districts.
That law was enacted to protect public schools from budget shortfalls that could force teacher layoffs and program cuts halfway through the school year.
When the forum reviewed the state’s 2-cent share of sales tax revenues, they reduced the projected total for this biennium by $183.38 million.
If the 2 cent state share is that much short of projections used to build the state budget, then the 2.6 cent share that goes to the school districts would be short by the same percentage.
That translates to a
$238.4 million K-12 funding shortfall the state will have to make up.
Adding that to the $580.36 million the governor and lawmakers must already cut from the current budget raises the total reduction they face to $818.76 million.
But the state’s woes don’t stop there. Statute also guarantees the other primary source of K-12 revenue – the property tax. With property values practically in free-fall across Nevada, falling property tax revenues could add millions more to the total the state must cut.