Chamber Report: Education Funding in Nevada

(Geoff Lawrence/NPRI) – The Las Vegas Chamber of Commerce released an excellent report today, commissioned from Applied Analysis, on education funding in Nevada. For those interested in education policy and funding metrics, the report is certainly a worthwhile read and it further confirms much of what NPRI has said about education spending over the past several years.

One of the unique aspects of Nevada’s K-12 education system is the degree to which it is controlled by the state legislature. As the Chamber report highlights:

Nevada’s public school system has evolved from one with over 200 fiscally independent districts to today’s system of 17 county-wide districts for which fiscal matters are highly centralized at the state level.1 School operating budgets “approved” by county school boards are, in reality, largely created by the state. Local boards cannot impose or reduce any taxes for school operations, even with voter approval. The state also controls school spending, as state support per student for each district is “backed into” by replicating prior-year spending patterns and deducting so-called “local” revenue to the credit of the state general fund.3 Here, “local” refers only to the point of deposit, not to governance, as the State Legislature authorizes and directs the use of these revenues. Nevada school districts operate as de-facto state agencies, and cannot gain from revenue windfalls when they occur, except by legislative act. Given Nevada’s low rankings in nationally-administered student achievement tests, this concentration of fiscal authority at the state level is worth revisiting as part of a broader effort to improve K-12.

Despite what Senators Horsford and Raggio errantly argued in the 26th Special Session, the bulk of so-called “local” revenues are, in fact, controlled by the state legislature since the Local School Support Tax is a statewide levy whose rate is determined by lawmakers. Horsford and Raggio argued that they did not control these funds in an effort to misrepresent the size of proposed budget cuts. And they did this only 10 months after they both voted to increase the rate of the Local School Support Tax.

Some other highlights from the Chamber report focus on the fallacy of most state-to-state comparisons given the Silver State’s unique financing mechanism:

Comparison with other states and with charter and private schools requires reconciliation of different financial structures and acknowledging restrictions on use of funds. By law, Nevada’s “basic support” is not all inclusive; and, therefore, not comparable to other financial measures.

When all district funds are added, expenditures per student might be estimated as high as $12,307; but only if all monies were fungible, which they are not.

For more, I would suggest reading the report in its entirety.