Democrats want to use school district debt reserves to rehab old schools

By Anjeanette Damon

Tuesday, Feb. 15, 2011 | 1:16 p.m.

Assembly Democrats today rolled out a jobs bill that they acknowledged will open up a substantial hole in the budget proposed by Gov. Brian Sandoval.

Assemblywoman Debbie Smith, D-Reno, is preparing to introduce a bill she’s been crafting since last summer that would allow school districts to use some of their debt reserve funds to finance the rehabilitation of aging schools. The funding would not only help the districts address dilapidated older schools, but would help put construction workers back on a job, she said.

Sandoval has already proposed using that money to fund the districts’ operating costs, a proposal that both Washoe and Clark counties have been fighting.

Clark County School District officials have said they are relying on that money to make bond payments in the face of plummeting property values. Taking the funds would force it to restructure its debt at a substantial cost.

But Smith’s bill is targeted at helping Washoe County, which has substantially less access to capital funds than Clark County, to rehab its old schools.

Her bill would enable the districts to use those reserves if it were a financially viable option for them.

Sandoval’s proposal would force the school districts to use the money for basic school support.

So if Smith’s bill succeeds lawmakers would be on the hook to find another $425 million for education.

Democrats weren’t prepared with an alternative Tuesday.

“That’s what we’re here for and we’ve talked repeatedly about this process and we’re going through this process now and that’s what we’ll continue to do,” Smith said of the ongoing review of Sandoval’s budget.

Democrats, in general, aren’t a fan of Sandoval’s proposal

“As I said, I’ve worked on this bill for months for this voter-approved reason,” Smith said. “I do not agree with the idea of using voter approved construction dollars for operational costs.”

Sandoval, however, hasn’t backed down.

“In these difficult economic times, the reserve funds proposed to be redirected for construction under this plan should instead be spent helping school districts focus on their central mission of educating students,” he said in a written release.