Saturday, April 13, 1996 | 11:59 a.m.
Just two years after having one bond measure approved and one rejected by the voters, the Clark County School District finds itself with no choice but to ask for more.
With 10,000 to 11,000 new students pouring into the schools every year -- a rate that is expected to continue until at least 2001 -- officials are scrambling to provide classrooms and desks for everyone.
"It's like we have this giant bear chasing us," says Superintendent Brian Cram. "We don't have time to be philosophical. We have to get the money and build the schools as fast as we can."
That puts the district in the unenviable position of asking an increasingly reluctant public if it would like to raise its property taxes to build more schools.
And the district will be competing with at least two other bond measures this year: a $120 million package to build courts and jail cells, and Sheriff Jerry Keller's plan to seek funding for 450 more officers.
Another problem with bonds is the huge interest cost.
The $605 million bond approved by voters in 1994, for example, will likely wind up costing taxpayers more than $1 billion after all the interest is paid.
Many are beginning to think there has to be a better way.
But in Nevada there is no alternative.
The state is one of 14 that plays no part in paying for school construction, making the issue a strictly local wrestling match between districts and property owners.
The state constitution, however, gives the Legislature the responsibility of providing for "a uniform system of common schools."
Although the states can delegate the authority for raising money to build schools, state supreme courts have ruled in a number of cases that they can't delegate the responsibility.
"These education funding suits have been brought literally across the country," says Peter Enrich, a law professor at Boston's Northeastern University who helped design a sweeping education reform bill for Massachusetts in 1993.
"If (the state) allows the school district to fall down on the job, it may be failing its constitutional duty."
That's exactly what the Arizona Supreme Court ruled two years ago when it threw out the state's entire school funding plan.
Similar rulings have been handed down in Kentucky and Alabama.
The problem often stems from differences in the property tax wealth between rich and poor areas, which can create broad disparities in school facilities. The courts have ruled those disparities are unfair to students in poor districts.
According to several experts, the Arizona case is reverberating in courts, statehouses and education communities from coast to coast.
"This is really a beacon of the future for any states who do little or nothing in this area," says Deborah Verstegen, a professor of education finance and policy at the University of Virginia.
A computer analysis of figures provided by the state Department of Education for fiscal years 1991 through 1995 reveals inequities in Nevada.
Clark County, far and away the largest and fastest-growing district, ranked sixth among the state's 17 school districts in capital spending per student.
Clark's $958.64 spending per student was less than $40 above the state average even though its growth was more than three times greater than the second-ranked district, Washoe County.
The figures also show that Clark is three times richer than No. 2 Washoe when it comes to assessed value of real estate. But when that wealth is divided by the number of students in a district, it was below the statewide average, No. 11 out of 17.
Assessed value per student is considered the most accurate indicator of a school district's wealth.
Clark County has 59 percent of its state-allowed bonding capacity remaining, so it has room for more bond sales. But more critically, it has only 11.2 percent of its taxing capacity left.
Wealth leader Eureka has gold mines to thank for its lack of debt and massive per-student assessed value numbers. The north-central Nevada county, with only 308 students, will net a cool $565 million this year from taxes on proceeds from the mines.
At the other end of the spectrum, counties such as Elko and Lincoln have only 2 percent of Eureka's riches in assessed value per student and about 60 percent of the statewide average.
Counties such as Mineral and Lincoln have spent only 3.8 percent and 8.8 percent of the state average per student on capital projects during the last five years.
Put it all together, experts and officials say, and you may have a vulnerable system.
"We're starting to recognize there could be a challenge," says Keith Rheault, deputy state superintendent of schools.
The possibility of a legal challenge could be triggered by voters this fall. At least half a dozen school bond issues will be on the ballots, and if they all fail, he says, the stage will be set.
"When parents can't get students into appropriate facilities to learn," Rheault says, they may resort to the courts.
Verstegen and other experts caution that constitutional cases are complicated and must be interpreted in the state's historical context. But Nevada's liability, they say, cannot be easily dismissed.
"Uniform means equal ability to raise funds, in my opinion," says Verstegen, referring to Nevada's constitutional mandate. "Clearly, when it's dependent on local ability, it's not uniform."
Eyes on Legislature
While it may take a panel of judges to determine whether Nevada's system is constitutional, there is a growing consensus among the state's lawmakers and educators that school building is a major problem.
Rheault says his office is sure someone will sponsor a bill addressing the issue in the 1997 session of the Legislature. If they can't find a sponsor, he says, "we'd go ahead and write our own."
Exactly what that bill would say, however, is still a mystery in Carson City.
State Sen. Ann O'Connell, R-Las Vegas, says there's little doubt the state needs to help out the districts with building schools. But, she says, a lot of the problem "can be laid right at the door of the school districts."
The districts "haven't been as upfront with the public as they could have been," said O'Connell, chairwoman of the Senate Government Affairs Committee and member of the Taxation Committee.
She chides some school systems for refusing to use standardized designs, getting too fancy with some architecture and overspending budgets.
"But," O'Connell adds, "that doesn't change the problem, and the kids shouldn't have to pay for it."
Carole Vilardo, president of the Nevada Taxpayers Association, reports a "great deal of frustration" among the public.
Many taxpayers are disillusioned with the product of their education tax dollars, she says, while others think the available money should be used more efficiently.
Still, she says, there's no question the schools will need more money and she's looking into the thorny issue of how to get it.
No matter how you mix the money flow or where you place the blame, warns state Senate Majority Leader Bill Raggio, it boils down to raising someone's taxes.
"Where would the money come from is the question," says the Reno Republican, who chairs the Senate Finance Committee.
Shared funding
The current state education financing system, called the Nevada Plan, was crafted to make funding a shared responsibility between the state and the districts.
The state took on the task of guaranteeing a certain per-student amount for operations, while the districts assumed responsibility for building the schools. As part of the deal, the state gave up almost all its property tax income, leaving that revenue source to the schools and other local agencies
"It was worked out that way," Raggio says, "primarily because that's the way the school districts requested it and wanted it."
A successful court challenge, the Senate leader says, would likely scrap the Nevada Plan.
Raggio expects the issue to come up next session, but he questions whether any of the solutions will be "workable."
"You have to push that up against the other responsibilities the state has under the existing revenue stream," he says. "And the state has a limited amount of revenue."
UNLV education Professor Teresa Lyons Jordan says the state can afford to do more.
In a recent study of 10 Western states, Jordan found Nevada ranked the highest in per-capita personal income, but lowest in total education spending per student.
"We're fairly wealthy," says Jordan, who with her husband, K. Forbis Jordan, recently co-authored a book on school finance. "We just choose not to put more of our money into education."
Idaho, by contrast, is a fairly poor state in terms of personal income, ranking last among the 10 states, she says, but it tied with Oregon for the highest spending per student.
"Idaho puts a lot of effort on education," Jordan says. "We're just the reverse. We're a very low-effort state."
Besides, she says, much of the taxes collected by the state are paid by tourists, not residents.
"We've got some room to put additional effort in education," she says.
The problem, says Cram, is that Nevada keeps advertising itself as a low-tax state.
"We attract people on the assumption that they're going to pay 99 cents for breakfast," Cram says, "and when they have to pay $2.59 for lunch, they're torqued."
The stream of newcomers expecting a low cost of living is good for the economy, Cram says.
"But the same thing that's putting the money in all those cash registers in Clark County delivers to the schools the absolute necessity to give these kids a place to sit down."
In the breakneck race to put seats under students, the school district likely will be seeking two bond measures in the fall.
With increases in property values and retirement of old bonds, Cram figures the district can ask for about $225 million without raising property taxes.
Problem is, he says, "we probably need somewhere in the neighborhood of $500 to $600 million to rehabilitate old schools and to build new ones."
The down side, Cram says, is even if the district could get a half-billion dollars in bonds approved by the voters, "it would last us a very short time."
The cities and county, education advocates note, can look to many different sources of income to build new facilities, but school districts, which provide a legally required service, can only go begging to the property owners.
"It really comes down to there's no such thing as a free lunch," Cram says.
"We're going to have to assume that kids are just as important as roads and stop signs and all the other things we have to do."
New revenue
Professors Verstegen and Jordan say funding for capital projects gets short shrift across the country.
Of the 36 states that provide some funding for school building, Jordan says, there are "only about a half-dozen who put a lot of money in the pot."
But partially as a result of prodding by the courts, many states are working on the problem.
In some states, the districts submit projects to the state. If they meet certain requirements, the state picks up part of the tab.
Others help pay for the bond debt, reducing the cost to the property owners. Still others simply contribute an annual per-pupil allowance.
Some states, notably California, have assessed heavier fees on new development.
Hank Etchemendy, director of the Nevada Association of School Boards, says his group has been advocating impact fees "for quite some time." But every proposal has been killed in the Legislature by construction and development interests.
"We're not saying impact fees are ideal," Etchemendy says, "but we have to find some way that state and local districts can become partners."
Other schemes involve state grants to schools or state help with design and engineering.
Gov. Bob Miller won't commit himself to offering any state assistance. Instead, he favors legislation that would allow bond-generated tax rates to be maintained after the bonds are retired.
By requiring districts to add measures to the ballot just to stay even, Miller says, "we make it impossible to get in increases."
Cram says the solution will have to include several sources to be successful.
There will always be a need for bonds, he says, and impact fees could help some. In addition, he says, the cities and county could help by waiving requirements for off-site improvements such as street lights and new roads.
Those improvements, according to district figures, cost $15.5 million or about 3.5 percent of all the money spent out of the 1988 bond measure.
Whatever combination the lawmakers and educators work out, the package still will have to be sold to the voters, a prospect that concerns Cram.
The public, he says, is becoming "less concerned" about public works.
"We have to convince people it's in the best interests of the economy and our country to have a well-educated work force," the superintendent says. "A lot of people don't believe that, at least they don't vote that."
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