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Clark County School District’s tentative budget forecasts 1,350 layoffs in ‘worst-case’ scenario


Justin M. Bowen

Dwight Jones, the Clark County School Superintendent, is photographed in his office Thursday, January 20, 2011.

Updated Wednesday, April 11, 2012 | 6:10 p.m.

Nearly 1,400 jobs may be cut if the Clark County School District doesn’t win its arbitration battle with its teachers union, according to a tentative budget proposal unanimously accepted Wednesday morning by the School Board.

The School District faces a “worst-case” budget deficit of nearly $64 million next school year if it is forced to grant salary step and education increases to its teachers, according to Jeff Weiler, the district’s chief financial officer, who presented the tentative budget to the board.

Since salaries and benefits account for nearly 90 percent of general fund expenditures, the School District may be forced to shed 1,000 teacher positions if the Clark County Education Association — which represents more than 18,000 teachers — prevails in arbitration.

Another 300 teacher and support staff positions are also on the chopping block because a one-time federal EduJobs stimulus grant of $55 million will not be renewed past June 30.

About 50 positions paid for by the 1998 school bond program to oversee and manage school construction may also be cut as the capital campaign comes to a close. However, voter approval of a new, $5.3 billion capital improvement plan over the next decade may save these positions. The capital improvement plan is in the working stages.

In total, about 1,350 positions are on the line under the “worst-case” budget scenario, Weiler said. The School Board on Wednesday approved giving reduction-in-force power to Clark County Schools Superintendent Dwight Jones. Pink slips may be sent out to affected employees by mid-May.

Although the district is still looking at which positions are not “mission-critical,” eliminated positions may include literacy specialists and education computer strategists because they would not affect class size calculations, Weiler said.

“None of these are choices we like to have to make, he said. “The superintendent would say the same thing. It really goes against certainly a lot of the things he’s trying to do to try to improve instruction, results and getting kids ready by exit.”

The teachers union remained adamant about continuing to press for the salary step and education increases they say are entitled to them under their current contract. Union President Ruben Murillo maintains the School District has the money to pay for teacher raises, and he questioned the district’s decision earlier this school year to hire hundreds of new teachers.

Murillo also said multiple union concessions, negative working conditions and layoff threats had many teachers voluntarily leaving the district. He said teachers were worried not only about their jobs, but also how class sizes might increase by three or four students if 1,000 teachers were laid off.

“Why would teachers come to the district when there is so much uncertainty?” Murillo said. “Our goal is to keep teachers in the classroom and keep students engaged.”

Since 2007, the School District has cut nearly $500 million from its budget as a result of the recession, Weiler said.

“We’re challenged in a lot of areas, and we’re trying to be as flexible and as efficient as we can, but there’s only so much that we can do,” he said. “We think we’ve really stretched as far as we can.”

Even under a “best-case” budget scenario, the district would face a $3 million shortfall, Weiler told board members. That level of red ink, however, would be “manageable,” he added.

The budget can swing that much because it represents a snapshot in time of the district’s financial health. Constantly fluctuating variables — such as fuel and water costs and the upcoming arbitration outcome — may change the budget scenario at any moment, Jones said.

“We’ve made our best guesses and estimated, but this is very tentative,” Jones said of the budget, adding he planned to have a better financial picture in May. “It’s still very early in the (budget) process.”

The School District’s general fund — which pays for day-to-day operations — is expected to be around $2.05 billion next fiscal year, which starts July 1. This represents a decrease of 1.7 percent, or $35.7 million, from the current year.

Even though state per-pupil funding allocation and the local school support tax revenues have risen, property tax revenues continue to be on the decline, Weiler said. Student enrollment and other local taxes are also on the decline, he added.

As a result, the School District is anticipating $7 million less in revenue next school year, Weiler said.

Total expenditures are expected to fall about $15.6 million next year, assuming $64 million in union concessions, he said. But in certain areas such as salaries and benefits and fuel and water costs, though, expenditures have risen, Weiler said.

Although the School District has shed about 850 positions since 2007, employee compensation has shot up by $240 million, or about 13 percent, in those five years, Weiler said.

Further, although the School District has reduced water consumption by 32 percent since 2000 by installing more than a million square feet of artificial turf, a recent Southern Nevada Water Authority rate increase of 40 percent has the School District allocating about $4 million more next year for water purchases, he said.

Skyrocketing gas prices in recent months, Weiler said, prompted the district to allocate an additional $4 million more to run buses next year, even though it has reduced bus mileage by nearly 2 million miles a year with bell-time consolidation and bus route changes.

All in all, the School District will carry over a $40 million ending fund balance next year. That represents a $20 million decrease from this year — and will fall below the School District’s 2 percent ending fund balance minimum.

The School Board approved lowering the minimum ending fund balance to 1 percent on Wednesday. However, because the School District has carried a 1 percent ending fund balance for the past three years, the district must notify the state Taxation Department of its reasons.

Governmental entities, including the School District, must carry over a certain percentage of their budgets in case of unforeseen circumstances. If an ending fund balance falls too low, it may trigger a state takeover of an entity’s fiscal operations, which almost occurred in North Las Vegas when the city fell dangerously close to its state-mandated 4 percent ending fund balance.

Weiler said he did not anticipate state interference. The state, he said, relies on a number of other fiscal indicators aside from the ending fund balance in its fiscal health checkup.

Still, School Board members expressed concern over the district’s small ending fund balance.

“We need to recognize this is poor fiscal practice to have an ending fund balance at 1 percent,” School Board member Carolyn Edwards said. “But I don’t see any other way.”

School Board member Erin Cranor said while carrying such a small savings for emergencies is concerning, budget cuts have forced the district to dip deep into its reserve to keep about 800 teachers in the classroom. It was a tough trade-off in this rough economy, she said.

“We’re trying our best to educate these kids in this economy,” she said. “Students first.”

The School District must submit its approved tentative budget to the Taxation Department by April 15.

The board is scheduled to receive the final budget on May 16. The deadline for the district to submit its approved budget to the Taxation Department is June 8.

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