CCSD braces for more budget cuts as ‘fiscal cliff’ looms

By Paul Takahashi

Wednesday, Dec. 5, 2012 | 11:32 a.m.

The Clark County School District could be forced into "drastic" budget cuts if the federal government is unable to resolve the country's looming debt crisis.

President Barack Obama and Republicans in Congress are trying to broker a deal to rein in the federal debt. If they fail by the year-end deadline, the Budget Control Act of 2011 will trigger "sequestration:" a series of automatic tax increases and almost-across-the-board budget cuts of roughly $1.2 trillion to federal programs.

Should the country fall off the proverbial "fiscal cliff," school districts across the nation could face $2.7 billion in cuts to federal education programs serving 30.7 million children. Nevada would stand to lose about $18 million in federal education funding, $13 million of which would impact Clark County.

It’s unknown yet how sequestration would affect the Clark County School District, which educates the majority of Nevada’s children. Officials are now starting to prepare contingency plans as politicians in Washington deliberate different budget solutions.

"We're all sitting on the edge of our seats," said Jeff Weiler, the School District's chief financial officer. "Like everyone else, we are very concerned."

School Board members say sequestration could lead to teacher layoffs, larger class sizes, shorter school weeks and a loss of courses, extracurricular activities and special services.

That's why the School Board unanimously adopted a resolution on Wednesday that calls upon the federal government to stop sequestration from happening. The resolution was drafted and approved based on a recommendation from U.S. Education Secretary Arne Duncan and the Council of Great City Schools.

Clark County Schools Superintendent Dwight Jones commended the board for adopting the resolution.

"A $13 million hit to our school district – especially to our neediest children – would be a pretty devastating hit for us," Jones said.

The board rarely considers a resolution on a federal matter they have little impact on and no jurisdiction over. However, sequestration is a grave matter for the School District, board members said.

If sequestration comes to pass in Clark County, this new round of belt-tightening would come on the heels of a Great Recession that has decimated state coffers and forced the School District to slash more than $500 million since 2007.

The district can’t afford to lose any more funds, officials said.

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The School District receives about $170 million in federal funding from the U.S. Education Department annually for elementary and secondary education programs. If sequestration occurs, the School District is estimating an 8.2 percent reduction.

Even though that $13 million cut represents just about 1 percent of the School District's general and special revenue fund budget – which totals more than $2 billion – it's still a significant amount of money, Weiler said.

That's because the vast majority of these federal funds go to Las Vegas' most disadvantaged children.

"A cut in federal funds would be very devastating," Weiler said. "All this money goes to programs that help the most needy students in some of our most at-risk schools."

About half of the federal money – nearly $82 million – is in Title I funding, which go to public schools with high numbers of students from low-income families.

A record 224 schools – or about 63 percent of the district's 357 schools – are considered Title I schools this year, up from 91 schools last year. These schools are using this federal money to fund "high-need" teaching positions, as well as after-school tutoring, literacy and math programs.

The rest of the federal money is going to "turnaround" schools, professional development and consultants, programs for English Language Learner students and special needs students, career and technical education, and community learning centers.

If federal education funding is cut beginning Jan. 1, the School District would most likely curb these entitlement programs, Weiler said.

However, since the federal government mandates many of these programs – such as special education services – the School District may look toward more drastic measures to bridge any federal funding gaps. These options include shorter school days and furlough days for staff.

It’s still too early to tell how the district would respond to sequestration, Weiler said.

"At this point, it's all speculative," he said. "We're waiting for better information to see where the cuts might happen."

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Aside from federal education dollars, the School District also receives about $90 million from the U.S. Agriculture Department to pay for free and reduced-priced meals for low-income students.

About 171,000 students – a little more than half of the 311,000 Clark County public schoolchildren – receive free and reduced-priced breakfasts and lunches.

This school meal program is unique in that all of the federal money – $2.61 per meal – covers the entire cost of the School District's food services department. Any federal cuts to this meal program could mean the School District is liable to pick up the tab.

If the district decides it can't eat the loss, schools may have to reduce the amount of food it serves per meal, or increase the eligibility requirement to serve fewer students. Both options would hurt struggling families and children in Las Vegas, Weiler said.

Another pressing issue for the School District concerns talks of reducing or eliminating the tax exemption status on municipal bonds, which has kept interest levels low on school bonds.

The district – which recently failed to garner voter support for a tax initiative to fund school repairs – will be banking on a new capital bond program in the coming years to fix its aging school buildings.

Eliminating the district's tax-exempt status would mean the district must pay more in interest on its school bonds.

"It's like your mortgage rate going up," Weiler said. "That hurts us on the capital side."

Regardless of the consequences, sequestration's impact on Clark County would only occur in the fiscal year starting July 1, 2013. That's because the School District has balanced its budget for this school year, which leaves a little lead time to figure out where to make up a potential shortfall.

With the upcoming Legislative session coming in February, one of the School District's options – should sequestration occur – includes asking state legislators for more funding. Sequestration won’t affect any per-pupil funding from the state.

Gov. Brian Sandoval has pledged to keep education funding flat, but he might be pressed by local school districts for more state funding should federal dollars fall short.