Las Vegas Sun

October 19, 2019

Currently: 59° — Complete forecast

Nevada Legislature:

Commissions, weights and overhauls: Explaining Democrats’ new education funding proposal

School finance formula

Ryan Tarinelli / AP

Nevada state Sen. Joyce Woodhouse, D-Henderson, at podium and flanked by other Democratic lawmakers, speaks at a news conference Monday, May 13, 2019, about a bill that would overhaul the way the state allocates education funding. The lawmakers met the media at the Capitol in Carson City.

CARSON CITY — State Democrats unveiled their education funding overhaul bill last week, tackling an aging school funding formula that critics say has not kept up with the state’s growing population and changing demographics.

If Senate Bill 543 — the Pupil-Centered Funding Plan — becomes law, it will be the first serious revamp of the state’s education funding apparatus in more than 50 years.

So, what would be its effect? Let’s break it down.

What is the current system?

The current funding system — the Nevada Plan — has been in place for more than half a century. Democrats in the Legislature identified changing the system as one of their priorities for this year’s session.

The current plan allocates state funds “to ensure each Nevada child a reasonably equal educational opportunity.” State allocations are based in part on the amount of local funding public school districts receive. So, for example, Nye County School District is going to get more per-pupil funding from the state than Clark County School District just based on the population. More people, more local taxes.

The current system has come under criticism for short-changing the state’s urban school districts at the expense of rural disticts.

As of now, Nevada sets the amount of per-pupil funding for schools every legislative session based on how much local funding is available.

The new bill was brought forward by Democrats, with Republican leadership expressing some initial concern.

Republican lawmakers, who find themselves in the minority in both the Assembly and state Senate, have not expressed their caucuses’ view of the bill as a whole, said Sen. Scott Hammond, D-Las Vegas and co-minority whip. “The only thing that we’ve come up with a position in is we’re worried about how late this is coming because we want to make sure we vet it,” he said.

He said Friday that he had planned to read the bill over the weekend, and added that he disliked what he felt was a rushed process.

“When you have something that comes this late, no matter how good or potentially how bad a bill is, you just never give it a chance to be vetted completely,” he said.

From where will the money come now?

Probably the biggest change is the creation of the State Education Fund, which would replace the State Distributive School Account.

The State Education Fund would essentially be set up as a one-stop shop for education funding, and the Legislature must ensure that it is filled enough to fund education in the next biennium.

Money now dedicated as local funds — such as the local school support tax and one-third of property taxes and mining taxes — would be deposited into the new State Education Fund under this bill.

The local school support tax is a 2.6 percent sales tax imposed in every county. Mining taxes are collected under the net proceeds of mineral tax, a property tax collected on minerals produced in the state. The tax varies with the value of the minerals and the net proceeds of the mine in the previous year.

Sen. Mo Denis, D-Las Vegas and chair of the sponsoring Senate Education Committee, said the allocation of all education money into one account was a simpler way to track funds than now occurs.

How will the funding allocation to school districts change?

In short, the bill would funnel money to schools based on the cost of educating each student. That cost could be increased based on certain needs, for example whether a student is an English language learner or has a learning or physical disability.

As of now, money is sent to schools with a larger total population of at-risk or English language learner students under the Zoom and Victory Schools programs. The Victory School program provides extra funding to some lower-performing schools in higher-poverty districts. The Zoom Schools program provides extra funding to the lowest-performing schools with the highest percentage of English language learners.

Under the new plan, school districts would receive a higher amount of per-pupil funding for students with exceptional needs, including English language learners.

According to a school finance study ordered by the state, the increase in funding that may be required by students with exceptional needs varies. At-risk students — students who come from poorer families or who are not doing well academically — could require from .31% to .46% more funding, English language learners could need .4% to .55% more, and special education students could need .7% more than the standard per-pupil outlay.

The gradual replacement of existing categorical funding with the weighted funding programs has been a sticking point for the Nevada State Education Association, one of the state’s largest teachers unions and a traditional backer of Democratic candidates, which has opposed the bills.

“With reduced funding, the current model will be watered-down and compromised,” a statement from the group read. “SB 543 threatens Nevada’s two most important education equity programs that have been proven effective though state evaluations. By shifting funds away from our schools to a ‘pupil-centered’ approach, Zoom and Victory schools lose significant momentum on school climate and culture, jeopardizing the gains they have made in our most impacted schools.”

Exactly what the weighted amount for special categories of students would come out to would be left to a newly created advisory committee — the Commission on School Funding. Denis compared the Commission to the Economic Forum, an appointed group of economic advisors that calculates official revenue estimates for the state.

What is the Commission on School Funding?

The bill would create an 11-member commission tasked with making recommendations for the plan’s administration, reviewing per-pupil funding and weighted categories of students and reviewing education laws and regulations in the state.

Seven of the 11 members would be appointed by the governor, speaker, majority leader and minority leaders, with the governor getting to appoint the chair, minority party representatives getting one appointment and representatives of the majority party getting two.

The governor will also appoint four other members drawn from nominated chief financial officers — two from school districts with over 40,000 students and two from districts with less than 40,000. These members would serve for three years and are eligible to be reappointed.

The commission would meet for the first time on Oct. 1, and would meet as many times as are “necessary.”

When will it go into effect?

Not for a while.

The bill, if signed into law, will take effect during the 2021-2023 biennium. The Commission on School Funding would project what school funding would look like under the new formula in the 2019-2021 biennium and compare the projection to the current funding system.

Shortly before the 2021 legislative session, the commission will recommend any changes it sees as necessary “for the successful implementation of this act” to the governor and Legislature.

Does this bill create any new funds?

No, and that’s been the source of the main pushback from teacher groups.

The NSEA said no plan would work without new funding sources. Since the plan’s release, Democratic lawmakers additionally have proposed plans to increase education funding by dedicating the excise tax levied on recreational marijuana sales toward education and giving counties the ability to increase sales taxes for educational purposes. SB 543, however, would not add any extra funding.


What about school districts in rural counties? How would this bill affect them?

For many rural counties, this bill would include a revenue freeze. It would also, however, include a “hold-harmless” clause, essentially ensuring that the funding to these rural counties will not decrease from this year’s number.

Rural counties generally have more funding from mining taxes, which they can use to supplement what the state gives them due to two-thirds of that tax revenue existing “outside” the current funding formula.

Under the new plan, however, this money would go into the new State Education Fund to be dispersed statewide. The concern for rural counties is that they could experience enrollment increases while not being able to increase their total funding.

“Many of these districts like Nye County for example are experiencing a lot of growth,” said Chris Daly, deputy executive director of government relations for NSEA.

Daly compared the problem rural districts potentially face to a household with rising costs and static income.

“If you have a set amount of money and your rent is going up and the price of gas is going up and you have another kid ( with no increase in income), that’s a tight squeeze,” he said.

Hammond said that while he thought the bill, from what he’s seen, would be good for his constituency, he wanted to make sure it didn’t adversely affect more rural areas.

“My initial read is that it’ll be good for Clark County, it’ll be good for the students down there,” he said. “I represent the students down there, but (I’m) also concerned about the state of Nevada.”

What’s next?

The bill is currently scheduled to be heard Tuesday before a joint meeting of the Senate Finance Committee and the Assembly Ways and Means Committee.

With the end of the legislative session rapidly approaching, lawmakers will have to work quickly to get the bill passed.