Education funding at a critical cross-road
Thursday, May 22, 2014 5:00 PM
As a rural community with strong connections to our local mining partners, we have understood the volatility of gold prices and the impact that reductions in those prices can have on the community. For many members of our community that were present in the early 2000's, we can recall when gold prices took a critical reduction having detrimental impacts on our local economy.
Within the educational arena, the fiscal stability of the school district is also directly connected with the viability of gold. During the 2000 downturn, the district faced a critical reduction in revenue as a result of local support leading to a drastic reduction in available revenues. I recall being one of 5 central office staff members that was required to notify over 70 staff members that they may not have jobs in the following year.
This was a devastating time for everyone. Though the district was ultimately able to recall most staff members, the damage was done. It took the district years to fully recover, and in some ways, is still in the process of recovering. The ultimate question is, how could this happen?
In 1967 the current funding formula for public education was adopted. Under this plan, it is generally a 1/3 local, 2/3 state split for funding. However, as the availability of local revenues increases, the state's support decreases. As a result, when gold prices were in their prime at around $1,800 dollars an ounce, the District saw no direct fiscal benefit as the state simply reduced the amount they contributed.
As a complicating factor, districts are required to develop and submit a "tentative" budget in April for the upcoming school year. Understanding that gold was at a lower price than the previous year, the district was notified by the Department of Taxation that the Net Proceeds of Minerals (NPM) funding level would be more than a million dollars less than last year with an anticipated funding level of $3.8 million. As a result, changes were implemented and unfilled positions were reduced.
Unfortunately, we were notified of two impacts after the development of the tentative budget: the application of overpayment of NPM taxes and an error in the formula by the Department of Taxation. As a result of these additional factors, the anticipated $3.8 million is projected to come in at around $500,000.
Given that the local revenue stream has reduced, the state's obligation will increase, but as a result of the reversion of the overpayment, we will be far from made whole. Initial projects place the district in a deficit of approximately $1.6 million dollars as we prepare for the upcoming school year.
As a result, we have been working closely with each individual site to evaluate which vacant positions could be eliminated understanding that over 85% of our budget is tied to personnel. We maintain a strong commitment to continue to provide employment opportunities to employees that are currently within our employ, but must carefully evaluate positions that are vacated.
To complicate funding issues in rural counties, such as Humboldt, which relies on NPM revenue, the last legislative study has directed that a task force be developed to address education funding in Nevada. Though this would appear to be a good thing given the negative fiscal impacts we are dealing with, the underlying discussion revolves around a perceived inequity in the method in which Clark County is funded.
Under one analysis, it is proposed to reallocate approximately $90 million dollars between Clark and Washoe County School Districts. This $90 million would not come from a new pot of funds, rather from a reduction of allocations provided to the other 15 school districts. The reality is that $90 million would be inconsequential for these districts but would decimate the remaining 15.
Ultimately, the message must be that it is not possible to take an inadequate piece of pie and cut it into smaller pieces and hope for increased academic performance. As it currently stands, all school districts in Nevada are woefully funded, understaffed and facing greater reductions in the future.
I believe now is the time that we must stand up for education. As I visit with principals and teachers, there is not one staff member that is afraid of accountability, yet each struggles with a system of accountability that provides inadequate supports. As we work as a district, county and state with the goal of increasing opportunities in Nevada, education must be the first place that we look.
Dr. David Jensen is Superintendent of Schools and can be reached at (775) 623-8196 or firstname.lastname@example.org.