Nevada Schools May Lose State Bet on Sales Tax
A less drastic version of the property-tax revolt that occurred next door in California has combined with an increased reliance on sales taxes as sources of school revenue--at a time when the gambling and tourism industries are significantly depressed--to produce an estimated $14.3-million shortage in Nevada's Distributive School Fund.
The fund last year paid $162 million to local districts to help equalize spending in Nevada's 17 school districts, which vary greatly in size and wealth.
The state legislature each year sets a minimum per-pupil expenditure (averaging $1,818 in 1982-83), and the fund is supposed to provide the difference between this figure and the per-pupil revenue raised from local sources.
The fund is dependent on state and local sales taxes, which tend to rise and fall with the fortunes of Nevada's major industry--gambling-related tourism.
And a decrease in local property taxes--ordered by the legislature after the narrow defeat in 1980 of a property-tax-cutting measure similar to California's Proposition 13--has put an additional strain on the fund at a time when sales-tax revenues are down.
The projected shortfall has prompted Gov. Robert List to ask the state's school districts voluntarily to cut a total of $8.6-million from their combined budgets for the 1982-83 school year, something that the districts are reluctant to do.
And a proposed budget for the next biennium, approved last week by the state board of education, would require "either a very significant increase in local school-support taxes or a restructuring of the financing system," according to Douglas A. Sever, director of fiscal services in the Nevada state department of education.
That plan--which would allow salary increases of 7 percent next year--would require an increase of $25.7 million, or 17.5 percent, in appropriations to the distributive fund.
Before the 25-percent decrease in property taxes, the state paid approximately 40 percent of the average district's operating expenses, said Mr. Sever. The state share is now approximately 60 percent, he said.
But although sales taxes were increased slightly by the legislature, sales-tax receipts have not grown fast enough to keep up with state spending needs, according to Ted Sanders, Nevada's superintenent of public instruction.
State officials believed that tourism and gambling, which had proved somewhat "recession-proof" in the past, would provide a stable source of revenue for the fund.
In 1982, for example, the state was expecting sales taxes to generate a total of $103 million for educa-tion, but took in only $93 million, Mr. Sanders said.
Proceeds from mining, a significant part of the local contribution, are down as well, following a "short period of boom and bust" because of the rising and falling prices of precious metals, he added.
The Governor informed county superintendents and school-board presidents of a probable shortfall late last spring, and as a result of subsequent meetings involving other state and local education officals, he received a tentative pledge of cooperation.
Because Nevada requires a balanced budget, "either the state has to come up with the money or we'll have to make some serious and hard adjustments in the spring," said Mr. Sanders.
Mr. Sanders said there are not sufficient funds now to make payments to the districts through the entire fiscal year.
Some school officials, although they have agreed to examine their 1982-83 budgets for further possible cuts, do not think they can cut any more.
The president of the 6,000-member Nevada State Education Associaton, Marian C. Conrad, has urged school boards not to make the cuts, saying that the districts have already pared down enough.
According to Edward A. Greer, associate superintendent in the finance division of the Clark County (Las Vegas) school district, the state's largest with 88,000 students, "The additional cut would not be possible here. There's no way we could cut further without drastically affecting programs and cutting jobs."
"We're looking at what we could possibly do in advance of the October meeting [of county school superintendents]," said George W. Brighton, associate superintendent for finance in Washoe County School District, which includes Reno. He said the the district cannot make many decisions without final enrollment figures, which will not be available until next month.
Vol. 02, Issue 01