Education Funding

Districts’ Reserves Tempting in Nevada

By Michele McNeil — March 08, 2011 1 min read
  • Save to favorites
  • Print

When a state is desperate for money, nothing is sacred. Not even rainy-day funds school districts have socked away to pay off their debt in rocky times.

Nevada Gov. Brian Sandoval, a Republican, is eyeing those funds to help balance his state’s 2011-13 biennial budget. The idea is to scoop up $425 million in construction-bond reserves from 12 of the state’s school districts and essentially send the money back to districts to pay their general operating costs, such as teacher salaries. The proposal would have the biggest impact, in sheer dollars, on the 310,000-student Clark County district, which would have to cough up $300 million.

The reserve funds are there to cover debt-service payments if existing revenue sources—real estate and hotel-room taxes—can’t. The Clark County district, which includes Las Vegas, is projecting that because of a continued slump in the economy, it will need to tap those reserves over the next seven years to pay off its debt.

If the state grabs $300 million from Clark County’s reserve fund, the district predicts it won’t have enough money to pay off its debt starting in the 2012-13 school year, which could force the district to raise property taxes or refinance its loans.

In addition, the district warns that bond-rating agencies, which influence how much interest the district must pay to bondholders, may frown on a depletion of reserve funds. Already last month, two major rating agencies—Moody’s and Fitch Ratings—downgraded the district’s bond rating slightly. Gov. Sandoval, however, in his State of the State speech in January, said the impact of diverting those bond funds would be far less significant.

Late last month, the Clark County school board passed a resolution urging the state to leave those funds alone.

District spokeswoman Cynthia Sell put it this way: Someday you have to pay the piper. Basically, it would dig our hole deeper.

Related Tags:

A version of this article appeared in the March 09, 2011 edition of Education Week as Districts’ Reserves Tempting in Nevada


This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
IT Infrastructure & Management Webinar
From Chaos to Clarity: How to Master EdTech Management and Future-Proof Your Evaluation Processes
The road to a thriving educational technology environment is paved with planning, collaboration, and effective evaluation.
Content provided by Instructure
Special Education Live Online Discussion A Seat at the Table - Special Education: Proven Interventions for Academic Success
Special education should be a launchpad, not a label. Join the conversation on how schools can better support ALL students.
Special Education K-12 Essentials Forum Innovative Approaches to Special Education
Join this free virtual event to explore innovations in the evolving landscape of special education.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Education Funding What New School Spending Data Show About a Coming Fiscal Cliff
New data show just what COVID-relief funds did to overall school spending—and the size of the hole they might leave in school budgets.
4 min read
Photo illustration of school building and piggy bank.
F. Sheehan for Education Week + iStock / Getty Images Plus
Education Funding When There's More Money for Schools, Is There an 'Objective' Way to Hand It Out?
A fight over the school funding formula in Mississippi is kicking up old debates over how to best target aid.
7 min read
Illustration of many roads and road signs going in different directions with falling money all around.
Education Funding Explainer How Can Districts Get More Time to Spend ESSER Dollars? An Explainer
Districts can get up to 14 additional months to spend ESSER dollars on contracts—if their state and the federal government both approve.
4 min read
Illustration of woman turning back hands on clock.
Education Week + iStock / Getty Images Plus Week
Education Funding Education Dept. Sees Small Cut in Funding Package That Averted Government Shutdown
The Education Department will see a reduction even as the funding package provides for small increases to key K-12 programs.
3 min read
President Joe Biden delivers a speech about healthcare at an event in Raleigh, N.C., on March 26, 2024.
President Joe Biden delivers a speech about health care at an event in Raleigh, N.C., on March 26. Biden signed a funding package into law over the weekend that keeps the federal government open through September but includes a slight decrease in the Education Department's budget.
Matt Kelley/AP