Report rips state fund

Friday, June 14, 1996 | 11:59 a.m.

CARSON CITY -- Students in some Nevada counties attend schools that should be condemned while youngsters in other counties enjoy modern, attractive classrooms.

This disparity could lead to a legal challenge that Nevada students are not being treated equally, says a consulting team studying the state's educational system.

State government, which doesn't pay anything now for the construction of schools, should chip in for part of the cost to avoid future suits, says Management Analysis & Planning Associates of Berkeley, Calif.

The firm was hired by a legislative subcommittee to examine the possibility of breaking up the Clark County School District, the nation's 10th largest, and the consolidation of other districts. But it expanded its research into other areas.

"Financing school construction and maintenance offers a dilemma Nevada needs to resolve regardless of what other action it takes on the subject of district boundary configurations," said a preliminary report presented earlier this week to the subcommittee headed by Sen. Jon Porter, R-Boulder City.

In its visits to the 17 school districts, the consultants said they "were struck by the disparate quality of school buildings among school districts."

"Under current law, both students and taxpayers receive unequal treatment," the consultants said.

"Some student attend classes in impressive, attractive facilities designed to accommodate state-of-the-art education programs. Other students attend classes in drab, obsolete structures that should have been demolished long ago."

For example, the consultants said the "differences between Goldfield Elementary in Esmeralda County and Eureka Elementary or Mineral County High and Cimarron-Memorial High (in Las Vegas) are stark and profound."

Facilities in Esmeralda and Mineral counties are the ones that are outdated.

Nevada is one of 10 states that provide no aid for school construction. It's left to the school districts, which must ask voters for approval to issue bonds.

Clark County voters will be asked Nov. 5 to approve a bond issue for new schools and to refurbish existing ones. The total dollar amount is still being determined.

The Washoe County School District has put a $196 million bond issue on the Sept. 3 primary ballot for 10 new schools plus improvements to existing facilities.

And a $48.5 million bond issue will be before the Carson City voters Nov. 5 for two new schools, renovation of existing ones and purchase of technological equipment.

The state's formula for supporting the daily operations of the schools takes into account the wealth between districts. And it ensures, for the most part, that aid for operating an education program is substantially equal among districts.

But that's not the case when it comes to helping build the schools.

Added taxes

Management Analysis estimates the state would need $275 million a year to pay for all the construction needed in the schools. Jean Botts, an expert in school finance who works for the Legislative Counsel Bureau, has estimated it would require an 87-cent increase in the property tax per $100 of assessed valuation to pay for the new program.

For a $100,000 home, that would translate to an additional $304 in property tax per year.

Botts estimates the sales tax would have to be raised by 1.25 cents to pay for the $275 million a year. Or school construction could be financed by an increase in the gaming tax from its current 6.25 percent to 10.25 percent.

None of these tax options would stand much of a chance in the Legislature and they could spark a taxpayer revolt.

Management Analysis knows this and suggests a shared responsibility to pay for the new schools involving the state, the school districts and developers.

"It spreads the burden of financing capital projects over all the taxpayers, all of whom benefit from a well-educated citizenry," said the consultants. "At the same time, it does not remove local responsibility for schools, because it would require local taxing effort as a condition of state assistance."

States that help out in school construction spend varying amounts. For instance, Alaska contributed $2,254 per student for school construction in 1994. Montana spent only $6 per student. The median for state aid was $104 per student.

If Nevada were to spend the median amount, the annual cost would be $27.5 million a year. And the money could be allocated to any project based on the assessed value per pupil in each district.

High-wealth districts such as Eureka County with its gold mines and small population would receive only a small percentage of their cost in state aid. But counties with a small assessed value per pupil, such as Elko, could receive a higher percentage for construction.

The third partner would be the developers.

"This is a potential revenue source largely untapped in Nevada," said the report.

Nevada law permits school districts in counties with fewer than 35,000 residents to level a developer impact fee of up to $1,000 per dwelling of new residential construction, including mobile home sites.

Growth a factor

With the population cap in the law, the fast-growing Clark County School District can't impose the development fee. If the Legislature decides to have developers join, the consultant said every county should be allowed to impose the fee.

"Developers have an economic interest in the quality of schools," says Management Analysis. "There is a strong correlation between residential property values and perceptions of school quality." But the consultants add that it's important the fees are not too high.

Management Analysis recommends a statewide survey to determine the full extent of the problem and how much money would be needed to fix the schools.

Suits have already been filed in Texas, Arizona and Ohio attacking unequal school facilities. And school experts are predicting similar actions in other states. Courts, said the consultants, are "taking these arguments seriously."

This promises to be one of the big education issues of the 1997 Legislature.

Gov. Bob Miller isn't saying yet whether he will support the state helping out local school districts with campus construction.