Schools may seek loan to keep afloat

By Emily Richmond (contact)

Thursday, July 3, 2003 | 11:20 a.m.

With the cash flow dwindling, the bills mounting and the Legislature no closer to breaking its budget deadlock, Clark County School District officials said Wednesday they may need a $20 million loan to keep afloat next month.

"It appears by Aug. 8 we would be out of money," said Walt Rulffes, deputy superintendent of operations for the school district. "We're investigating now what we're legally allowed to do in terms of borrowing either from our other accounts, an outside entity or even the state."

Even worse would be if the budget isn't resolved by the time the new school year begins Aug. 25, Rulffes said. The district would need to borrow between $60 and $70 million to operate its full slate of 289 schools for the month of September, Rulffes said.

Gov. Kenny Guinn has filed a lawsuit asking the Nevada Supreme Court to force the Legislature to approve school funding levels and enough taxes to balance the budget. The Clark County School District and Washoe County School District have joined forces to file amicus, or friend of the court, briefs backing Guinn's lawsuit.

Because of the budget deadlock, Clark County School District officials say they've had no choice but to suspend hiring of new teachers for the 2003-04 school year. The district has reassigned current employees to fill some of the 1,000 vacancies for classroom positions. The district still plans to open 12 new schools next month to try to cope with the booming enrollment.

If the budget is resolved by July 15, the school district would be able to return 411 literacy and technology specialists, along with teachers in the gifted and talented program, to their original assignments, Orci said.

"We're all very sensitive to the July 15 deadline," Orci said Wednesday. "We're hoping for a quick turnaround by the Supreme Court so that we can get back to the business of educating children."

Bill Hoffman, senior counsel for the Clark County School District, said he's heard from several organizations, including the Nevada Association of School Administrators and the Nevada PTA, who have expressed interest in joining the amicus brief.

"We're supportive of the governor and attorney general's actions in this regard because of the devastating impact the lack of a final decision on funding has had on our ability to plan for the coming school year," Hoffman said.

But while the budget deadlock heads to the courts, school officials say they're still left with the question of how they'll make payroll if the Distributive School Account isn't finalized soon.

One possibility would be to seek an interest-free loan from the state, Rulffes said. The school district might also be able to borrow against future tax revenues, Rulffes said.

Nevada Treasurer Brian Krolicki said Wednesday he had not yet been contacted by the school district about the possibility of a loan and wasn't sure it was even a viable option.

"No money can leave the treasury without some explicit authorization," Krolicki said. "I am not aware of any enabling statute or court order that would allow me to make that kind of a loan."

If a request came from any of the state's school districts it would be given careful consideration, Krolicki said.

The Washoe County School District is also considering seeking a loan from the state and has gone so far as to send a letter of inquiry to Krolicki's office earlier this week, said general counsel Jeffrey Blanck. The state's second-largest school district after Clark County, Washoe will be out of money by Aug. 21 if the budget crisis isn't resolved, Blanck said.

Clark County School District receives about $40 million a month in sales tax revenues and about $335 million a year from its share of property taxes, said Chuck Chinnock, executive director of the Nevada Department of Taxation.