Treasurer: Loan for schools out of the question

By Emily Richmond (contact)

Thursday, July 10, 2003 | 11:26 a.m.

Nevada Treasurer Brian Krolicki said Wednesday there's no chance of a state loan for either the Clark County or Washoe County school districts to help pay the bills until the Legislature finalizes a budget.

"The bottom line is that there is no statute or court order that would allow me to front the monies should this impasse persist," Krolicki said. "(The school districts') relief will come from a solution to the budget."

While they await a decision from the Nevada Supreme Court, officials for the state's two largest school districts have both contacted Krolicki's office inquiring about the possibility of a short-term, no-interest loan to continue operating.

The Clark County School District will deplete its general fund soon after making payroll Aug. 5, said Walt Rulffes, deputy superintendent of operations. And in Washoe County, school district officials say their coffers will be empty by Aug. 21.

Krolicki said in some instances he's allowed to invest state dollars in local municipalities -- such as buying construction bonds. But the school district's short-term lack of cash for operational expenses doesn't qualify, Krolicki said.

"The Legislature, the governor and all of the different factions know this crisis will hit the first real public stage in August when the state's two largest school districts hit the wall, so to speak," Krolicki said. "Before that happens all sides need to reach down. Where they've been intractable, they need to be flexible."

Clark County School Superintendent Carlos Garcia has called a Cabinet meeting for this afternoon to update staff on the latest developments with the Nevada Supreme Court. The Clark County School Board meets tonight and will hear a presentation on the financial options that have been identified, Rulffes said.

The school district may be able to borrow money from its own reserve accounts and pull together the $20 million to $30 million needed to get through the end of August, Rulffes said. The bulk of those dollars would come from the risk management account -- a reserve used to pay workers' compensation claims and settle lawsuits.

There are some uninterrupted sources of revenue for school districts statewide but none are enough to continue overall operations, officials say.

While lawmakers hash out a final budget, school districts will continue to receive their share of property and sales taxes collected on their behalf by the state, said Chuck Chinnock, executive director of the Nevada Department of Taxation.

Clark County receives about $40 million a month from sales tax revenues and $335 million a year from its share of property taxes. But the funding from the state makes up the bulk of the district's general fund, Rulffes said.

Because the Legislature has yet to approve education funding levels for the fiscal year which began July 1, the Clark County School District has halted hiring the more than 600 new teachers still needed for the start of the academic year Aug. 25. To make a job offer to a teacher without knowing if the money exists to pay their salary would be like intentionally writing a bad check, Garcia said.

"That's not only wrong, it's illegal," Garcia said.

Assemblyman Bob Beers, R-Las Vegas, who has refused to vote for the tax increases attached to the education funding bill, said Wednesday he hoped the Supreme Court would force the Legislature to unhook the two.

"We are increasing K-12 funding by $327 million, but there's $870 million in taxes attached to it that have nothing to do with education," Beers said.