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January 28, 2015

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Ouch’ — School District grappling with $180 million deficit

Click to enlarge photo

Sheila Moulton

Behind the curve

The Clark County School District’s budget is not keeping up with inflation. The budget totaled $2.2 billion in fiscal 2009, fell to $2.1 billion in 2010, stayed at $2.1 billion in 2011 and will fall to $2 billion in 2012.

If it kept up with inflation, it would approach $2.3 billion, Deputy CFO Jim McIntosh told the School Board.


The pain expressed by Sheila Moulton, a Clark County School Board member, followed the surprise revelation of a projected $180 million deficit in the coming school year. That’s 9 percent of the district’s $2 billion budget.

The deficit could lead to 2,000 or more layoffs because the district doesn’t have the leeway under union contracts to cut pay rather than positions.

But, in a sense, “ouch” describes the entire budget process. The $2 billion isn’t certain, either.

In the coming months, the district must prepare a budget for the year ending June 30, 2012, negotiate union contracts that expire at the same time, while waiting for Carson City to order even more cuts for Clark County as the governor and Legislature grapple with what may be a $3 billion hole.

Fifty-five cents of current state spending goes to education — 15 cents for colleges and 40 cents for K-12 (much of it going to Clark County). The statewide budget deficit could be as much as 46 cents.

Such an enormous deficit could lead to hundreds of millions of dollars in cuts for Clark County schools on top of the projected $180 million, which would come on top of nearly $400 million in cuts over the past three years.

Some of the larger past cuts were $27 million in school staffing, $30 million from crowding more students into classes and $31 million by cutting back on textbooks and other supplies.

But first, the $180 million that surprised Moulton.

Jim McIntosh, deputy chief financial officer, told the School Board that a $150 million deficit is projected because of inadequate state funding, falling property tax receipts and expected pay increases when union pay concessions are restored next year if contracts are not renegotiated.

In the past, union contracts have extended as long as four years. But last year, because of the fiscal crisis, unions, including the largest, the teachers union, agreed to only one-year contracts. They agreed to pay concessions that largely avoided teacher layoffs. However, teacher positions have gone unfilled.

In addition, the state this week required increases in the district’s contributions to the pension plan, the Public Employees’ Retirement System, McIntosh said. That sum is projected to be $30 million, he said.

After the School Board meeting Wednesday, McIntosh said, “We have several unknowns right now. We have to negotiate contracts with our unions, so hopefully we can receive the concessions we received in the current year or extend those and get additional concessions.”

The district’s budget, which has federal and other sources of revenue, has failed to keep pace with even the modest inflation of recent years and declined in absolute terms, McIntosh said.

The district’s budget totaled $2.2 billion in fiscal 2009, fell to $2.1 billion in 2010, stayed at $2.1 billion in 2011 and will fall to $2 billion in 2012. If the budget kept up with inflation, it would approach $2.3 billion, McIntosh said.

Under any scenario, with or without tax increases, the governor and Legislature must make large cuts in education.

The good news is one of the district’s own, Dale Erquiaga, a former School District policy analyst, will be Gov.-elect Brian Sandoval’s deputy chief of staff.

Erquiaga, 47, has testified before the board numerous times and knows the nuts and bolts of the district. His 22-year-old son and 19-year-old daughter were educated at Clark and Washoe County schools.

The bad news is politics. The Democrats hold a 26-16 majority in the Assembly and 11-10 in the Senate, but the leads are hardly commanding.

If tax increases are required to maintain basic services, including the Clark County School District, then Democrats will need three Republican votes in the Senate and two in the Assembly to pass them and override a potential Sandoval veto. If not, a stalemate might result.

As McIntosh told the School Board, “anything can happen in a legislative session.”

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  1. We will save time & money, if we just shut down all these costly, public schools...NOW...before it's too late!

    I expect that this would receive full support in the House, when the Republicans bring their little axes to the first session.

    Don't laugh at this suggestion...admit defeat, when you are defeated.

    Look at what education's "final product" (adults...even the upper tier) has produced.

    Genius economists, well-spoken, polished politicians and clever (the bottom line is my life) business execs, who have all used this "valuable education" to create a deficit-driven world of "todays with no tomorrows."

    ...or am I wrong? I'm listening.

  2. When children, their parents and teachers are dropped completely off the priority list, there IS no civilization.

    Democracy is gone. The two political parties aren't representatives of the people (never were really).

    But the highly delusional "ruling class" broke their (behavioral control) money machine (that primarily served THEM).

    Depressions, recessions...bah! Just words to offer the illusion that someone knows what is going on.

    Money is a tool of commerce. And commerce has become a "scorched earth" proposition, shredding the fabric of life's support systems.

    The monetary / fiscal idea has just about run its destructive course.

    By the rules of THEIR game, the game is over and EVERYONE lost!

    Probably about time for Mother Earth to rumble, complaint and shake this annoying human species off HER game board.

  3. Kasidie...are these "capita" things, the children or other stuff? LOL

  4. keystone6, didn't know that about the No Child Left Behind fiasco details about forced administrator positions...not surprised, though.

    But you might consider giving LarryVegas, a break.

    His heart is in the right place...with the children's welfare.

    And seriously...there are so MANY political, legal and business smokescreens and distorted mirrors...that nothing short of a magician (with God whispering in his ear) could figure out the latest political scams and ploys to steal more from the working class.

    This roller-coaster ride is nowhere NEAR over...probably just begun.

    So try not to fall for any more political / business weenie tactics to put us at each other's throats, okay?

  5. We are, of course, talking about the general fund, not the districts total fund.

    Since the recession began the general operating fund per pupil has fallen 3.3 percent but the total budget has fallen just 1 percent.

  6. Sorry I had that backwards...

    CCSD's total budget per pupil has fallen 3.31 percent since 2007.

    CCSD's operating fund per pupil has fallen 1.01 percent.

    Labor costs per pupil have actually not had a cut. Interestingly, labor costs per pupil rose slightly faster than the general fund per pupil over the last decade.