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November 24, 2014

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State budget windfall could prevent School District layoffs

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Leila Navidi

Teachers walk out of Harney Middle School at 2:41 p.m., the end of their contractual workday, as a protest to education budget cuts Wednesday, April 27, 2011.

Updated Tuesday, May 3, 2011 | 5:54 p.m.

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Economic Forum Chairman John Restrepo speaks during a hearing Monday, May 2, 2011, at the Legislature in Carson City.

The Clark County School District will receive $160 million from the state general fund as a result of revised revenue estimates by the state Economic Forum, potentially preventing the layoff of an estimated 1,800 district employees, said Dale Erquiaga, senior adviser to Gov. Brian Sandoval.

The projected windfall counters a projection delivered earlier Tuesday by Jeff Weiler, the School District’s chief financial officer, who said he expected the district to receive just $60 million in additional general fund dollars as a result of the Forum’s estimates. That amount would not have been enough to prevent the anticipated layoffs.

Erquiaga noted that the additional $160 million, along with Sandoval’s previous call for a 5 percent across-the-board reduction in wage and benefits to all school district employees in the state, as well as the governor’s prior proposal that school district employees pay 25 percent of their retirement costs, would prevent layoffs while maintaining class-size reduction and restoring all-day kindergarten.

Failure to adopt Sandoval’s budget proposals would place the burden of any school district layoffs on local school boards and the teachers' union, Erquiaga noted, issuing a political challenge.

Citing state budget office figures, the governor’s aide noted that the revised revenue forecast by the five-member Economic Forum would generate an estimated $241 million in additional revenues for the state’s public elementary schools, middle schools and high schools, with two-thirds of that total, or the $160 million, going to the Clark County School District.

Another $20 million would be earmarked for the state’s colleges and universities. The remainder of the money, about $13 million, would go toward the state budget’s ending-fund balance.

Nevada’s public school system consumes 40 percent of the general fund budget, while higher education receives 15 percent, according to the state Budget Office.

Sandoval, who is set to appear for a statewide televised speech at 6 p.m. Tuesday, is expected to call for the adoption of “triggers” that would transfer to the state’s school districts additional unexpected revenues generated during the 2011-2013 budget period.

Despite the pessimism of Economic Forum Chairman John Restrepo, Erquiaga said, the expectation of “continued economic growth” increases the likelihood that the triggers will generate additional dollars for Nevada school districts.

Earlier today, the Clark County School District’s Weiler said the estimated 1,800 Clark County School District employees remain targeted for layoffs, despite the state’s slightly improved fortunes. The 37,000-employee district previously had identified about $340 million in cuts prompted by Nevada’s continued economic crisis but had left an additional $60 million in cuts to be determined, hoping that the revenue picture might change.

It did slightly with Monday’s Economic Forum forecast that projected an additional $274 million in tax revenue for the 2011-13 budget period. Weiler said the 309,000-student School District expects to receive about 22 percent of that added revenue, which equates to about $60 million.

The district’s chief financial office said the symmetry between the previously unidentified cuts and the expected windfall were coincidental.

“At best, it seems we hit the bottom,” Weiler said of the Nevada economy. “Obviously, though, things could be better.”

The Economic Forum developed the improved revenue numbers after studying a variety of measurements throughout the state, including casino industry projections, gasoline and gold prices, and forecasts for the state and local employment markets. Panel members believe the economy has bottomed out, but it will be several years before economic activity significantly accelerates in Nevada.

The added $274 million in tax revenue is expected to come from a temporary amnesty to pay back sales taxes owed by companies doing business in the state, record gold prices that have benefited Northern Nevada mining operations, increased clothing and equipment sales linked to the mines, sales tax revenue generated by purchases for a natural gas pipeline under construction in Northern Nevada, and unclaimed personal bank and investment accounts forfeited to the state after they go unclaimed.

“We’re not seeing a fundamental change in the economy,” said Economic Forum Chairman John Restrepo, a Las Vegas-based economic consultant. “None of these things are an indication of a rapidly improving economy in Nevada. It’s troubling. While we had a bit of a spike in 2011, that spike in 2012 and 2013 is unlikely.”

Economic Forum members also considered the effect on Nevada of billionaire Sheldon Adelson’s newest casino in Singapore and the holdings of Adelson, Wynn Resorts and MGM Resorts International and others in Macau. Both markets are generating significantly more gaming revenue than the Las Vegas Strip.

As a result, members of the Economic Forum project that Southern Nevada gaming revenue will continue to decline during the upcoming two-year state budget period, which would place greater financial strain on such tax revenue-dependent entities as the School District and the Nevada System of Higher Education.

UNLV has been targeted for a $47.5 million reduction in state funding during the 2011-13 budget period, or a 27 percent funding reduction. University officials have said the lost revenue would lead to the elimination of 315 jobs, bringing total job cuts to more than 800 during the past two years.

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  1. If all $274 million is going to K-12 education, and we have at least 2/3 of the students here in Clark County, then why is the CCSD only getting 22%? They should be getting almost 70%-- about $190 million. Where's the rest going?

  2. Mr. Zetzman, good catch. The $274 million from last night was adjusted today to $267 million, according to the governor's office. $20 million would go to higher education. The rest to K-12.

  3. We are supposed to be happy with CRUMBS. If you divided one piece of pie into too many parts - soon there is hardly anything to share at all. There are 300,000 students, 18,000 teachers and 18,000 staff affected when the Governor is determined to cut education to pieces in K-12 Clark County Schools. There are a lot of people who need a piece of the pie.

    It wouldn't feel so bad if we didn't have to watch reports of record gold profits - billions each quarter. Gold hauled out of our state. Other states might truly have to cut because they don't have a billion dollar natural resource on hand. It's time for mining to pay its fair share to help pay for the programs that are in jeopardy in our state. That gold belongs to Nevada and shouldn't be given away for free at a time when our kids need it so badly!

  4. With education, it all starts with the decisions that are made at the TOP. The public pays and trusts, SCHOOL ADMINISTRATORS, to carefully weigh the value of the programs that they spend millions of taxpayer on. What was their motivation in hiring teachers two years ago with the TEMPORARY STIMULUS MONEY from the USA government, when they knew that these same teachers would face being laid off when the money ran out?

    Due to Nevada being impacted by "The Wave" of countless immigrants that typically don't read, speak, or write English, there is a huge gap of accountability. Officials can count on these folks being virtually silent about everything being done in government. As we all know, most Americans are too busy, too complacent, too whatever, to be involved in day to day politics. So, runaway spending has occurred without so much as a scream or out cry from the public. We are just as much to blame!

    It is time to say to the school districts that hired teachers on stimulus money that these folks took their chances, got some valueable time in working with students, and, if there's no further funding for them, then bye-bye. Pretty simply. No hard feelings.

    People need to remember that teachers hire unions to represent them, because they are NOT good politicians nor lawyers, nor can they effectively keep up to the ever changing political climate, laws, and policies which virtually require a full-tire job! Teachers want to be in the classroom....teaching and making an honest and fair living. Like you.

  5. I am constantly amazed that the public again is 'led down the garden path' by politicians from both sides of the aisles and cottage industry consultants that "Skools" are not performing well because of teacher's unions and tenure.

    Unions do not hire, do not evaluate nor fund education. If there are many incompetent or "less enthused teachers," that is not the fault of the union. Who hired them? Who supervised them for all these years, and what did the administrators do for these less enthused teachers to make them enthused again?

    It is our State,County,and localschool administrators who use smoke and mirrors to distract the public from their collective ineptness. What? Can you furnish data or documentation for you hypothesis? is what an Administratoror politician would hope you don't have in any public dicussion of educational finances. Experts, consultants and trouble shooters are often paid huge amounts of money because they can save Districts, Cities Skools etc hard earned tax-payer money.

    I wonder what Joe The Plumber and Josphine the Plumber think when they read on?

    Economic Forum Chairman John Restrepo, a Las Vegas-based economic consultant is an adviser who these very same Administrators condoneded payment of tax dollars for his "expertise'' I think it was a History teacher of mine (Tenured and Unionized) who quoted Harry Truman ..The Buck Stops Here... I believe it was another unionized and tenured Economics Teacher who explained that the statement meant somebody always is and has to be held accountable. It is why they get "The Big Bucks"

    It seems to me that the Unions are not to blame for wasting the Giant Dollars, because the Unions do not use taxpayer money to hire incompetent consultants.
    If you want an example of this notion, then THANK a TEACHER (Probably a Unionized Tenured one) that you can read for yourself: MOST POPULAR Item Number '6" in this same edition of the On- Line Las Vegas Sun.

    If any of the recent 'it's the Tenured Teacher's and Unions faults" groupies are too busy to read the entire article, fear not, just read the opening paragraph. "..'.John M. Restrepo, chair of the five-member State Economic Forum, filed for bankruptcy protection in November, citing $905,000 in debt and $360,000....

    I recall that my union-member tenured) English Teacher in Third grade called "The Main Idea." Get It?