Jim Clark: Washoe tax hike would bail out dysfunctional school board (opinion)
August 24, 2016
This fall, voters will be asked to approve Washoe County School District (WCSD) Ballot Proposition WC-1. If passed, it will increase our county sales tax to 8.265%, the highest in the State of Nevada.
The purpose of the increase would be to fund school bonds in the amount of $781 million to pay for deferred maintenance in county schools and build 23 new schools to accommodate anticipated enrollment growth.
Nevada law provides that state funding must be the same per student in public or charter schools in every county, currently about $5,900 per student (operating funds).
That money comes from several sources, but a big chunk comes from our real estate taxes. Currently about 21% of our real property taxes go to the Nevada Distributive School Account ("DSA").
Other local funding, dedicated to facilities (capital funds), comes from another portion of our property taxes and is currently about 11% of our tax bill.
How did our schools get in such bad shape? In a few words: too much money in one pot, not enough in the other. Researching for this column, I met with the school district's chief operating officer, Pete Etchart. I told him of a meeting I had some years ago with then Superintendent Jim Hagar who said that Nevada sends DSA money to school districts who then establish a budget.
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The teacher union sees the money and demands that it be spent on teacher costs, salaries and benefits. The district objects, resulting in arbitration, which the union always wins. Therefore, nothing other than local funding is available for maintenance. It simply is not enough.
To make matters worse, our dysfunctional school board has been spending money like drunken sailors settling lawsuits, firing superintendents, hiring superintendents, screwing up the special education program, etc., instead of budgeting to keep taxpayer-funded school buildings in top shape.
How about the 23 new schools WC-1 would pay for? According to WCSD's website, in the 2010 school year, Washoe County enrollment was 62,324. In the 2015 school year, enrollment was 63,670, a net average annual increase of 224 students, or one third of one percent per year.
We read that the north is a hotbed of economic activity and new businesses moving in, but where are the kids? Where is the verifiable justification for funding all these new schools?
How should we vote on WC- 1? First, there is no sunset provision, so when the $781 million in bonds is paid off, the tax and the revenue it produces continue forever.
Do we want to throw more money at the school board and hope they'll do the "right thing?" Second, what will it do to high ticket item retailers (car dealers, Home Depot, Lowes, etc.)? Which of us would not travel to Carson City to save a couple hundred bucks on a diamond ring or Sub-Zero refrigerator?
Finally, is this funding really needed? We have already discussed the enrollment growth rate. How about maintenance and repairs? The Guinn Institute recently published "Nevada School Facilities Construction and Maintenance," in which they noted that a school district industry standard is to budget 3% per annum of building current replacement values ("CRV") for maintenance and repair.
They reported that over a five-year period, WCSD's CRV averaged $2.2 billion; 3% of that figure equals $66 million per year, but WCSD actually spent an average of $52 million, an annual shortfall of $14 million. WCSD's last general fund budget was $647 million which produced a revenue surplus of $28 million. Problem solved.
The remaining issue is how to keep the teacher union from glomming on to all the loose change every year. Nevada law needs to be revised to require allocations from operating funds to capital funds in amounts necessary to keep school properties in good shape.
Tell your legislator.
Jim Clark is president of Republican Advocates. He has served on the Washoe County and Nevada GOP Central Committees. He can be reached at firstname.lastname@example.org.