Budget ‘bait and switch’ contended

In the past, promises of new schools and better pay for teachers helped persuade Clark County voters to pass ballot measures.

Because of the current budget crisis, some of the money voters intended for education could wind up elsewhere next year, perhaps paying for road repairs . Instead of paying for a teacher's bonus, this same money might also be used to pay for cleaning a school's carpets.

The governor is trying to balance the state budget by "the classic bait and switch scheme," said Joyce Haldeman, the Clark County School District's associate superintendent for government and community relations.

Haldeman opposes efforts by Gov. Brian Sandoval to redirect education funding that voters had supported for specific purposes. For instance, the governor's proposal to redirect district capital reserves to the operating budget violates district pledges from the 1998 bond referendum that the money would be used for school construction.

Lynn Warne, president of the Nevada State Education Association, said another proposal by the governor to use a hotel room tax for the state's general fund would contradict a 2008 ballot advisory question, which stated that the room tax proceeds would be used for teacher salaries and "not be used to replace or supplant any other available funding for schools."

Because of the recession, proceeds from the room tax were not to be set aside for teachers' salaries until 2012.

Since the economy has worsened as 2012 approaches, Sandoval is eyeing this source of revenue, which generated $97.6 million for Nevada during the 2009-10 fiscal year.

"Instead of allowing the room tax revenue to be kept in a separate, supplemental account that could only be used for certain expenses, the governor's budget proposes that the money be used for the overall expenses of state government, including education," said Mary-Sarah Kinner, Sandoval's press secretary.

"This mitigates what would otherwise have been deeper cuts to general education spending," she added.

Sandoval is proposing a $5.8 billion budget over the next two years that is 6.4 percent below the funding levels of 2009-11.

The Clark County School District had counted on proceeds from the 3 percentage point increase in the room tax to generate as much as $35 million in the 2011-12 fiscal year, and $70 million in 2012-13, said the district's Chief Financial Officer Jeff Weiler.

So the $35 million once projected as income for 2011-12 is now counted as a loss for the district. Weiler has estimated next year's overall funding shortfall at $250 million to $275 million, or the equivalent of 3,800 jobs.

Warne, whose organization represents Nevada teachers unions, said Sandoval's proposal goes against the will of voters.

"I think it's unconscionable and flies in the face of the majority of voters in this state," Warne said. "I think he's going to have to answer to them if he's going to take that money from the schools."

In Clark County, the 2008 ballot advisory question passed with 66 percent of the vote. It was enacted into law by the 2009 Legislature with bipartisan support, Warne noted.

The law allowed room taxes in Clark and Washoe counties to be raised by as much as 3 percentage points but not to exceed a tax rate of 13 percent.

Revenue from the room tax was to be used for the hiring and retention of teachers and "student achievement" with discretion given to local school districts on how to spend it.

The room tax deal was a compromise between the Nevada State Education Association and the gaming community, which had opposed the union's ballot initiative to increase the top tax rate on gaming receipts to 9.75 percent from 6.75 percent. It was estimated the gaming tax increase would have brought in $250 million to $400 million a year.

Wynn Resorts, Station Casinos and Harrah's backed the room tax increase, but representatives from these companies did not return calls for comment on what Sandoval is proposing.

Billy Vassiliadis, chief executive of R&R Partners and a lobbyist for the Nevada Resort Association, said casinos "recognize we're in very difficult times. So they understand there are emergency measures being taken to avoid further cuts."

Warne said it is ironic that the governor wants to divert money that could be used to pay for his education reform agenda, such as merit pay for teachers.

But Nevada has a history of reallocating money for education to balance the state's budget, said Haldeman, who added: "I think if all the money that was supposed to go to education actually went there, schools in Nevada would be in much better shape."