Democrats split with Sandoval, want school bond money to build, repair schools

CARSON CITY -- Democratic leaders put themselves on a collision course with Gov. Brian Sandoval on Tuesday when they announced a plan to use so-called excess school bond reserves to construct and repair schools.

Assembly Ways and Means Chairman Debbie Smith, D-Sparks, said their plan would free up $80 million for construction and repairs of Washoe County schools. It would not immediately free up any money for school construction in Clark County because of declining property values, she said.

The bond revenue reserve funds come from property taxes assessed on past voter-approved bonds for school construction.

Once property values start rising in Clark County, the funds would be available for building and repairing schools there, she said.

The Democrats' plan conflicts with what Sandoval proposes to do with bond reserve funds.

In his proposed, two-year budget, he wants to use $425 million in such bond reserves to cover the operating costs of schools, particularly those in Clark County.

At a news conference, Smith said she opposes the governor's idea and instead wants to use the money as voters intended, that being to repair and construct schools.

"We need to fix up older schools," said Smith, advising people to visit schools in Reno and Sparks and see for themselves.

But Mary-Sarah Kinner, Sandoval's spokeswoman, said the plan would create a major hole in the governor's proposed budget.

"It would appear that the plan released this morning leaves a $400 million hole in the state budget, taking additional money out of the classroom and teacher salaries," she said.

"In these difficult economic times, the reserve funds proposed to be redirected for construction under this plan should instead be spent helping school districts focus on their central mission of educating students."

Under current laws, schools must retain enough reserve money to cover payments on outstanding bonds for at least one year. Both Sandoval and Democrats want to reduce that requirement to six months.

No Republicans attended the news conference, but Senate Minority Leader Mike McGinness, R-Fallon, said later it was hard to comment on the Democrats' plan without first seeing a bill. He said Sandoval's plan for the bond revenues is "something we can live with; it is a unique way to fund education."

In a Jan. 25 pre-session hearing led by Smith, Clark County officials said they could not support Sandoval's plan to divert bond reserves to school operating costs because it would not leave them with enough money to pay their bond debts.

District Chief Financial Officer Jeff Weiler said there is "just barely enough to cover us through the next five years" because school construction bonds are paid by property taxes, and the county's property values are dropping.

Total county property values are expected to drop more than 10 percent in this year alone, Weiler said.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.