Nevada school funding threatened

CARSON CITY " Nevada's public schools could lose hundreds of millions of dollars in federal stimulus money because of rules that tie money for K-12 schools to Nevada's higher education system.

To qualify for about $325 million in "state stabilization funds" for the K-12 and higher education systems, Nevada must allocate at least as much state money for education as it did in 2006.

State lawmakers expect they can meet that requirement for K-12, but not for higher education. That's why Gov. Jim Gibbons has asked the Obama administration to waive the state funding requirement for higher education.

If the request is denied, the university system is not the only one that will lose out, state and federal officials said.

"If one side or the other doesn't clear the bar, there's no money for anybody," said Jim Wells, deputy superintendent of administrative and fiscal services for the Nevada Education Department.

Although Nevada is guaranteed extra federal money for special education programs and students from low-income households under other components of the stimulus plan, the Clark County School District is counting heavily on the state stabilization funding.

The school district has shed $133 million in programs and services, and expects to trim its annual operating budget by $120 million over the next biennium.

As for Nevada's best hope, the federal government said states that have experienced "a precipitous decline in financial resources" can apply for waivers. In March, Gibbons wrote to U.S. Education Secretary Arne Duncan, spelling out Nevada's dire fiscal straits.

But at the time of the governor's letter, the Education Department had not yet finalized the provisions of the waiver. And it turns out meeting those requirements might also be more than Nevada can manage.

To qualify, a state must show that the percentage of its budget that goes to education stays the same for the next two years. Currently K-12 and higher education account for 53 percent of the state's budget. Preliminary estimates show education's share dropping to 50 percent next year. Making up and maintaining the difference, as the waiver would require, could cost "hundreds of millions" over the biennium, Wells said.

Dan Klaich, the Nevada higher education system's executive vice chancellor, said he believes many people are unaware of the potential pitfalls related to the stimulus money.

"People seem to think this is just about higher ed, and it's absolutely not," Klaich said. "Everything that happens with this decision impacts not just higher education, but our partners in K-12."

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Information from: Las Vegas Sun, http://www.lasvegassun.com