The governor's office said Wednesday they are expecting the Economic Forum to leave them with a revenue shortfall of up to $400 million.
The forum meets Jan. 22 to review state revenues, which have been lagging behind projections since the Legislature adjourned in June. The forum, composed of financial professionals from private industry, has been asked to re-project major state revenues for the remainder of this biennium so that Gov. Jim Gibbons and lawmakers know how much they must revise the current budget.
Deputy Chief of Staff Stacy Woodbury told the legislative committee on education the budget office found revenues some $72 million short after just the first quarter of this fiscal year.
When asked how much will have to be cut from public school budgets, Woodbury said that hasn't been determined.
But across the board, she said, "the hole is probably going to be $350 to $400 million." And since K-12 and higher education together make up 54 percent of the General Fund budget, she said education can't be spared entirely.
Gibbons has proposed a number of legal changes to accompany the promised budget cuts including elimination of mandates implementing class size reduction and full day kindergarten among others.
Several lawmakers raised questions about the lack of detail in her presentation to the committee and what some saw as backtracking on the original proposal issued last week. That proposal indicated the state could save up to $127 million by simply eliminating the class size reduction requirements.
But Woodbury said Wednesday the reduction would be much smaller, that much of the money would be put back into the basic per pupil support with school districts given authority to decide how to spend it.
But she said school districts will definitely get less money overall.
Asked how that would impact federal stimulus rules requiring the state not reduce the percentage of total state funding going to education, she said that won't happen.
"It's certainly not the governor's proposal to do anything to endanger ARRA funds," she said.
"Wouldn't it have been better to flesh out these things before bringing the proposal forward and upsetting a lot of people?" asked Assemblywoman April Mastroluca, D-Las Vegas.
Woodbury said Gibbons and his staff believe it is necessary to put the plan out for all to discuss.
"We feel now is the time," she said.
She said staff is still working on the details but that the governor isn't proposing wholesale revision of the state's long-standing formula for funding public schools.
Deputy Chief of Staff Lynn Hettrick emphasized the proposal doesn't eliminate class size reduction and full day kindergarten funding, only the mandates requiring them. He said the governor's plan is designed to lift state controls from the districts and give them the power to make those decisions.
"If they can find the money, they can fund those programs," he said.
"So the distributive school account may go up but, overall, education dollars would be cut," said Assemblywoman Marilyn Dondero-Loop, D-Las Vegas. "You're not talking about putting more money into the school districts?"
Hettrick confirmed that outside the meeting: "We are going to be forced to reduce some funding to education. Does that mean they're going to have to take that money out of something else? Yes."
Lynne Warne, head of the Nevada State Education Association, said the teachers agree with giving districts more control over their budgets but said it's hard to comment on the plan when they haven't seen the details. Eliminating class size reduction funding, she said, means more than 2,100 teachers would be laid off statewide, which would hurt the students now benefiting from small first, second and third grade classes.
"We don't see how the governor's proposal works for them," she said. "It works against them."
Joyce Haldeman of Clark County School District questioned the proposal to issue parents vouchers so they could decide where to place their children. She said in Clark County, private schools can only handle about 3,000 students "and some of them have waiting lists already."
Senate Minority Leader Bill Raggio, R-Reno, questioned whether some of the proposed changes might run afoul of the federal No Child Left Behind act. He also expressed concerns over changing the Nevada Plan, the basic per pupil funding formula, saying that could wind bring a court challenge resulting in a judge taking control of Nevada's school funding.
Hettrick and Woodbury said after the meeting more details of the plan will be forthcoming and that they welcomed the input from others including Assembly Speaker Barbara Buckley, D-Las Vegas.