Commission keeps seeking to narrow definition of optimal funding

The Nevada Commission on School Funding gradually moves toward defining what “optimal funding” means and asks what it will take to raise the revenue to achieve the intended targets once they’ve been established.

The conversation about the state’s per-pupil funding formula continued at the Oct. 16 meeting with the CSF’s members, who heard a number of updates and presentations from the Nevada Department of Education and consultants from Las Vegas consulting firm Augenblick, Palaich and Associates. The CSF since August has debated the semantics of “optimal” versus “adequate” and what Nevada needs in the next five or 10 years to support different student populations equally whether by district size, geography or other factors.

Chairwoman Karlene McCormick-Lee said for now, the committee keeps receiving direction from San Francisco nonprofit research and development agency WestEd to help answer the basic question, “What does ‘optimal’ mean?”

“Does ‘optimal’ mean the amount that is required to be able to establish and implement the Pupil Centered Funding Plan and make sure it’s implemented the way it was intended to be? Or do we have to get our base funding plan in the top quartile instead of the bottom quarter?” McCormick-Lee said.

The commission submitted its first set of recommendations to Gov. Steve Sisolak in July, then set out to define what “optimal” means just as school districts had finalized their 2020-21 budgets.

Then there’s the question of how to actually achieve that optimal level of funding once it has been truly defined, commission member Andrew Feuling, Carson City School District chief financial officer, states. Feuling said he raised concerns about the use of the word “optimal” at the start of those talks.

“You can’t say you have to raise half a billion dollars or a billion dollars if you don’t know what that level is,” he said. “The word ‘optimal’ is not one we’ve used before. It’s been all about adequacy. It’s in (Senate Bill) 543. I don’t know if any of us know what ‘optimal’ means. Adequacy is a step on the way to optimal.”

Section 9 of SB543 states, “…the Governor shall consider the recommendations of the Commission, as revised by the Legislative Committee on Education, if applicable, for an optimal level of funding for education and may reserve an additional amount of money for transfer to the State Education Fund that the Governor determines to be sufficient…” for funding recommendations or any part of such he or she would deem fit to do so in a proposed executive budget.

Sufficiency is its own challenge without considering COVID-19, but due to the pandemic, districts have had to return certain grants, and that has impacted school budgets, Feuling said.

“Because of some tax revenues coming down, you also had districts in a rush to save money with their larger budget concerns, and districts gave back a lot of grant revenue,” he said. “We (Carson City) gave back $600,000 in grant revenue. Most districts gave back $600,000 to $1 million. It was pretty significant to try to figure out where they stood.”

Special education funding, also originally planned to be included in the Pupil Centered Funding Plan, now seems likely to be removed from the model, Feuling said, at the behest of the Nevada Department of Education. This is due to maintenance of effort requirements that ensure states provide the resources to fund individualized education plans for special education students, McCormick-Lee said.

“You can’t spend less than you have in the past,” she said. “No district or state has option to say, ‘No, we don’t think we’ll fund special ed.’ They are required to meet the IEP of every student … because it’s the right thing to do. And we are going to meet the needs of students with an IEP regardless of whether it costs $30,000 or whatever it is.”

The commission, still moving at its deliberate pace, Feuling said, also continues to work with APA Consulting on the cost study for the Nevada Legislature that determined funding levels and weights to be used in the “Successful Schools” model.

In a presentation on Oct. 16 by Justin Silverstein, co-CEO of APA, in which he outlined the commission’s overall progress to date on the formula adoption, members in the past year have dealt with questions affecting a district’s wealth, adjusting funding by district size, the cost per district by location and certain factors such as nutrition, transportation or other needs, grant programs and student counts. Examining how other states have moved to a per-pupil formula in recent years, Silverstein said the CSF is now in the second phase, or implementation, and this denotes funding targets and actually moving into the funding formula, engaging stakeholders and identifying revenue streams.

“The unknown is all this goes to the Legislature,” Feuling said. “Ultimately, they’re only recommendations, and the Legislature, if they so chose, they could completely change the whole thing. That’s the interesting part of that. They could change any of that language.”

McCormick-Lee said in November, the commission hopes to hear more from public entities on optimal funding, strategies and potential revenue streams and to have more conversation about taxation and monitoring.

“It’s important for us to realize the importance of education in our state and it’s not an easy conversation to have, but we still need to make sure we can move forward in the next 10 years and how to meet the needs of children in the state of Nevada,” McCormick-Lee said.