Schools plan for worst amid failed property tax proposal

Tuesday's failed ballot question added insult to injury for a school district struggling to stay afloat on a dwindling budget.

An annual audit of the Clark County School District's finances was released early Wednesday, hours after 66 percent of county voters rejected a proposed
$669 million property tax increase for school improvements.

Auditors reported that the balance of all district funds shrank by $295 million last school year, marking a 28 percent drop in one fiscal year to a balance of $758 million. Reduced property tax collections, which provide a quarter of the district's annual revenue, and decreased federal funding are to blame, reported CPA Kafoury, Armstrong & Co.

"Voters not approving Question 2 puts us in a very serious situation," said School Board member Carolyn Edwards, emphasizing that the district must consider returning to year-round school schedule in 2013-14 to save money. "This will cost the community."

She said that possibility needs to be discussed within the next two months.

And the district must make contingency plans to close several schools, board member Erin Cranor said. She asked Superintendent Dwight Jones to look into the savings that the closures would generate and options for sending students to different schools, she said.

"It's not nearly as much in savings as people think," replied Jones who anticipated the failure of the proposed tax increase and already had directed staff to start putting together school closure plans. "The voters have spoken. I respect that. We certainly knew it was a difficult ask."

School closures might be a necessity at a couple of dilapidated schools, board members agreed.

If necessary, closures probably would occur at the rundown Bell and Lincoln elementary schools, whose staff members were giddy with excitement just months ago when Jones said they would get new schools if the ballot question passed.

But county voters struck down the proposed six-year property tax increase, which would have raised the rate by about 21 cents per $100 of assessed valuation. The effect would have been $74.20 more in property taxes for the owner of a home assessed at $100,000. And the result would have paid for modernizing 19 school campuses, building four school gyms and two new schools, and upgrading 10 schools' electrical systems.

In the cases of Bell and Lincoln, the district must decide whether to keep pouring money into the half-century-old buildings to keep them operable or close them. Lincoln-Edison Elementary School in North Las Vegas is near Cheyenne Avenue and Civic Center Drive. Bell serves the neighborhoods near Sahara Avenue and Interstate 15.

Without a voter-approved tax increase to fund capital projects, such as new industrial air conditioners and school renovations, the district would have to dip into its general fund, but doing so would be dicey.

"It's important to call attention to the dwindling of this fund," said Jones, who is required to notify the Nevada Department of Taxation because the district's general fund balance has officially decreased for three consecutive years.

The general fund balance decreased 20 percent last school year, from $97 million to $77 million. Again, less property tax revenue is to blame, with pay raises awarded to teachers in arbitration, auditors reported.

To maintain a safety net, the district in the past has set aside at least 2 percent of total revenues in its general fund for unexpected expenses. However, the district has broken its own rule for four years now, setting aside just 1 percent.

That's not because the district is spending more.

The district, fifth-largest in the nation, managed to cut $143 million in expenses last year, reducing its budget to
$2.8 billion. It spent less on teacher supplies and textbooks, reduced interest costs on long-term debt, and cut administrative costs.

"We're at the bottom," Edwards said of funding. "I think that's very, very clear."

A voter-approved property tax increase for six years would have helped, she said.

"But it's only going to get worse," she said. "This will cost the classroom, and it will cost students."

Contact reporter Trevon Milliard at tmilliard@review
journal.com or 702-383-0279.