CARSON CITY — Although they won’t be using the money anytime soon, Clark County School District representatives testified for a bill Friday that would allow school districts to use some bond reserve funds to build and repair schools.
Associate Superintendent Joyce Haldeman said the district supports Senate Bill 183, although it would be at least five years before it would have sufficient reserves to construct or repair schools.
The bill is opposed by Gov. Brian Sandoval because it would take the same money he wants to use to cover current school operating costs.
He said last week that the proposal, sponsored by Assemblywoman Debbie Smith, D-Sparks, would create a $400 million hole in his budget if it becomes law.
SB183 is one of the key bills prepared by legislative Democrats as part of their move to create additional jobs.
Smith mentioned that she prepared her bill in June, long before Sandoval proposed using the same funds for a different purpose. No vote was taken Friday, although a long line of school officials testified in support.
At one point in the hearing before the Assembly Government Affairs Committee, freshman Assemblyman John Ellison, R-Elko, pointed out the bill would create a huge hole in Sandoval’s budget.
But Chairwoman Marilyn Kirkpatrick, D-North Las Vegas, said the panel was looking at the bill, not the budget itself, which will be considered later in the session.
In testifying for the bill, one school official said having newer schools leads to better performance by students.
"We believe student achievement is tied to the conditions of the facilities they attend," said Dotty Merrill, lobbyist for the Nevada Association of School Boards.
Smith reiterated that voters approved the bonds to construct schools, not to use the funds for other purposes.
"I feel strongly about supporting the will of voters who supported school bond issues," Smith said. "In no way was this an attempt to sideline anything else."
Under the bill, school districts would be required to retain enough money to cover six months’ worth of debt service payments on voter-approved bonds for school construction. Now they must retain one year’s worth of bond payments.
Sandoval contended his proposal would make available more than $400 million this fall to pay operational costs of schools in Clark County. But the school district’s chief financial officer, Jeff Weiler, testified earlier that property tax revenue is dropping and all the reserve money will be needed to make bond payments at least for five years.
He also said the district anticipates paying $551 million in principal and interest on its bond debt this year, while tax revenues are expected to generate $413 million.
Haldeman said Friday that a committee identified the need to spend $4.9 billion on school repairs over the next 10 years.
"That is a staggering amount of money," she said. "We are very much in need of this money."
For the time being, the biggest beneficiary of the reserve funds would be the Washoe County School District. Officials said they can probably free up $70 million in bond reserves for school construction. That construction would generate 500 to 800 jobs.
Smith said 45 percent of school buildings in Washoe County are 40 to 100 years old.
Reporter Jim Haug contributed to this report. Contact Capital Bureau Chief Ed Vogel at email@example.com or 775-687-3901.