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The Clark County School District has a money problem.
The district is facing a budget shortfall of about $60 million and counting.
That means cuts – from faculty, administration and programs. The district's board of trustees has approved sweeping cuts at the last two meetings, and they will likely continue.
The district's Chief Financial Officer Jason Goudie told KNPR's State of Nevada that there are several reasons for the shortfall, including revenue streams that didn't bring in as much money as originally expected.
But of the variety of culprits, Goudie said one of the most impactful was the millions of dollars that district had to pay out to administrators after an arbitrator ruled that the district owed them for backpay and pay increases.
To make matters worse, Goudie explained that the reserve, which is the money the district can set aside for unexpected costs, is set at 2 percent of the district's ending fund balance by the school board, which he said is not enough to cover problems like the arbitration costs.
Plus, that reserve hasn't been at 2 percent since 2009. It is usually at 1 to 1.7 percent.
Besides the decision in arbitration the lack of a reserve for unexpected problems, Goudie said increasing payroll costs, as a percentage of the budget, are outstripping the minimum required funding provided by the state.
“The payroll increases overall have contributed to the overall financial crisis that we’re in,” he said. “In order to fund just basic increases in salary... that takes a huge portion of our plan that’s given to us, which means we, therefore, may not be able to cover just the general costs that we have overall.”
Since the district announced its budget problems many people have asked how it is possible after the Legislature passed a large tax increase in 2015 specifically to pay for education.
Goudie explained that while there is more money in the state's budget for education, the amount of money the state funnels to Clark County isn't bigger.
“So, these tax increases, that go to education, while they do directly go to education, what they don’t do is they don’t necessarily increase the size of the pie," he said, "We still get the amount determined by the state and if they have more taxes from all these sources ultimately the state general fund itself is required to fund less money because the other taxes are essentially covering their portion.”
The state has responded to this accusation by accusing the district of mismanagement.
“I think if you look at the fact that we are one of the – if not the – lowest funded per pupil district in the nation when you look at the top five districts, it is hard to argue that we’re getting adequate funding,” Goudie said.
Goudie said the real solution is looking at the Nevada Plan, which lays out how money is distributed to schools throughout the state.
“You need to look at the overall funding mechanism and how the Nevada Plan works in the state,” he said.
The plan was created in the 60s and now Goudie says there are a lot more children in the state in need of a lot more services that the framers of the plan never anticipated.
“I think we need to take a hard, long look at how all of these different services are funded and where the monies come from and how they’re allocated,” he said.
Jason Goudie, Chief Financial Officer, Clark County School District