Education establishment already setting up the next $1.5 billion tax increase

Victor Joecks

Tomorrow, Saturday at 9 a.m., the Assembly is scheduled to have a hearing on the amended AB464, which is Sandoval’s plan to increase the modified business tax and business license fee and create a gross-receipts tax. Citizens wanting to express their outrage that Sandoval would propose a modified version of the just-defeated margin tax can do so on Saturday at the capitol building in Carson City or at the Grant Sawyer Building, 555 East Washington Ave., in downtown Las Vegas.

One of the most inaccurate pieces of spin that will come out during the hearing is that passing Gov. Brian Sandoval’s new spending plan, funded by the largest tax increase in state history, will finally solve Nevada’s education problems and create the “New Nevada.”

Behind the scenes, big business groups that are supporting the gross-receipts tax are pushing a complimentary argument: That the business community would rather have the legislature pass higher taxes, including a gross-receipts tax, than face another initiative petition from the teachers union.

While there is an abundance of evidence that higher spending has never silenced calls for even more education spending, a bill making it’s way through the Legislature shows this is black and white.

SB508, which has already passed the Senate, was heard this morning in the Assembly Ways and Means Committee. The bill calls for increased education spending based on giving English Language Learners, students who qualify for Free and Reduced Lunch and special need students additional funding or weights.

For instance, the average student received $5,676 in funding from the Distributive School Account for the current school year. Under SB508, the goal is to fund an ELL student at 1.5 times the amount of base DSA funding, or $8,514. And that’s just DSA funding, Nevada spends around$4,000 more per-pupil in categorical DSA funding and from local-only taxes and federal funds. 

SB508 directs the Department of Education to consider the recommendations made by the Task Force on K-12 Public Education Funding, which called for weights for ELL and FRL student at 1.5 times the base and for special education students at 2 times the base funding amount.

With 60 percent of Nevada students falling in the ELL or FRL lunch category, according to Nevada Succeeds, that’s a very expensive proposition. If Nevada had implemented this plan for the last biennium, it would have cost state taxpayers an additional $1.5 billion.

Student type

Number of students

Per-pupil funding


Base only








Special ed









Current spending






Special Education







Yearly difference



Biennium difference



That is a low-ball estimate. With an increase in the number of Nevada students and the proposed per-pupil funding increases, those numbers will likely reach $2 billion by 2021, when SB508 calls for the plan to lead to full implementation.

It’s also low, because the multipliers just look at DSA funding. A study on creating a weighted student funding formula by the Lincy Institute recommended that Nevada spend an additional $1.6 billion a year or $3.2 billion for the biennium.

That would be a 50 percent increase in Nevada’s general fund budget.

Sandoval is currently calling for around $720 million in new education funding, but just $25 million is dedicated to this new funding formula.

This means that in 2017, 2019 and 2021, the education establishment will return to the legislature with their hands out, demanding higher taxes for the children.  And if lawmakers don’t provide another $1.5 – $3.2 billion in spending, they’ll threaten to run an initiative petition, and the whole cycle will start all over again.

The only way to stop this crazy cycle is for real reforms, like SB302, which passed the Assembly today and creates a world-class school choice program, to show that increasing student achievement comes from structural reforms, not dumping money into the same broken system. 

Victor Joecks is Executive Vice President at the Nevada Policy Research Institute, a nonpartisan, free market think tank