That old Trojan Horse

Patrick Gibbons

Nevada faces a steadily worsening economy, thanks in no small part to poor federal regulatory policies that are driving up inflation and destroying the value of the American dollar. This problem exacerbates Nevada's already massive budgetary shortfall, which will continue to worsen as the dollar continues to weaken.

The shortfall is expected to lead to cuts to the general fund of 14 percent or more, leaving many big-government supporters and bureaucrats scrambling to advocate for tax increases – or "tax restructuring," as it is spun by the big spenders.

Nevada's revenue problem provides the occasion for a series of town-hall forums hosted by Assembly Speaker Barbara Buckley, as well as a ballot advisory question seeking to increase the room tax. Both proclaim the goal of raising funds for education.

And so, the venerable Trojan Horse of big government spending has been wheeled to the gates, as shouts of "It's for the children!" echo from inside.

To further its cause, the Big Education crowd treats us to the claim that Nevada's per-pupil education expenditures rank 49th in the nation. The continued repetition of this statistic misleads Nevada's residents into believing that low per-pupil spending levels lead to lower-quality education, even though the vast majority of research shows there is no correlation between spending and education quality – a fact that is no surprise to those paying attention, who know Nevada's per-pupil funding has tripled since 1960.

While mostly useless, education spending rankings are often distorted. Based on data from the U.S. Census Bureau, Nevada's per-pupil spending actually ranks 43rd in the nation, not 49th. This ranking is based on what is known as "current spending," which represents "in classroom" spending.

When one includes capital expenditures and school debt, however, Nevada's ranking jumps to 31st.

And when one looks at education funding from the perspective of the taxpayer, our ranking goes up even further:  Nevada's education funding per resident ranks 26th in the nation.

Nevada's education system is not under-funded.  Neither is Nevada's government.  In terms of government revenue per resident, Nevada ranks 25th in the nation. Calls to raise (or "restructure") taxes and to spend more money on education are based on false assumptions.

The reason Nevada's in-classroom funding ranks so low is that the Nevada Legislature consistently has prevented cost-effective and quality-enhancing measures such as tax scholarship programs, school vouchers and charter schools.

Instead of allowing the private sector to meet Nevada's rapidly rising demand for educational improvement, the state has dedicated billions of dollars to physically constructing public schools.

Nevada's K-12 capital outlays and debt are so massive that the state sits atop national rankings in multiple categories:

  • Third in construction costs per student,
  • Third in debt per student,
  • Second in interest payments on debt per student, and
  • First in debt-to-expenditure ratio (Nevada's education debt is 121 percent of its total education expenditures).

While Nevada's exalted educrats have claimed to be overwhelmed by having to regulate the state's 22 charter schools, Arizona, the second-fastest-growing state in the country, is able to manage nearly 500 charter schools with a staff of only nine. Arizona's more innovative, choice-based approach to education – which also includes tax tuition, disability and foster-care tax scholarship programs – has enabled it to keep capital outlays considerably lower than Nevada's by shifting those costs to the private sector, which builds charter and private schools to meet demand.  

If Nevada had followed a similar path, we could have been saving as much as $320 million a year in construction costs – an amount that nearly cuts the FY 2008-09 budget shortfall in half.

Spending more money within the same old educational framework will only result in the same old poor performance.  The only difference is that taxpayers will simply have even less money.

So Nevadans ought to be skeptical the next time they hear the words "raise taxes" and "for the children" in the same sentence.  Unless and until Nevada's government starts expanding school choice and implementing real education reform, taxpayers ought to see this Trojan Horse for what is.

Patrick R. Gibbons is a researcher at the Nevada Policy Research Institute.