The $1.1 billion education cut myth

Victor Joecks

Last year, I wrote a commentary called the $3 billion deficit myth. In it, I described how by assuming a $1.5 billion increase in state spending, many ill-informed individuals were overstating Nevada’s budget problems. While many public officials and media members have since gotten Nevada’s budget situation right, some lawmakers are still using the same tactics to inflate Nevada’s budget difficulties.

Nowhere has this been seen more than in the discussion over Nevada’s education budget – especially with the claim that Gov. Sandoval’s budget contains a $1.1 billion spending decrease to education.

Ways & Means Committee Chair, Speaker Pro Tempore Debbie Smith released the following statement after Governor Brian Sandoval vetoed A.B. 568, the K-12 education budget:

“While I fully anticipated this veto, I question how the governor plans to champion economic recovery, end social promotion, and improve our graduation rates while cutting $1.1 billion from our public schools. …

“In his veto statement, the governor mentions only spending the money we have and not allowing for additional funding of education. Let me be clear: A.B. 568 does not contain additional funding, but instead prevents massive cuts to public schools-the largest in our state’s history. …

“We remain firm in our commitment to bring much needed reforms to K-12 and to reject the $1.1 billion cut proposed in the governor’s budget.

This “cutting $1.1 billion from our public schools” claim is false. You can only manipulate your way to this number if you reverse reductions that have already been made and assume spending increases that don’t yet exist.

Here’s what’s actually happening with Nevada’s K-12 education budgets (Pg. 37 on this worksheet):

In Fiscal Year 2010, Nevada spent $2.513 billion through the Distributive School Account (DSA).
In Fiscal Year 2011, Nevada spent $2.504 billion through the DSA.

So Nevada spent a total of $5.017 billion in the last biennium on 849,464 students. That’s $5,906 per student per year. (Don’t confuse this amount with total education spending, which is $9,885 per student. The DSA, which includes some money from local streams, is just the funding level that state government is responsible for.)

For the next two years, Gov. Sandoval has proposed spending the following:

In Fiscal Year 2012, Nevada would spend $2.345 billion through the DSA.
In Fiscal Year 2013, Nevada would spend $2.220 billion through the DSA, plus $161.6 million for Sandoval’s block grant program (details here, pg. 5).
Sandoval also wants to spend $241 million more on K-12 education with the extra money projected by the Economic Forum.

That’s a total of $4.968 billion on 847,652.1 students. That’s $5,861 per student per year.

So Sandoval’s proposal would spend $45 less per student for a total two-year spending reduction of $49 million. In terms of percentages, that’s a .76 percent reduction to state support and less than a half a percent reduction to total education spending.

To compare, AB 568, vetoed by Sandoval yesterday, would have increased education spending by $660 million from the governor’s recommendations. That would have increased education spending to $5.628 billion, which means that Nevada would spend $6,640 per student per year. That means Nevada would have spent $734 more per student each year.

How can Assemblywoman Smith claim that AB 568 doesn’t contain additional spending?

How does a $49 million decrease turn into $1.1 billion?

How does a reduction of less than 1 percent equal “a massive cut” to education?

I think the answer to all those questions rhymes with “Higher, higher ants on tire.”

And what’s a possible reason for this deception? As reported by Jon Ralston last year, here’s what an anonymous businessman said about claiming Nevada has a $3 billion deficit.

But then he [the anonymous businessman] called back almost immediately to make two more points. One was that the budget deficit should be pegged at closer to $3 billion by all the politicians to establish a large enough target for negotiations.

Is Nevada’s current budget debate about the truth? Or is it about manipulating the truth to increase one side’s bargaining power?

For those who repeat the $1.1 billion education cut myth, the answer is clear.

For the majority of Nevada’s citizens, the challenge now is not to be fooled again.