Windfall for schools in doubt

CARSON CITY — Lawmakers said Wednesday new legislation revising tax breaks on "green" construction projects has generated some "green" in the form of cash for bigger teacher raises.

Senate Minority Leader Dina Titus said an unexpected $12 million windfall in sales tax revenue to the public schools will allow an increase in teacher pay in the first year of the budget to cover increases in retirement contributions.

But there was word later in the day that the $12 million could be in doubt. The new green legislation, which could be heard by the full Senate today, might end up cutting out the $12 million lawmakers thought they would receive.

A lawmaker who commented on condition of anonymity said Senate Bill 621 enacting the new, lower tax breaks is expected to include a new amendment to protect the state against any legal liability that also would have the effect of negating the $12 million windfall.

In an effort to save face, a mechanism creating a "trigger" to provide the extra salary money might be proposed, but it will use unrealistic revenue goals that are not likely to be met, the lawmaker said.

Before doubts arose about the $12 million, lawmakers had agreed to use the money to increase teacher salaries. Teacher raises in the first year would hit closer to 2.375 percent instead of 2 percent and would come close to paying the increased share of retirement contributions that will start July 1. Without the bump, teacher salaries would increase 1.625 percent when the retirement contributions were factored in.

The money was expected to flow to the schools budget because one of the projects originally thought to be included in the sales tax exemption for green building construction, the Fontainebleau on the Strip, was not expected to qualify for the benefit under the green measure on its way to approval this session.

The revised green construction legislation takes away the sales tax benefit for all but a few projects.

The Fontainebleau originally was thought to be one of those that would continue to receive the exemption. But Titus said legislative staff members have determined that the project will not be eligible. As a result, sales taxes that would not have been collected on the project will flow to the schools, she said.

But that could now be in doubt as the Legislature seeks to protect itself from lawsuits.

Representatives of the Fontainebleau project could not be reached Wednesday for comment on the status of their project.

Senate Democrats proposed using the newfound money for teacher raises, and Republicans bought into the idea, said Titus, D-Las Vegas.

The additional money for teachers would make the proposed public schools funding measure, expected to be introduced in the Assembly today, much more palatable to Senate Democrats, who Tuesday balked at the education funding deal.

"Senate Democrats now feel good about not signing off on the deal (on Tuesday)," Titus said. "We kept saying we should look for more money for public education."

Assembly Speaker Barbara Buckley, D-Las Vegas, also welcomed the new funding and the support of Senate Republicans to use it for teacher raises. The process of implementing the small pay increase still is being worked out but probably would involve the use of a "trigger" mechanism as the sales tax money flows into the public schools budget, she said. Separate legislation might be used to implement the procedure, Buckley said.

Sen. Bob Beers, R-Las Vegas, who mentioned Tuesday that the increase was something he had sought instead of expanding all-day kindergarten, said he would support the use of the funds for the teacher pay increase.

But he said $12 million isn’t enough to get all of the way to a 0.375 percentage point increase. That would have taken about $17 million, Beers said.

The new green construction measure eliminates the sales tax break for all but a few projects. It passed the Senate Commerce and Labor Committee on Tuesday. It already has passed the Assembly.

Buckley said it was Beers’ comment about the idea of increasing teacher salaries that prompted the proposal from Democrats once the new revenue was identified by staff.

"Since we’ve been arguing for more money for teacher salaries, we let him know, ‘Hey, we just heard you are supporting this so we found you the money. Are you willing to go,’ and he said yes," Buckley said.

Terry Hickman, executive director of the Nevada State Education Association, praised the efforts of lawmakers to find more money for public education and teacher raises but also criticized Gov. Jim Gibbons for failing to show leadership on education spending.

"There was a lot of talk about education, but it wasn’t the governor who found this money, it wasn’t the governor who made education first," he said. "It was the people in the Legislature who were concerned about education."

Gibbons put the Education First measure on the ballot, and it was approved by voters. It requires the Legislature to approve a spending plan for education before it can approve spending on other programs.

Hickman said Gibbons used the measure to run for governor but didn’t follow through, instead threatening to veto a public education budget if lawmakers did not include his proposal to keep the modified business tax at 0.63 percent.

"This governor put business first, his friends first and education last," he said.

Hickman estimated the cost of paying the retirement increase for teachers at about $13 million, lower than other estimates.

Brent Boynton, communications director for Gibbons, countered that the governor has demonstrated in the budget that education is his priority. There is an 18 percent increase in spending on public education and a 16 percent increase for higher education, he said.

"Plus, there is the empowerment program he has embraced as an innovative new direction for education," Boynton said.

The retirement contribution for teachers will increase by 0.75 percentage points on July 1 to 20.5 percent. Teachers pay half of the total and half of the increase.

Lawmakers also resolved one other minor dispute involving the public and higher education deal announced Tuesday by legislative leaders and Gibbons.

Democrats thought the deal included $7 million in new money for career and technical education, while Republicans thought the deal was for $5 million. They split the difference and agreed on $6 million.

Overall, the deal will add $63 million in new spending to the two-year, $2.3 billion education budget.

The deal, which proposes no new taxes, includes expanding all-day kindergarten to 63 new schools at a cost of $15 million. The program is in 114 schools. Much of the expansion would come in the second year of the budget. Democrats had wanted full-day kindergarten in all 340 schools with kindergartens statewide.

The budget agreement also includes almost $10 million for an empowerment program at 29 additional schools statewide, at a cost of $400 per pupil, a program sought by Gibbons.

The governor had asked for $60 million to implement the program in 100 schools at $550 per student.

The bill detailing the public schools budget is expected to be introduced today in the Assembly.