weather icon Clear

Double standard?

They say America is a government of laws, and not of men, but it’s always interesting when a particular political party sees things differently depending on who is proposing a particular idea.

Take Gov. Brian Sandoval’s budget plan. As part of his plan to balance the state budget (while spending more than the Economic Forum says Nevada will take in via taxes during the next two years), Sandoval wants local school districts to use bond reserve money.

Bond reserve accounts are used to repay principal and interest on bonds voters approved to build new schools and fix up older ones. According to Sandoval, the law currently requires too much money to be held in reserve, money that should be used in a down economy to pay for school operations. And since the state is obligated to pay for schools, the general fund stands to save $425 million if local districts dip into bond reserve funds.

But state Sen. Steven Horsford, the top Democrat in the upper house, says the plan doesn’t pencil out.

He says the money should be used only to repay debt — which is what current state law says. And he says using the money could weaken confidence in school district bonds — and maybe even leave the district short of money to pay for the bonds, in which case, the districts might have to seek a property tax increase.

“The governor is proposing a property tax increase on the Clark County voters,” Horsford said last week. “That’s a major hole (in the budget). And it’s a tax increase, too.”

Former Clark County budget chief Guy Hobbs, now a government finance consultant, says things depend mainly on how long the economy continues to stumble.

If property and other taxes that fund the district keep lagging, the district’s reserve fund could run short.

So it seems the battle lines are drawn, the Democratic Senate leader on one side, the Republican governor on the other.

Then there’s Assemblywoman Debbie Smith, D-Sparks, who’s introduced Assembly Bill 183, an idea she first conceived in June that proposes to lower the amount of money school districts are required to hold in reserve. That is, of course, what Sandoval proposes to do.

Smith says there are key differences, however: She wants the money to go toward repairing older schools, the purpose for which the bonds were sold in the first place. And she’d let school districts use only that money they deem financially prudent. Under Sandoval’s plan, the entire $425 million would be used for operations, at which point it’s gone for good.

Sandoval’s Deputy Chief of Staff Dale Erquiaga says AB183 shows that both sides agree the money doesn’t have to be limited to debt service. Now, he said, they’re just arguing over how, not whether, the money should otherwise be used.

“We think Assemblywoman Smith’s bill validates our approach,” he says. “It does exactly the same thing.”

Smith strongly disagrees, noting that under her plan, far less money would be used, and for a more appropriate purpose. In testimony Friday, school district officials from around the state supported Smith’s bill, although Clark County officials said they wouldn’t be able to use the money right away because of their concerns about depressed tax revenue.

So what does Horsford have to say about Smith’s idea? That it’s the wrong approach? That the money should only be used for debt service? That approving AB183 will result in a loss of investor confidence in school bonds and, in the worst-case scenario, in a property tax increase?

Actually, Horsford didn’t return calls for comment. If he had, I’d have asked him if it’s wrong and bad policy for Sandoval to use bond reserve money to pay for school operations, then isn’t it also wrong to use the money for any other reason?


Steve Sebelius is a Review-Journal political columnist. His column appears Sunday, Tuesday, Wednesday and Friday. Reach him at 387-5276 or SSebelius@ reviewjournal.com.

Don't miss the big stories. Like us on Facebook.
STEVE SEBELIUS: No substitute for experience

State lawmakers should consider setting standards of experience for big-county school board trustees.

STEVE SEBELIUS: John Vellardita can’t lose

The head of the Clark County Education Association played the petition game perfectly over the last two years, and now is in a position to get even more than he asked for.