A Nevada district court has ruled that sections of a 2023 bill that essentially forced the Elko County Commission to earmark a portion of property tax proceeds for schools in exchange for funding to build a new Owyhee school are unconstitutional because they single out the county. 

Elko County Manager Amanda Osborne said in a Wednesday statement that the Feb. 7 ruling in Carson City District Court only strikes the sections of AB519 mandating Elko County levy a tax for school facilities, and otherwise doesn’t touch the Nevada Legislature’s $64.5 million appropriation for the construction of a new Owyhee school to replace the run-down original campus on the Duck Valley Indian Reservation near the Idaho-Nevada border.

“Our understanding is that the $64.5 million appropriated by the Legislature for the construction of the new Owyhee Combined School will still be provided to the Elko County School District as planned,” Osborne said. 

The school district recently approved a bid for the school, and expects it to be completed by the 2027-28 school year. 

Read More: After setbacks, plan to replace run-down Owyhee school on reservation moving forward

Osborne added that Elko County commissioners don’t plan to revoke the 20-cent property tax levy that they approved last February to comply with the bill’s mandate, or oppose the funding that’s been collected to date. 

Assm. Daniele Monroe-Moreno (D-North Las Vegas), who spearheaded the 2023 bill, and the legal division of the Legislative Counsel Bureau, which represents the Legislature in the case, declined to comment on the ruling. John Sadler, a spokesman for Nevada Attorney General Aaron Ford, said the office is analyzing the decision and considering potential next steps. 

In addition to the appropriation, AB519 in effect directs Elko County to levy a property tax of between 1 cent and 25 cents per $100 in assessed valuation, which could go above the county’s existing property tax rate of $3.66 per $100. 

Alternatively, the county could reallocate a part of its current proceeds and dedicate that amount to the school district’s capital fund. 

The bill gave the county until June 30, 2024, to levy a tax for school. If it didn’t meet the deadline, the bill would have automatically triggered a property tax hike of 25 cents per $100 of assessed valuation onto the county for school infrastructure. 

The bill also allowed, but did not require, other rural counties with populations less than 100,000 to raise property taxes by a similar amount to assist in funding capital projects, including for “schools located on qualified tribal land.” 

Although Elko County begrudgingly opted to redirect a portion of the 50 cents it levies for community projects and wildfire protection toward the school district’s capital fund, it filed a lawsuit last February to challenge those sections of the bill. 

The county argued in a legal filing last year that these sections violate a Nevada Constitution provision that prohibits local or special laws "[f]or the assessment and collection of taxes for state, county, and township purposes” and is problematic because it only applies to Elko County, even though other districts are struggling to raise funds for school construction. 

Attorneys with the Legislative Counsel Bureau said in a May 31 response that the court has long approved the use of a population criterion to specify what counties a law targets and require that certain local governments impose a local tax in order to finance local capital projects and services, such as police departments and airports. 

But the court ruling last week stated the bill’s language clearly intended to single out the county by referring to it by a narrow population criterion — “a county whose population is 52,500 or more and less than 57,500.” The order notes no other cases in Nevada have been found upholding a population limit as narrow as 5,000 people in the middle of a range of about 10,000 in population. 

The court also noted that if another county were to enter this population range in the future, they wouldn’t be able to meet the June 2024 deadline to avoid triggering the automatic 25-cent tax levy built into the bill, meaning they “will be subject to the mandate in Section 8 to adopt the highest tax rate for no explained reason.”

“The narrow population classification and the singling-out by-date are not rationally related to the subject matter and appear to create an improper odious or absurd distinction,” Judge Kristin Luis’ order stated.

Eko County School District Superintendent Clayton Anderson said Thursday that he’s grateful for the county’s commitment to continue supporting the district. The funding issue arose after Elko County voters in 2020 and 2021 denied renewing a 75-cent property tax measure for district construction projects known as “Pay-As-You-Go” and also rejected a ballot question that would have allowed the district to take out $150 million in general obligation bonds to pay for projects such as a new Elko elementary school.

Anderson told lawmakers in December that the district is set to receive an estimated $5 million from the 20-cent earmark in July. Although those additional funds will help, it’s still not enough to cover all of the district’s facilities’ needs. Spring Creek High School alone is in need of mechanical upgrades estimated to cost $10 million. 

“It’s just not sustainable to do things this way,” Anderson said.