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Democratic lawmakers and analyst Jeremy Aguero explain a bill implementing a new education funding formula on May 13, 2019. Photo by Michelle Rindels.

With three weeks left in the legislative session, Democratic state senators have unveiled a much-anticipated plan to overhaul Nevada’s 52-year-old public education funding formula — a move that the bill’s sponsor says will help Nevada children “stand toe-to-toe with students from any state in the nation.”

The introduction of the legislation marks lawmakers’ most dramatic step yet toward revamping the complicated formula that operates like a seesaw, with state funding to districts decreasing as local funding increases. The existing system has been widely panned as an inadequate model that focuses too much on sparsity vs. density and doesn’t take into account the needs of today’s highly diverse student body.

Members of the Nevada Senate Democratic Caucus outlined the bill on Monday, after it was formally introduced on the Senate floor and dubbed SB543. It’s expected to come up for its first hearing next week before a joint Senate and Assembly budget committee meeting.

“After many years of work, we are so proud to unveil this new plan to modernize and overhaul Nevada’s outdated education funding formula,” said Democratic Sen. Mo Denis, a bill sponsor. “With the input with this implementation of the Nevada State Education Fund, our schools will be better equipped to provide our students with a world-class education that prepares them for 21st century jobs.”

At a press conference, economic analyst Jeremy Aguero, who crafted the bill and has previously worked on other major projects such as designing the Commerce Tax, briefed reporters on its major features.

SB543 would create a Pupil-Centered Funding Plan that sends extra dollars toward students who are learning English as a second language, living in low-income households, have special-education needs or are gifted and talented. Under the existing model, “categorical” grants through programs such as Zoom and Victory schools provide extra funds for entire schools with high English-learner or low-income populations.

The bill would become effective upon passage and approval for purposes of carrying out the transition, but Nevada wouldn’t actually shift to the new funding formula until the 2021-2023 biennium. The funding commission would be tasked with running side-by-side projections of the existing funding formula compared to the new one over the next two years and recommending any changes before the next legislative session.

The legislation proposes creating a State Education Fund, which would replace the existing Distributive School Account and be administered by the state superintendent. Virtually all local and state revenue designated for education now would be directed to the State Education Fund, rather than running through different accounts.

Although it’s set up as a weighted formula that increases the base funding by a multiplier for students in specific need categories, the full transition would require additional money over time. The legislation does not include any additional money to carry out the new weight system, although money now supporting populations with specific needs through “categorical” programs such as Zoom and Victory schools would be redistributed under the formula.

The bill would mandate that weighted funding is distributed directly to schools serving children who qualify for it.

The bill does not establish the numerical weights in statute but instead leaves them up to a new 11-member Commission on School Funding responsible for reviewing several of the different pieces of the funding formula that will go into the final equation, including — notably — the statewide base per pupil amount and the multiplier for each weight.

Commission members would be appointed by the governor and legislative leaders. Four of the members would be chief financial officers from school districts of different sizes.

The commission will also be tasked with establishing so-called “cost adjustment factors” to account for differences in cost of living and labor between counties, an additional bump of funding for “necessarily small schools” and a “small district equity adjustment” for districts in which few students are enrolled. Those additional calculations are aimed at addressing some of the concerns that rural schools will be disproportionately hurt by the new funding formula.

SB543 notes that students only will receive the largest weight for which they qualify. So if a student has a disability and is also an English language learner, he or she would receive the weight that allots more money to their needs. However, students can still benefit from the services and programs in each category for which they qualify, meaning a student assigned a disability weight would still be able to benefit from English language programs.

The bill also prohibits school districts from using the weighted funding for employee salaries or benefits or to settle disputes with labor organizations. Instead, the measure lays out a specific list of possible uses, such as free pre-kindergarten, reading centers and supplemental instruction for at-risk students and English language learners. Those are services found at Zoom and Victory schools. The measure allows schools to use weighted funding for hiring and retaining incentives for educators who provide such services to students in those two categories.

Additionally, the proposed legislation appears to seek increased transparency among districts and schools regarding employee information. Before Oct. 1 of each year, school districts and public schools will be required to report existing personnel and services as well as any changes they anticipate making during the current year. That information would be posted online and given to students’ families.

The Nevada State Education Association was critical of the new formula, saying the legislation was not developed with sufficient input from educators on the ground. The union also criticized the way the new funding formula handles distribution of funds to charter schools and projected that the Charter School Authority would receive an additional $28 million in funds because of the legislation.

“Given all the problems with charter school accountability, this is unacceptable. In the last 20 years, charter schools have grown dramatically to include large numbers of charters that are privately managed, largely unaccountable, and not transparent as to their operations or performance,” the organization said in a statement. “This growth has undermined local public schools and communities without producing any overall increase in student learning and growth.”

Pat Hickey, head of the Charter School Association of Nevada, shot back at that critique.

“Public charter schools with their 50,000+ Nevada students, do get a slice of the pie, but’s it’s currently smaller than their district partners’ portion,” he said. “Why the NSEA wants to throw both the Senate Education Chair (Sen. Mo Denis) and charter schools under the bus is a mystery to many in the building.”

Clark County Superintendent Jesus Jara struck a more optimistic tone, saying the proposed formula “lays the groundwork” for transforming education by simplifying the distribution method, ensuring money intended for public K-12 goes to schools, and factoring in the cost of educating today’s students.

“CCSD strongly supports this plan in concept,” Jara said in a statement. “We look forward to looking at the details to ensure there is sufficient flexibility to address the needs of students in each district.”

Even so, Jara pointed out that the plan doesn’t solve other education problems, including boosting overall funding levels or providing money for promised teacher raises.

Monday marked the public’s first glimpse of the 120-page bill, which Aguero outlined to community, education and business leaders last week in a series of private meetings. The bill has been specially exempted from other legislative deadlines.

The introduction of the bill also comes a day after the Clark County Education Association announced members had authorized a strike for next school year if the legislative session ends without improved funding for public schools. Though SB543 isn’t the vehicle that would increase funding, it plays an important role in the overall education conversation because it would change how money is allocated to school districts.

This story was updated with more reaction at 2:47 p.m. and 4:47 p.m.

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