Treasurer gets tough questions on vouchers
February 24, 2017
With the school vouchers program effectively dead in the water, the treasurer's office ran into some tough questions Tuesday over the efforts to jump start the program.
Vouchers were blocked last year by a Nevada Supreme Court decision that ruled unconstitutional the method used to fund them. The court ruled it wasn't proper to take that funding out of the K-12 schools budget.
Bills are being drafted to fix that issue by providing a separate funding stream for the so-called Educational Savings Accounts and the governor has included $60 million to pay for the vouchers over the coming two years in his budget.
But a number of Democrats including Senate Majority Leader Aaron Ford of Las Vegas have said the program is going nowhere.
The first issue raised was, without a vouchers program to generate fees for the treasurer's office, how are they going to pay back the loan?
"We've loaned you so much money," said Ways and Means Chairman Maggie Carlton, D-Las Vegas.
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That includes $244,000 to set up programming, outreach and staff for the program and the $544,000 it cost the state to hire outside counsel to defend the constitutionality of the program.
Treasurer Dan Schwartz defended the loan.
"Had we not borrowed this money from you and had certain things happen, we would have been criticized for not being prepared for what is a very large program."
Carlton and Speaker Jason Frierson, D-Las Vegas, questioned the fact the money to pay back the Legislative Contingency Fund was built into Schwartz's budget.
"By putting it in the budget, it's like taking money out of my left pocket and putting it in my right pocket," Frierson said.
In addition, the proposed budget includes funding for four staff members to operate the program in the event it moves forward during the Legislature.
Frierson also questioned the fact even after district court issued an injunction stopping the program from moving forward, the Treasurer's office continued to spend that money to advance the vouchers program and encourage parents to sign up.
"There was an injunction and work continued after the injunction," he said.
"When we first came to IFC (the legislative Interim Finance Committee) there was not an injunction on the program," said Treasurer's Chief of Staff Grant Hewitt.
Gov. Brian Sandoval's Finance Director Jim Wells told the panel the loans were intended to be paid back from the 3 percent administrative fee the treasurer is entitled to collect from the voucher checks awarded to parents.
But committee members said if there's no vouchers program, then there are no administrative fees to pay the money back.
Frierson said it would be simpler and cleaner to simply pass a resolution forgiving the debt.
Assemblyman Mike Sprinkle, D-Sparks, asked how the governor arrived at the $60 million figure and Wells said it was a best estimate based on 4,000 participants the first year and 6,000 the second.
Sprinkle said since there are nearly 9,000 applications for the $5,100 a year checks, that amount would be inadequate. Schwartz agreed adding the program will expand if and when lawmakers approve a new version of the ESA program.
"Once the Legislature approves the ESAs, the flood gates will open," he said.
Sprinkle asked who would decide who gets a check and who doesn't and how that would be decided.
Hewitt said under existing law, the treasurer's office would make those decisions but Wells said those issues would be handled in a bill currently being drafted to implement the program.