SB471 - Revises provisions governing budgeting for public education. (BDR 34-1160)

EXEMPT S.B. 471 - *SB471* SENATE BILL NO. 471–COMMITTEE ON FINANCE (ON BEHALF OF THE OFFICE OF FINANCE IN THE OFFICE OF THE GOVERNOR) MAY 15, 2025 ____________ Referred to Committee on Finance SUMMARY—Revises provisions governing budgeting for public education. (BDR 34-1160) FISCAL NOTE: Effect on Local Government: No. Effect on the State: Executive Budget. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to education; revising the manner in which the Governor is required to prepare the proposed executive budget with respect to the support of the operation of public schools; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law creates the State Education Fund for the purpose of supporting the 1 operation of the public schools in this State and requires that certain tax and fee 2 revenues of the State be deposited in the Fund. In addition to these revenues 3 deposited in the State Education Fund, existing law requires support for the State 4 Education Fund to be provided by direct legislative appropriation from the State 5 General Fund in an amount determined by the Legislature to be sufficient to fund 6 the operation of the public schools in this State for the next ensuing biennium for 7 the population reasonably estimated for that biennium. (NRS 387.1212) 8 Existing law requires the Governor, to the extent practicable, to ensure that in 9 the proposed executive budget an amount of money in the State General Fund is 10 reserved for transfer to the State Education Fund in an amount not less than the 11 amount transferred in the immediately preceding biennium: (1) plus the greater of 12 the increase in revenue collected for general, unrestricted uses as projected by the 13 Economic Forum or the combined rate of inflation and the growth of enrollment in 14 the public schools in this State in the previous biennium; or (2) decreased by an 15 amount not greater than the rate of decrease for the revenue collected by the State 16 as projected by the Economic Forum. (NRS 387.12455) This bill removes the 17 requirement for the Governor to ensure that, under certain circumstances, the 18 proposed executive budget include an increase in the amount of money proposed to 19 be transferred from the State General Fund to the State Education Fund. Instead, 20 – 2 – - *SB471* this bill requires the Governor to ensure that the proposed executive budget 21 includes a total amount of money in the State Education Fund, excluding the 22 Education Stabilization Account, that funds increases in the amount of money in 23 the State Education Fund, excluding the Education Stabilization Account, when 24 such an increase is required. This bill: (1) maintains the requirement that if the 25 Economic Forum projects that revenue collected by the State for general, 26 unrestricted uses will decrease, the amount of money transferred in the proposed 27 executive budget from the State General Fund to the State Education Fund may 28 decrease by not more than the percentage decrease projected by the Economic 29 Forum; and (2) provides that, under such circumstances, the Governor is not 30 required to ensure that the proposed executive budget satisfies requirements for 31 including an increase in the amount of money in the State Education Fund. 32 Existing law requires the Legislature, in funding the public schools in this 33 State, to determine the statewide base per pupil funding amount for each fiscal year 34 of the biennium, which is the amount of money on a per pupil basis determined to 35 be sufficient to fund the costs, with certain exceptions, of all public schools in this 36 State. (NRS 387.1214) Existing law requires the Governor, as part of the proposed 37 executive budget, to include recommendations for the statewide base per pupil 38 funding amount, which must be equal to the statewide base per pupil funding 39 amount for the immediately preceding biennium increased by an amount not less 40 than the combined rate of inflation and the growth of enrollment in the public 41 schools, unless the amount of money contained in the State Education Fund, 42 excluding the Education Stabilization Account, decreases from the immediately 43 preceding biennium, in which event the Governor must recommend a proportional 44 reduction of the statewide base per pupil funding amount. Additionally, the 45 Governor is also required to recommend a proportional reduction of the multiplier 46 for each category of pupil which must not be less than the multiplier for the 47 immediately preceding biennium, unless the amount of money in the State 48 Education Fund, excluding the Education Stabilization Account, decreases or 49 increases in an amount that is insufficient to fund the multiplier for each category 50 of pupils. However, existing law authorizes the Governor to provide 51 recommendations which deviate from these requirements if the Governor 52 determines that it would be impracticable to prepare the proposed executive budget 53 in this manner. (NRS 387.12455) This bill continues the requirement for the 54 Governor to include, as part of the proposed executive budget, a recommendation 55 for the statewide base per pupil funding amount and the multiplier for weighted 56 funding, but eliminates provisions which prescribe how the Governor’s 57 recommendations must be calculated. 58 If the Governor makes recommendations for the funding of public schools 59 which deviate from the prescribed methods for preparing such recommendations, 60 on the basis that using such methods would be impracticable, existing law requires 61 the Governor to make recommendations for legislation to improve the method by 62 which funding for public schools is determined. (NRS 387.12455) This bill 63 eliminates the requirement for the Governor to make this recommendation. 64 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 387.12455 is hereby amended to read as 1 follows: 2 387.12455 1. Except as otherwise provided in subsection [5,] 3 2 or 6, for the purpose of establishing budgetary estimates for 4 – 3 – - *SB471* expenditures and revenues for the State Education Fund as 1 prescribed by the State Budget Act, the Governor shall, to the extent 2 practicable, ensure that [an amount of money in the State General 3 Fund is reserved in] the proposed executive budget [for transfer to] 4 includes an amount of money in the State Education Fund , 5 excluding the Education Stabilization Account, which is sufficient 6 to [fully] fund [: 7 (a) If the Economic Forum projects that the revenue collected by 8 the State for general, unrestricted uses will increase by a rate that is 9 greater than the combined rate of inflation and the growth of 10 enrollment in the public schools in this State in the immediately 11 preceding biennium,] an amount of money in the [State General 12 Fund for transfer to the] State Education Fund for the subsequent 13 biennium which is not less than the amount of money [transferred 14 to] in the State Education Fund [from the State General Fund for] , 15 excluding the Education Stabilization Account, for the 16 immediately preceding biennium increased by [an amount not less 17 than] the lower of: 18 (a) The rate of increase for the revenue collected by the State 19 for general, unrestricted uses as projected by the Economic Forum 20 [.] ; or 21 (b) [If the Economic Forum projects that the revenue collected 22 by the State for general, unrestricted uses will increase by a rate that 23 is not greater than the] The combined rate of inflation and the 24 growth of enrollment in the public schools in this State in the 25 immediately preceding biennium . [, an amount of money in the 26 State General Fund for transfer to the State Education Fund for the 27 subsequent biennium which is not less than the amount of money 28 transferred to the State Education Fund from the State General Fund 29 for the immediately preceding biennium increased by an amount not 30 less than the combined rate of inflation and the growth of enrollment 31 in the public schools in this State. 32 (c) If the Economic Forum projects that the revenue collected by 33 the State for general, unrestricted uses will decrease, an amount of 34 money in the State General Fund for transfer to the State Education 35 Fund for the subsequent biennium which is not less than the amount 36 of money transferred to the State Education Fund from the State 37 General Fund for the immediately preceding biennium decreased by 38 an amount not greater than the rate of decrease for the revenue 39 collected by the State as projected by the Economic Forum.] 40 2. Except as otherwise provided in subsection [5, as] 6, the 41 Governor shall ensure that the amount of money included in the 42 proposed executive budget for transfer from the State General 43 Fund to the State Education Fund is not less than the amount of 44 money appropriated from the State General Fund to the State 45 – 4 – - *SB471* Education Fund for the immediately preceding biennium unless 1 the Economic Forum projects that the revenue collected by the 2 State for general, unrestricted use will decrease. If the Economic 3 Forum projects that the revenue collected by the State for general, 4 unrestricted use will decrease: 5 (a) The amount of any decrease in the amount of money 6 transferred in the proposed executive budget from the State 7 General Fund to the State Education Fund must not exceed the 8 rate of decrease for the revenue collected by the State for general, 9 unrestricted use as projected by the Economic Forum; and 10 (b) The Governor is not required to ensure that the proposed 11 executive budget includes an amount of money in the State 12 Education Fund that complies with the provisions of subsection 1. 13 3. As part of the proposed executive budget, the Governor shall 14 [, to the extent practicable,] include recommendations for [: 15 (a) The] the statewide base per pupil funding amount [, which 16 must be equal to the statewide base per pupil funding amount for the 17 immediately preceding biennium increased by an amount not less 18 than the combined rate of inflation and the growth of enrollment in 19 the public schools in this State unless the amount of money 20 contained in the State Education Fund, excluding the Education 21 Stabilization Account, decreases from the immediately preceding 22 biennium, in which event the Governor must recommend a 23 proportional reduction to both the statewide base per pupil funding 24 amount and the multiplier for each category of pupils pursuant to 25 paragraph (b);] and 26 [(b) The] the multiplier for weighted funding for each category 27 of pupils . [, which must not be less than the multiplier for the 28 immediately preceding biennium unless: 29 (1) The amount of money contained in the State Education 30 Fund, excluding the Education Stabilization Account, decreases 31 from the immediately preceding biennium, in which event the 32 Governor must recommend a proportional reduction to both the 33 statewide base per pupil funding amount pursuant to paragraph (a) 34 and the multiplier for each category of pupils; or 35 (2) The amount of money contained in the State Education 36 Fund, excluding the Education Stabilization Account, increases 37 from the preceding fiscal year but in an amount which, after 38 recommending the statewide base per pupil funding amount 39 pursuant to paragraph (a), is insufficient to fund the multiplier for 40 each category of pupils, in which event the Governor must 41 recommend the remaining money in the State Education Fund, 42 excluding the Education Stabilization Account, be used to provide a 43 multiplier for each category of pupils which is as close as 44 practicable to the multiplier for the preceding fiscal year. 45 – 5 – - *SB471* 3.] 4. When determining the amount of money to [reserve for 1 transfer from the State General Fund to] include in the State 2 Education Fund in the proposed executive budget pursuant to 3 subsection 1, the Governor shall consider the recommendations of 4 the Commission, as revised by the Joint Interim Standing 5 Committee on Education, if applicable, for an optimal level of 6 funding for education and may [reserve] include an additional 7 amount of money [for transfer] to the State Education Fund that the 8 Governor determines to be sufficient to fund any recommendation 9 or any portion of a recommendation that the Governor includes in 10 the proposed executive budget. 11 [4.] 5. As part of the proposed executive budget, the Governor 12 may recommend to the Legislature a revision to any appropriation 13 made by law pursuant to NRS 387.1214, including, without 14 limitation, the statewide base per pupil funding amount, the adjusted 15 base per pupil funding for any school district, the multiplier for 16 weighted funding for any category of pupils or the creation or 17 elimination of a category of pupils to receive additional weighted 18 funding. The Governor may recommend additional funding for any 19 recommendation made pursuant to this subsection. 20 [5.] 6. If the Governor determines that it would be 21 impracticable to prepare the proposed executive budget as described 22 in subsection 1 or 2, the Governor may instead include in the 23 proposed executive budget a recommendation for such funding for 24 the public schools in this State as he or she determines to be 25 appropriate. [If the Governor includes in the proposed executive 26 budget recommendations pursuant to this subsection, the 27 recommendations must be accompanied by such recommendations 28 for legislation as the Governor determines to be appropriate to 29 improve the method by which funding for the public schools in this 30 State is determined. 31 6.] 7. As used in this section, “rate of inflation” means the 32 average percentage of increase or decrease in the Consumer Price 33 Index for All Urban Consumers, West Region (All Items), as 34 published by the United States Department of Labor for the 35 immediately preceding 3 calendar years or, if that index ceases to be 36 published by the United States Department of Labor, the published 37 index that most closely resembles that index, as determined by the 38 Governor. 39 Sec. 2. This act becomes eff [Text truncated for display. Full text available on LegiScan.]