Critical Mass: Why a Stadium Could Never Build a School

football field
Photo: Giovanni Arteaga/Flickr

As many Nevadans watched, our legislators went into special session over a football stadium and our governor signed the bill to approve a hotel room tax to build it. Washoe County residents will be voting on a own sales tax increase Nov. 7. The lines easily blur when we think the governor should put that football stadium money into building and repairing our schools. What many residents don’t know is even if he wanted to, he couldn’t.

It’s not that the state doesn’t have the money or couldn’t generate it. Obviously, they have decided they have millions for a football stadium. Right?

Wrong. It’s been repeatedly pointed out in my past articles, how Washoe funds our own capital projects isn’t simple. A series of Nevada Revised Statutes (laws) govern every aspect of our funding, most especially NRS 387.328 which establishes by law that each county funds their own school buildings and repairs. They establish that it is separate from all other funds and budgets.

The state isn’t paying for us.

Per the NRS all counties get their primary funding locally from property taxes. Some counties get more from them based on population, as outlined in the NRS. Some counties have established new laws that apply to them, like Clark, where additional funding comes from other sources such as room taxes or impact fees.

Washoe County does not have such a law, yet.

nevada legislature buildingWC1 will establish a law creating a permanent and legal funding source for ONLY Washoe to build and repair schools. Other laws govern other funds like those used to pay teacher and administrator salaries. The same applies to money in the state coffers. The laws don’t let those funds mix. The state has laws governing “state money”. It is hard to keep up with the “red tape” but red tape is born when the public demands more “oversight” of public funds and accountability. Every action has a reaction.

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It’s difficult to break it all down in one article or even the 12 this series will complete with. But the basic concept remains: state law dictates the money. In our case and in the simplest explanation, we pay our own way and we do it the way we are told we have to. We can’t use stadium money. We can’t use administrator salary money. We can’t create a new funding source without voting and we can’t vote on it until the legislature says we can.

We generate our own funds, we do it within the rules we have, and we spend it the way we are told.

We can be mad that our state leaders want to spend a ton of money on a football field. We can’t use it as an excuse to hurt ourselves though. We have the chance to take control of our funding situation with the passage of WC1 once and for all. It won’t stop a stadium but it will give us control over our own problems. Let’s not allow the state to take this away from us too.

Critical Mass is a series that addresses questions, myths, misinformation, state statutes, the school district and the 2016 bond initiative that will appear on the November 2016 ballot. Read the complete series.

CORRECTION: This article previously indicated that the special session was for a sales tax increase. The tax was actually a room tax.

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About Michelle Beck 12 Articles
Michelle is a native Nevadan that grew up in Reno and has lived in Sparks for the last 20 years. She has 10 years experience as a volunteer and leader with several children's and parental organizations, four years on the Nevada State PTA executive board and two years as a member of the WCSD Parent Involvement Council. She has written articles for state and national PTA as well as two local magazines. She now runs a home business, fundraises for local charities, is a cheer mom and mother of a soon to be freshman at UNLV.

3 Comments

  1. On the contrary, you need to think of the stadium project as “other people’s money”:

    1. This is a Clark County issue and not a Washoe County issue
    2. We recently passed a $1.1 billion tax bill to help schools statewide and WC 1 will fix Washoe schools, if it passes
    3. The billionaires are putting up $1.15 billion in cash for the stadium
    4. Neither Clark Co. nor the state will come up with any existing cash. The $750 million dollars is generated totally from future room taxes.
    5. Incremental room taxes at a 0.88% increase in Clark Co. will pay for the county’s obligation
    6. Incremental is the key word. Without the stadium, there would not be incremental room taxes with which to spend. The project creates more room taxes from tourists with which to pay the bonds. In fact the coverage ratio is forecast to be 1.5 times the bond payments, leaving room for downside error
    7. There is risk that room taxes will not increase. However, the LV casinos and LV convention authority are arguably the best event marketers in the world. With $650 million invested, Adelson will be personally motivated to market this product. As an example, the South Point Casino’s equestrian center is one of the busiest in the world. The only days that the equestrian center is closed is Christmas Eve and Day. Every other day the center is hosting, setting up or tearing down an event.
    8. The $35 million in additional taxes forecast for Clark County does not include the $17 million in excess room taxes beyond the requirements for bond payments.
    9. $420 million in economic activity, nearly 6,000 jobs, a total of $85 million in new tax revenue (includes $33 million to pay bonds)
    10. If you were to not do this project and raise the room tax rate by .88% for other purposes—a. it would be politically impossible b. the room taxes would not be incremental c. the room tax revenues without the stimulus of the stadium would not be as forecast
    11. Say the room tax without the stadium stimulus would generate $25 million annually for the Clark County School’s budget. That is an increase over their current budget of $3.8 billion of less than one percent (.658%). Not a game changer.
    12. People say that the $750 million should be spent on more important needs—there is no $750 million except as a result of the stadium project. Bond buyers would not loan $750 million unless there was incremental revenue being generated by some economic activity.

    Every time that someone hands me $1.15 billion for a project that requires no money down on my part and has a coverage ratio of 1.5 for my risk on borrowed funds; produces an annual 56% return on economic activity; produces an annual 11.3% return in taxes; creates 6,000 jobs; builds my brand and gives me national exposure; I should hold a special session, jump through a hoop and genuflect! Every time. As a businessman, a scenario such as this would be a no-brainer.
    God bless other people’s money!

  2. Even if the “monies” can’t be used for schools, it will be a burden to Clark County Schools when workers and their families relocate to the area. Schools seem to take a back seat when we invite “growth” to our state.

    • While that may be true Janet, our focus here in Washoe County and this article is not whether the stadium should or should not have been approved nor it’s impact on Clark.

      Critical Mass is a series of articles addressing the questions, myths, misinformation and state statutes that surround the issue of funding Washoe County’s school buildings and repairs.

      Clark County has five funding sources for capital projects where Washoe County currently has one.

      We are the only county in the state with one funding source.

      Residents of Washoe County wrongly believe that the state funds our buildings and the expense of the stadium merely demonstrates the perpetuation of the myth. The primary focus of this article is that myth which is currently on the minds of Washoe County voters as we near the hour of casting our votes. We are either changing our overcrowding situation permanently and positively or facing the very real probability of double sessions across our county.

      I wish you luck in your own battle for Clark County students and schools but let’s not lose our focus here.

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