Nevada education officials defend pupil-centered funding plan as districts seek clarity on per-pupil totals

State education leaders told the Legislative Commission's budget subcommittee on Wednesday that Nevada's People Centered Funding Plan will continue to drive K'12 allocations but that final per-pupil figures remain subject to technical adjustments and revenue projections.

"When the People Centered Funding Plan was introduced, there was a new fund created to manage the revenues," Deputy Superintendent Megan Peterson said, describing how the PCFP consolidates state and local revenue into a single Education Fund (budget account 2609) with a related Education Stabilization account (budget account 2608).

The department presented the governor's revenue and distribution estimates for the plan and described the formula's four funding tiers: Tier 1 (transportation and auxiliary services), Tier 2 (local special education), Tier 3 (an adjusted base per pupil) and Tier 4 (targeted weights for English learners, at-risk and gifted students). Peterson said the governor's recommendation projects roughly $5.8 billion in Year 1 and $5.9 billion in Year 2 for the education account and that the state continues to budget the special education set-aside at a flat level to protect federal maintenance-of-effort obligations.

Why it matters: Legislators pressed the department on a headline concern: whether per-pupil funding declines in the governor's recommendation. Peterson and State Superintendent Joan Ebert said the department does not expect per-pupil funding to fall once the governor's technical corrections and Economic Forum revenue updates are incorporated, but they could not give an exact per-pupil figure during the pre-session hearing.

The department emphasized two revenue-driven features that complicated a simple per-pupil comparison: (1) more dollars are being pulled off the top of the fund for expansions such as transportation and charter school salary adjustments in Tier 1; and (2) enrollment is counted quarterly, producing intra-year shifts in payments.

"Because this is a revenue-driven model, the revenues are fixed effectively at this point in time. It's just a matter of the distribution of those revenues within the model," Peterson said when asked about whether total K'12 funding will grow.

Legislators asked for a prompt update once the Economic Forum posts its May revenue outlook and when the fiscal year closes June 30, both of which the department said are needed to finalize residual transfers to the Education Stabilization account (2608). Peterson explained the stabilization account is funded by residual PCFP revenue, by certain district end-fund balance transfers that exceed statutory thresholds, and by interest; if the stabilization account tops the 20 percent threshold it can flow back into PCFP.

Discussion highlights and policy questions

- Hold-harmless districts: The department said three districts remain in a hold-harmless status that preserves their prior Nevada Plan base rather than the PCFP-adjusted base; those districts have limited local revenue growth tied to historical net proceeds of minerals and are expected to remain at fixed bases for an extended period.

- At-risk metric and validation: Peterson said the State Board held a regulation hearing in December and the department is researching alternative metrics (for example direct certification) to identify students eligible for the at-risk weight.

- Transportation and charter allocations: The governor's proposal includes new charter transportation funding and a salary-adjustment carve-out in Tier 1 to reflect SB 231 raises; department staff said those carve-outs reduce the dollars flowing into the adjusted-base per-pupil calculation.

Public comment and stakeholder input

Several stakeholders used the committee's public comment period to press for more funding. Teachers and education groups urged rejection of cuts and asked the legislature to follow the Commission on School Funding's 10-year recommendation to raise per-pupil funding. For example, Alexander Marks of the Nevada State Education Association urged the legislature to adopt the Commission's plan to close Nevada's gap with the national average.

What the department will deliver next

Peterson said the department will provide districts the finalized per-pupil allocations once the Economic Forum projection and year-end revenue are set, and the department will propose technical budget amendments if needed to preserve the adjusted-base allocations.

Ending note

Legislators repeatedly told the department they want a common set of numbers so the public and districts are not left to speculate during session. The department said it will provide updated per-pupil figures after the economic outlook and year-end numbers are finalized and will keep the committee apprised of technical amendments.