Nevada subcommittees approve transfers, targeted funding steps to shore up K-12 budget

CARSON CITY — On May 7, 2025, the Joint Assembly Committee on Ways and Means and the Senate Committee on Finance subcommittees on K‑12, higher education and capital improvements approved a set of budget closings to address reduced revenue projections and to fund the upcoming biennium for K‑12 education.

The committee voted to include language in the 2025 K‑12 education funding bill authorizing a permanent transfer of $126,900,000 from the Education Stabilization Account (sometimes called the K‑12 rainy day account) to the People Centered Funding Plan (PCFP) to cover a projected shortfall in the state education fund. "Fiscal staff now estimates an approximate 126,900,000 would be needed to transfer from the education stabilization account to the pupil centered funding plan budget account in fiscal year 2025," James Malone, fiscal analyst for the Legislative Counsel Bureau (LCB), told the subcommittee.

Why it matters: updated consensus revenue forecasts provided in May showed multi‑hundred‑million‑dollar reductions from the projections used in the governor's recommended budget. Committee decisions on transfers, base per‑pupil intent and targeted allocations shape how much money local districts, charter schools and specific programs will receive for the next biennium and affect the Education Stabilization Account balance available for future shortfalls.

Revenue and base funding decisions Fiscal staff presented a May 2025 consensus forecast showing lower revenues to the PCFP, and the subcommittee approved non‑general fund revenue projections and a general‑fund appropriation approach aligned with the governor's amended recommendation. The panel directed staff to maintain the governor's amended statewide base per‑pupil amounts — $9,416 in fiscal 2026 and $9,486 in fiscal 2027 — rather than lowering those targets to reflect a more recent three‑year inflation average.

James Malone summarized the revenue changes: the May forecast produced revenue reductions when compared to the legislatively approved budget, and fiscal staff estimated a $126.9 million permanent transfer would be required if the subcommittee chose to authorize that transfer now. Malone noted that if PCFP funding ultimately exceeds expenditures, the excess would revert to the Education Stabilization Account; conversely the Department of Education would need IFC approval for additional permanent transfers if funding remained insufficient.

Special education and methodology changes The committee considered how to calculate the local special education tier within the PCFP. The Department of Education proposed a new methodology that starts from actual special‑education expenditures and subtracts ineligible revenues and reserves; that approach would reduce or eliminate some district distributions under the prior methodology and would produce $0 local special education tier distributions for some small districts under the new calculation.

The subcommittee approved the Department of Education's new methodology as recommended by the governor and also approved a letter of intent directing the Department to work with the Commission on School Funding to review the methodology and offer recommendations. "The governor's finance office supports the implementation," James Malone said after the Department and the finance office met following earlier work sessions. The panel also discussed risks that some local education agencies could need state or federal assistance to meet maintenance‑of‑effort requirements if local reserves are used under the new methodology.

Salary adjustments and charter school funding The panel voted on how to handle the governor's recommended K‑12 salary adjustment funds. The committee approved providing the $249.9 million for school districts over the 2025–27 biennium but did not fully adopt the governor's recommended charter school allocation as submitted. Members also approved directing that, if charter school funding is included, those funds be appropriated to the Interim Finance Committee (IFC) contingency account and distributed after charter authorities submit requests showing matching commitments. The committee also directed staff to create a categorical program rather than a new tier inside the PCFP for permanent salary adjustment funding, and asked the Department and the Commission on School Funding to study budgeting methodology for future biennia.

Transportation and one‑time funding choices The subcommittee approved a governor's budget amendment to remove ongoing charter transportation funding from the PCFP and to consider $17 million as a one‑time general fund appropriation through separate legislation. Fiscal staff said prior one‑time awards were used to purchase vehicles and that ongoing maintenance would otherwise fall to charter schools' operating funds.

State special education services and other allocations The committee approved the Department of Education's recommended general fund appropriations for the state special education program, including a contingency appropriation and funding for a 2% roll‑up for merit adjustments in special education staff. The panel also restored and approved one‑time payments for the 13%‑plus supplemental special education program as one‑time annual funding rather than rolling those amounts into base funding.

Professional development programs Fiscal staff recommended and the subcommittee approved a motion to provide $882,946 over the biennium to fund collectively bargained salary and benefit increases for employees of regional professional development programs (RPDPs). The committee directed that the appropriation be made to the IFC contingency account and that RPDPs request the funds during the interim with documentation.

Public comment Multiple teachers, school counselors and representatives of charter schools and education associations urged the committee to use rainy‑day reserves and to increase long‑term funding. "The work that you guys did last session actually did make it so some of the teachers could come back. I was able to go back to teaching and actually survive in Reno," teacher Drew Franklin said during public comment. Speakers repeatedly urged the legislature to pursue tax‑structure changes and larger investments to meet the Commission on School Funding recommendations.

Votes at a glance - Authorize permanent transfer of $126,900,000 from Education Stabilization Account to PCFP for FY25 shortfall — outcome: approved unanimously. - Approve non‑general fund revenue and general fund appropriation approach aligned to governor's amended recommendation and to maintain the statewide base per‑pupil amounts ($9,416 / $9,486) — outcome: approved. - Adopt NDE's new methodology for local special education tier and issue letter of intent to NDE to work with Commission on School Funding — outcome: approved unanimously. - Approve general fund appropriations of $249.9M for school districts for salary adjustment; direct charter allocation to IFC contingency with further review; establish categorical approach rather than a new PCFP tier — outcome: approved (several no votes recorded from members who urged broader inclusion of charter schools). - Remove ongoing charter transportation funding from PCFP and consider $17M as one‑time general fund appropriation — outcome: approved. - Approve funding for state special education program including 2% roll‑up and restore 13% supplemental program as one‑time annual funding — outcome: approved. - Approve $882,946 over the biennium for RPDP salary/benefit increases with IFC contingency routing — outcome: approved.

What’s next: fiscal staff will update the PCFP model and return to the subcommittee at the next scheduled closing to present the updated allocations and any language to be placed in the 2025 K‑12 education funding bill. Public comment and calls for larger, structural revenue changes continued at the meeting’s close.