Business and construction are booming in Reno, and that means even more students for the already-overcrowded Washoe County School District. In the latest installment in our Bursting At The Seams series, we break down the complex relationship between economic development and local schools.
Each new home built in Washoe County generates a certain amount of capital improvement funds for the school district. But spokesman Riley Sutton says when you do the math, the numbers don't add up.
"For a brand new $300,000 home, we get about $5,000 of bonding capacity. To build a new elementary school costs about $23 million, so you need 4600 of those homes. 4600 new homes delivers about 2 elementary schools, a fifth of a middle school and a fifth of a high school. To build those seats costs $80 million."
In other words, those new homes would generate $23 million in capital funding for the district, but would supply so many new students it would cost $80 million to serve them. "We're starting out in a hole of almost 4 to 1 right from the beginning, and we have been for years."
Pete Etchart, Chief Operations Officer for the district, says there's another critical issue with the funding they get from property taxes.
"When the economy was going up, the legislature put a 3-percent cap on growth for property tax."
That helped to keep taxes from increasing more quickly than salaries back when the economy was hot, but when the recession hit, the housing market crashed and property taxes went right along with it. They stayed low from 2006 to 2010 and since property tax can only increase at a maximum of 3 percent per year, that's meant a drastic reduction in dollars.
"Now, we only have one source of funding for building new schools, maintaining schools and renovating old schools, and that's property tax."
Etchart says every other county in the state has at least one other funding source, such as taxes from the mining industry. Because Washoe County depends on a capped funding source, even when the region sees economic growth, schools only see a marginal benefit. That's part of why nearly all district schools have hit or exceeded capacity -- there just hasn't been enough money to build new schools.
Mike Kazmierski, CEO of the Economic Development Authority of Western Nevada (EDAWN), says people often refer to overcrowding as a "Tesla problem," -- the result of new tech companies moving into the region -- but he says that we're actually still behind on dealing with growth that happened more than a decade ago.
"Some people talk about growth and is this a growth problem? It's not a growth problem. We have underfunded our capital needs in this region for some time. We haven't built a new school in over 10 years and we're funding at half the level that Clark County is funding their education system."
Garrett McCullough, co-founder of the Reno-Tahoe startup meetup group Silicon Mountain, says schools are a major obstacle to attracting and retaining new tech businesses in the area.
"We've seen people who will move here either when they're single or married but with no kids and then once they have kids or have school-age children, they aren't happy with the schooling options and then they end up moving away."
Ashley Clift Jennings, founder of the music startup Parlor Shows, says she hears this all the time, too.
"It's a huge problem, and it is the number-one reason I hear that people don't want to come to Reno."
Ultimately, Mike Kazmierski with EDAWN says having enough schools is a business necessity.
"It really is time to step up and provide our kids the quality infrastructure, the schools, and the opportunities to learn so that these employers coming in will have access to a quality workforce and our kids will have access to quality jobs in the future."
There have been attempts over the past several years to eliminate the property tax cap, or impose fees on developers to cover capital costs for schools, but those efforts have failed repeatedly. Currently, the only solution being discussed is the possible ballot initiative our news team covered yesterday that would ask voters to approve yet another tax hike, this time for capital funding. If that fails, the district has said it will have to look for legislative solutions, but it is unlikely to find any in time to stave off some of the more severe impacts of overcrowding.