Education Savings Accounts Not Yet Saved

Though the Nevada Supreme Court this past week jettisoned most of the arguments that somehow the state’s education savings account (ESA) law is unconstitutional, it still barred enforcement of the law, saying lawmakers failed to properly appropriate money for the ESAs.

It is now up to lawmakers to fix that flaw.

The justices found that Senate Bill 515, which sets aside per pupil funding in the Distributive School Account (DSA), did not even mention ESAs and Senate Bill 302, setting up ESAs, did not “appropriate” funds, even though both bills amend the education financing section of state law (NRS 387) and SB302 added to the already lengthy list of DSA deductions “all the funds deposited in education savings accounts.”

A niggling technicality.

Until the court derailed it, SB302 outlined a program under which the state treasurer was directed to establish an education savings account for any eligible child enrolled in a public school for the previous 100 consecutive days — when the clock now starts is anyone’s guess — and for most the account would be equal to 90 percent of the statewide average per pupil funding, or currently $5,139. There is no limit on the number of accounts.

In a ludicrous aside in the opinion, the court noted the education statute has a hold-harmless clause to protect against wild gyrations in enrollment and suggested that “if all the students left the public school system, the State must fund both the school district’s per pupil amount based on 95 percent of the prior year’s enrollment and the education savings accounts for all students, an amount potentially double the $2 billion appropriated in SB515 for just the public schools. Given that scenario, surely the Legislature would have specified a number of education savings accounts or set a maximum sum of money …”

What would a district with no students spend the money on?

At least a couple of major constitutional hurdles for ESAs have been cleared.

The court dismissed the contention that SB302 violates the state Constitution’s prohibition against using public funds for sectarian purposes. “We disagree. Once the public funds are deposited into an education savings account, the funds are no longer ‘public funds’ but are instead private funds of the individual parent who established the account,” the court opined. “The parent decides where to spend the money for the child’s education and may choose from a variety of participating entities, including religious and non-religious schools.”

The court also dismissed the notion that the state may only expend funds for public schools, noting repeatedly that the state Constitution instructs the Legislature to support education “by all suitable means” and noted that the drafters of the founding document “rejected the notion of making public school attendance compulsory, and acknowledged the need to vest the Legislature with discretion over education in the future.”

So, ESAs are now on the fast track to legislative approval at some future date before the 8,000 children who have applied for them have children of their own, right?

Attorney General Adam Laxalt, whose office defended the law in court, said, “The Court ruled against the State on a small funding issue that was not even debated or contentious when this bill was passed. Fortunately, the Supreme Court has made crystal clear that ESAs are constitutional and that the Legislature can fix this funding technicality and allow for the implementation of ESAs statewide.”

Gov. Brian Sandoval put out a statement after the high court ruling indicating he does not plan to call lawmakers into a special session and will leave the fixing of the appropriation up to the 2017 legislative session, which opens in February.

“Although the court found the current funding mechanism for Education Savings Accounts unconstitutional, there may be a path for a legislative solution,” Sandoval said in that statement. “However, such a solution is complex and must be well thought-out to meet constitutional muster. … I also believe it is important to consult with legislative leadership on this issue as we approach the 2017 legislative session.”

The fly in that ointment is that there is an election in November and it is entirely possible Democrats, with the backing of their teacher unions, just might gain a majority in either the state Senate or Assembly — in which case, ESAs are dead for the foreseeable future, because not a single Democrat voted for ESAs in 2015.

On Wednesday, Sandoval called a special session for Monday but did not put ESAs on the agenda.

Thomas Mitchell is a longtime Nevada newspaper columnist. You may email him at thomasmnv@yahoo.com. He also blogs at http://4thst8.wordpress.com/.