Nevada school districts say the financial cushion created by a recent K-12 funding surge has quickly evaporated, leaving several districts bracing for cuts that school officials describe as recession-like.
Three years ago, Nevada school leaders celebrated a 26% K-12 education funding increase. But superintendents across the state now say flat K-12 funding, increased operating costs that have drawn down reserves, declining student enrollment and changes tied to the state’s new funding formula have created what they describe as a “perfect storm” for school budgets.
Carson City, Douglas County, Elko County and Washoe County are among the districts facing deficits that, in some cases, can make them eligible for state intervention. The Washoe County School District said last week that it reduced its projected next-year deficit from $18 million to $5.7 million by eliminating programs, shifting certain expenses outside of the general fund, and reducing positions. The district is also planning to consolidate schools and close older campuses that need costly repairs and have declining enrollment.
In Douglas County, the school board rejected proposed contracts with teachers and bus drivers unions that included modest pay increases, as the district grapples with a $5 million budget deficit expected to reach about $7 million by 2027 if no changes are made. Afterward, the board voted to declare a fiscal emergency. Superintendent Frankie Alvarado said the designation allows the district to renegotiate previously approved bargaining agreements with its employee unions, and a vote this week is expected on proposals including consolidating two Gardnerville K-5 schools—potentially adding sixth grade—and consolidating two Gardnerville middle schools.
School finance experts and superintendents said the strain is also tied to cost increases that followed legislative action in the 2023 session. Legislators approved historic per-pupil funding increases and a $250 million matching fund that districts could tap to provide pay raises. Lawmakers renewed that matching funding during the 2025 session, but the base per-p-pupil amount is set to stay relatively flat for the next two years at $9,416 per student for 2025 and $9,486 for 2026, amounts that supporters say are not keeping up with the combined impact of salary increases, longevity and continuing-education pay bumps, and higher state pension contribution rates.
Dave Jensen, a former superintendent of the Humboldt County School District and a school finance expert, said the funding changes to the formula may help in some ways but not enough to solve the overall issue without state action to increase education revenue. “We’re going to see more and more school districts become insolvent,” Jensen said, describing a growing risk of districts losing financial stability.
Superintendents also point to enrollment changes that reduce predictable revenue while fixed costs remain. State data shows enrollment was rising until the 2019-20 school year, when it peaked at about 500,000 students, and this school year the state has about 474,000 public school students. Clark County is not reporting a deficit but said its per-pupil funding decreased by about $43 million after enrollment dropped to fewer than 280,000 this school year, more than 4,000 students less than projected; some cuts happened after classes had already started.
Elko County’s enrollment is about 9,000 this school year—roughly 1,000 fewer than six years ago—and the district predicts declines of 1% or more per year. Anderson said his district is trying to be fiscally conservative but still gave raises of 11% for teachers and support staff to remain competitive with other districts approving double-digit raises. “It made it real tough for us to look at our staff and say, ‘Yeah, sorry, we gotta put this towards the ending fund balance. We can’t help you out,’ because then you risk losing staff to every other district,” Anderson said.
Anderson said Elko is looking to cut $15 million after projected revenues decreased to about $125 million, including $7 million driven by enrollment-related per-pupil funding decreases, and that the district has already implemented $3 million in cost-saving measures. In Douglas County, the district’s enrollment has fallen by about 1,000 students over the past decade, a 17.4% decrease, and the district said enrollments for the 2025-26 school year and the prior year were each modestly below projections, producing revenue declines of about $1.8 million and $1.2 million respectively.
Documents described by the district show Douglas County’s finances have fluctuated since 2018, with revenues reaching $59 million in 2025 and its ending fund balance reaching as high as about $11.6 million in 2022. Alvarado said that when he interviewed for the superintendent role less than two years ago, he recalled thinking those metrics showed the district was “healthy,” adding, “There were no red flags up in the air,” and saying his early weeks on the job included assurances of “positive financial reporting.”
But the district’s own analysis described in the story indicates that in 2023 expenditures began outpacing general-fund revenue, and by 2025 the district had depleted its ending fund balance. Alvarado said the district had a general fund deficit of just under $1 million and a special education fund deficit of just under half a million, meeting conditions that would allow the state Department of Taxation to declare a severe financial emergency and assume control of the district’s finances. Alvarado said the department is choosing not to place the district under receivership “at this time” because officials believe the budget can be corrected over time, while he said he was hired “to come in and clean this place up” and now must make “unfavorable decisions” to stabilize the district’s budget.
Superintendents also said the state’s shift to a new funding formula in 2019 has complicated district planning by changing how enrollment affects funding during the year. Before the Pupil-Centered Funding Plan, the state used a single enrollment count day to set per-pupil funding for the school year, a structure that Jensen said made it possible for districts to adjust at year’s end when enrollment fell. Under the new formula, districts are funded based on enrollment measured on a quarterly basis, and Jensen said that creates funding fluctuations that can make it hard to budget for declines while the school year progresses.
In addition, superintendents said a “hold harmless” mechanism that previously partially protected districts from enrollment-based decreases now only triggers when declines meet a higher threshold. Under the older model, districts were funded at the preceding year’s level unless the decrease was greater than 5%, in which case funding could be based on the higher of the prior two years’ enrollment. Under the new formula, a similar provision takes effect only when enrollment drops by at least 5%, which superintendents said is too high to be reached often. Anderson said Elko County’s declines have hovered between 3% and 4%, while Douglas County has gotten closer at 4.75%.
The Elko County district’s chief financial officer, Cassandra Stahlke, told a panel of school finance experts during an Jan. 16 meeting that a “hold harmless” trigger between 3% and 4% would help districts, while also recommending that some funding decline continue to encourage adjustments for the next year. Still, the superintendents said the state’s overall funding level remains insufficient to cover the cost and volatility pressures districts are facing.
They point to the Commission on School Funding’s reports since 2021 about what level of funding would be “optimal” for K-12 education and what policies could help achieve that level, including property tax reform. But the story said Democrats, including Senate Majority Leader Nicole Cannizzaro of Las Vegas, and Republicans including Gov. Joe Lombardo have either not committed to supporting legislation aligned with the commission’s ideas or have downplayed them, calling the proposals nonstarters. Cannizzaro and Lombardo did not respond to requests for comment by publication time on whether district financial outlooks will lead them to reconsider.
Jensen said the only way districts can mitigate funding shortfalls, without a significant funding boost, is to reduce staffing as salaries and benefits make up most district expenses. “We’re a people-centered profession,” Jensen said. “If you’re going to save money, that equates to people. There’s not a lot of wiggle room.”