Nevada Goes Bust | The Nation


Nevada Goes Bust

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In the deeply impoverished community of North Las Vegas are two contrasting schools. The first is Rancho High School, the largest public high school in the state of Nevada, with more than 3,000 students.

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Sasha Abramsky
Sasha Abramsky, who writes regularly for The Nation, is the author of several books, including Inside Obama’s...

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Rancho has a thriving magnet school embedded in it, drawing 1,000 highly motivated students from around Las Vegas into a program that offers specializations in pre-med, biomedical engineering and aeronautics, and opens the doors to the country's top universities. For the more than 2,000 students in the general education high school, however—more than 70 percent of whom are poor enough to qualify for the free and reduced-price lunch program, more than 200 of whom the school district has identified as being homeless—the prospects are bleaker. Only 52 percent of these students graduate, and years of funding cuts have led to retrenchment on a grand scale. Over the past few years, as Nevada's budget situation deteriorated, the school lost upward of twenty of its 160 teaching positions. The grounds, which used to be cared for by a full-time gardener, are now episodically tended. The "block schedule," which allowed students to take eight classes instead of six, over two days, has been eliminated—the unpalatable alternative would have been to increase class sizes from about thirty-five to forty-five. Teachers have had to make concessions, including accepting additional furlough days. Further budget cuts down the road, after the school uses up the $771,000 of American Recovery Act money it received last year and the $638,000 it received this year, plus a roughly $1 million school improvement federal grant, make it possible that there won't be teachers for the noncore classes within a few years. In what could well be a sign of things to come, some AP classes are now offered only every other year.

A couple of miles west of Rancho, 625 lucky students are enrolled in the Andre Agassi College Preparatory Academy. The state-of-the-art K-12 charter school, which opened in 2001 (it is the brainchild of the retired tennis star), is backed by state funds and the deep pockets of donors from around the country. It has the declared aim of preparing all of its students for admission to college.

The sprawling campus, a swirl of walkways, airy teaching buildings, a grass-covered amphitheater, inner courtyards, libraries and music labs, cost more than $40 million to build. The school's charter stresses that admission preference will be given to local residents whose families live in poverty.

The students are almost all African-American; if they were in the local public school system, it is doubtful, to say the least, that they would be taken on expenses-paid fifth-grade field trips to visit universities across the country, or on senior trips to Paris. It is a fair bet they wouldn't have access to Suzuki violins in kindergarten, or a Senegalese drum instructor who recently returned from a drum-buying trip to West Africa, or a hall in which Cirque du Soleil teachers come to work with the kids on balance and focus. "We surround the entire student," explains the school's chancellor, Marsha Irvin. "We have the counseling support, the resources, our athletics program. We have what's called a balanced scorecard."

Rancho versus Agassi Prep. The underresourced versus the opulent. The collapse of the state sector despite the resources available via the private. The sense of possibility versus the sense of impending doom. It is, in many ways, a metaphor for Nevada as a whole these days.

When it comes to ink spilled on states in crisis, California, which has seen its budget contract from more than $100 billion to about $80 billion over the past three years, has been getting the lion's share of attention. Yet some of the country's smaller states are seeing revenue shortfalls that, as a proportion of their total budget, far exceed California's.

Nowhere is this more so than in Nevada. Four years ago, at the height of the real estate boom, when people from around the country flocked to Las Vegas to gamble and to gambol, the state government could count on about $6.8 billion in revenues for its biennial general fund. Like most other states, it went on a spending spree—hiring more teachers, expanding an array of social service programs and so on. Since then, the state's revenues have imploded, while those spending obligations remain in place. Nevada's fabled housing boom has turned into the country's worst housing bust; unemployment statewide, as of July, stood at just over 14 percent; in Las Vegas it stood at nearly 15 percent. And as construction skidded to a halt in some of the recently thriving desert exurbs east of Reno, unemployment skyrocketed to nearly 20 percent. At the same time, fewer outsiders are visiting; the tourism and gambling industries, long the drivers of state wealth and two of the biggest sources for state revenues, have shrunk dramatically. While on the surface Las Vegas's casinos and hotels seem flush, occupancy numbers are down and nightly rates have been heavily discounted. That has led to a hemorrhaging of jobs—which, in turn, has turned Vegas's real estate market to desert dust.

"The housing market has dramatically impacted Nevada," explains embattled GOP Governor Jim Gibbons from his Carson City office. "Construction became our number-two industry for a while—it started in the early 1980s, when growth was overwhelming. We were building two or three elementary schools in Nevada per month to keep up with the population influx. It lasted all the way to the beginning of this recession—'06–07, and really impacted us in '08."

Last year, when legislators worked on the 2009–11 biennial budget, the shortfall was roughly $2.5 billion, before huge infusions of federal stimulus dollars. Over the governor's opposition, the Democratic-controlled legislature cobbled together a needed two-thirds majority to enact a series of temporary tax increases, which are slated to sunset next year. The legislators coupled those tax increases with spending cuts, the depletion of rainy-day funds, creative use of the state's tobacco settlement dollars and other budgetary gimmicks to kick the worst of the crisis down the road. "We saw what was coming," recalls Josh Hicks, a Reno-based tax attorney who was working as Gibbons's chief of staff during the budget negotiations. "We'd try to take steps to resolve it, but it was a difficult political situation. In hindsight, nobody really knew how bad it was going to get, or where it was going to stop, or what steps to take to solve it." Like legislators and governors around the country, Nevada's leaders improvised, hoping they would keep finding new roads to kick the crisis down.

But now those roads have been traversed, and the fiscal catastrophe is that much worse. The Retail Association of Nevada recently estimated that Nevadans have cumulatively lost $25.4 billion in income since 2008, translating into a staggering $9,800 per resident. As a result, services at every level of government are being curtailed.

Monthly services for in-home care have been cut by more than 60 percent, says Erik Schoen, with more reductions on the way. Schoen, an employee with the Community Chest of Storey County, whose 23-year-old daughter lives with multiple disabilities and requires around-the-clock care, says that he and his wife—who was paid through the state's shrinking program—might not be able to afford to care for their child at home much longer. "It's much harder in terms of the stress load for us as a family," Schoen explains. "A year from now, we don't know what we're going to do if they cut it further. We don't want to lose our house, don't want to lose our livelihood, everything that matters to us."

But, says Jon Sasser, a healthcare activist and employee of Washoe Legal Services, that's precisely the sort of thing that might soon be happening to Nevada's vulnerable populations. And, he says, it isn't only home healthcare that's on the chopping block. If conditions continue to worsen, the elderly would face possible elimination of state aid for buying eyeglasses, dentures and hearing aids—they've already experienced ignominious cuts to the adult diaper program. And the mentally ill, particularly in rural counties, are facing huge reductions in services. In Lyon County, for example, the only mental health clinic for miles was recently closed (some worry that all of the state's rural mental health clinics will soon be shuttered). The wait time to be seen, says Schoen, has increased from one month to three. Perhaps not coincidentally, in the wake of the clinic's closure, the county's suicide numbers rose from eleven in 2008 to eighteen in 2009.

The premiums for Nevada's S-CHIP program, providing health coverage to low-income kids, are likely to triple. Medicaid recipients have lost outpatient cancer and dialysis clinics, and are going to face even steeper cuts next year. And hospitals and residential treatment centers working with Medicaid recipients have had their reimbursement rates reduced by 5 percent, with more cuts on the horizon. Ray Bacon of the Nevada Manufacturers Association even argues, from out of right field, that it is time for the state to seriously consider walking away from the Medicaid program entirely. Even autistic children aren't immune: they are facing a 22 percent cut in the monthly support rates paid for their care.

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