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Handouts to Nevada Private Schools Stopped

CARSON CITY, Nev. (CN) - A Nevada judge granted a preliminary injunction to stop the state from handing out $100 million in tax money to parents who want to send their kids to private schools.

First District Judge James Wilson Jr. enjoined the money handout pending court rulings in other cases.

The Nevada Legislature approved Senate Bill 302 in June last year. Known as the Education Savings Account Program, it would send $5,000 a year to parents for each child they place in a private school, at home or online, so long as the child at one time attended a public school for 100 days.

At least three lawsuits immediately followed, on constitutional grounds, as the $5,000 handouts could be given to schools that discriminate on religious, racial, handicapped or virtually any grounds.

Judge Wilson issued the preliminary injunction on Jan. 11 in lead plaintiff Hellen Quan Lopez's case. Quan sued state Treasurer Dan Schwartz in September 2015, claiming Senate Bill 302 violates the Nevada Constitution.

Quan said more than 20,000 children are enrolled in private schools in Nevada, so the law would allow more than $100 million in tax dollars to be diverted from public schools to private ones, to parents or to online programs.

The law took effect Jan. 1. The State Treasurer's Office reported that "over 4,100 families applied during the early enrollment period for the ESA [Education Savings Act] program." So early registrants were in line for $20.5 million in tax money. The handouts were to begin on Feb. 1.

Quan, however, pointed out that "The Education Article of the Nevada Constitution expressly prohibits the use of public school funds for anything other than the operation of Nevada's public schools."

Judge Wilson cited that argument in his 16-page injunction, as well as two other arguments from the plaintiffs, that the law "removes from the public school system a portion of the funds the Legislature has 'deemed sufficient' to maintain and operate the public schools ... [and] it creates a non-uniform system of schools, and uses public funds to create the non-uniform system of schools."

After a Jan. 6 hearing on the preliminary injunction, Schwartz said he intended to press forward with the program. "By the thousands of applications our office has received, Nevadans have made clear their desire for choice. We intend to give them just that," Schwartz said at the time.

Under Article 11 Section 3 of the Nevada Constitution, all land granted to the state for educational purposes and money collected from those lands must be used for public education.

Wilson cited that in his order: "Nevada Supreme Court held in State ex rel. Keith v. Westerfield that the Legislature is prohibited from using Article 11 Section 3 funds for any purpose except that immediately connected with the public school system."

Wilson also agreed that "because some amount of general funds appropriated to fund the operation of the public schools will be diverted to fund education saving accounts under SB 302, that statute violates Sections 6.1 and 6.2 of Article 11."

Attorney General Adam Laxalt on Monday presented the ruling as a victory for the state. "Although a preliminary injunction was granted this afternoon, our office is pleased that the court ruled in Nevada's favor on two of the three claims asserted against the law - one of which has been made in the related Las Vegas case. We are reviewing the order with respect to the third claim and considering our legal options to ensure that Nevada's parents receive the educational funds they are entitled to," Laxalt said in a statement.

Nevada public schools already are among the most poorly funded in the nation. A 2012 U.S. Census Bureau report, " Public Education Finances ," ranked Nevada 45th of the states in per pupil spending in public schools - $2,400 per student below the national average.

The Reno Gazette-Journal reported in 2014 that the state had fallen to 49th.

Quan Lopez et al. are represented by Tamerlin Godley with Munger, Tolles and Olson, who said she expects Laxalt will fight the injunction.

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