In September of 2012, AIR completed a study for the Nevada State legislature to investigate how the state finance system could be improved by determining how it could best address the differential funding needs of students and smaller rural districts. AIR team members examined state funding formulas, demographic characteristics, and fiscal data from all 50 U.S. states. Based on empirical analyses of these data, the team has attempted to identify the best practices that lead to an equitable distribution of funding with respect to the incidence of students in poverty, English language learners, students enrolled in special education programs, and students attending schools in districts that have a small scale of operations.

The project consisted of four major activities:

• An in-depth overview of the current Nevada Plan for School Finance (Nevada Plan);
• The development of an inventory of state finance systems that shows how states are addressing the additional costs of serving students with specific needs and other cost factors;
• An analysis that compares patterns of actual spending across districts within all states across the country; and
• The provision of recommendations to improve Nevada’s existing school funding model and incorporate best practices for ensuring student needs and challenges of delivering education in smaller rural, remote districts are addressed. 

The Study of a New Method of Funding for Public Schools in Nevada was submitted September 25, 2012, to the Nevada Legislative Counsel Bureau by Dr. Jay Chambers, Dr. Jesse Levin and Antonia Wang (AIR), Professor Deborah Verstegen (University of Nevada, Reno), Professor Emerita Teresa Jordan (University of Nevada, Las Vegas), and Professor Bruce Baker (Rutgers University). The Nevada Plan currently forms the basis for funding K–12 education in the state. This funding allocation model guarantees a level of state funding per pupil and is intended to equitably distribute funds to all districts.