Though more far-reaching changes went nowhere during the recent legislative session, state lawmakers’ biennial budget decisions have lifted next year’s west central Nebraska school aid to its highest level in five years.
The 40 school districts within The Telegraph’s traditional coverage area will divide nearly $48.4 million in state aid for 2019-20, a 19.7% boost in a year when statewide school aid will rise by 6.5 percent.
It’s the region’s highest combined total since 2014-15, when the 40 districts split $53.4 million. It’s also their first annual boost in aid since 2012-13, the only previous interruption during a decade of generally bleaker state revenues and soaring taxable valuations for farms and ranches.
But agland valuation growth generally stalled in 2018, and lawmakers this year lifted some of their extended but temporary limits on growth in statewide school aid.
Both facts benefited rural districts in the complex aid formula, according to staffers for the Legislature’s Education Committee.
Every Lincoln County K-12 district except Wallace will receive more aid next school year, with total state support for North Platte Public Schools rising by 6 percent after two years of substantial declines.
North Platte, one of only eight regional districts to receive additional “equalization aid,” will receive $9.75 million to help hold down its property tax rate. The district’s annual aid had fallen from $11.5 million in 2016-17 to $9.2 million last school year.
“Now, hopefully, we’ll be building back to square one” in terms of what Nebraska’s state-aid formula says schools should get, said Stuart Simpson, the North Platte district’s finance director.
Next year’s state aid awards, certified May 29 after Gov. Pete Ricketts signed the Legislature’s budget bills, dramatically halted a post-Great Recession erosion that had cost regional schools 40 percent of their combined state aid since 2008-09.
But lawmakers’ decisions for 2019-20 failed to alter many of the issues driving a school-aid-oriented property tax relief plan that failed to gain traction in the Legislature this past session.
The Telegraph’s analysis of next year’s aid totals reveals:
» All but nine of the 40 regional districts will receive more state aid than in 2018-19, though most districts’ aid awards remain far short of what the state gave them a decade ago.
» Three-fourths of next year’s $48.4 million in regional aid is accounted for by “equalization aid” to North Platte, McCook, Gothenburg, Cozad, Lexington, Overton, Cody-Kilgore and Curtis-based Medicine Valley. The last received no equalization aid in 2018-19.
The aid formula deems “equalized” districts to have greater educational “needs” than fiscal “resources.” Two major factors on the “needs” side are the numbers of students whose families live in poverty or have limited proficiency in English.
» “Resources” in the aid formula, meanwhile, depend in large part on districts’ taxable valuations. That explains why west central Nebraska’s 32 non-equalized districts — most of them in the Sandhills and southwest — will divide only one-sixth of next year’s region-wide school aid.
Five of those districts — Wallace, Maywood, Eustis-Farnam, Wauneta-Palisade and Hitchcock County — saw their 2019-20 aid drop by double-digit percentages. Hayes Center and McPherson County aren’t in that group, but they’ll receive $7,846 and $5,546 in aid respectively.
» Even so, total aid for the 32 non-equalized districts will grow by 17.4 percent next year — from $6.84 million to $8.03 million — because of the agland valuation slowdown and the Legislature’s decisions to put more money into the aid formula for 2019-20.
Their choices included a return to the formula’s intended “net option funding,” which goes to districts that have more students transfer into their schools than transfer out to other districts.
One can see the influence of that decision on the six non-equalized districts that fared best in 2019-20 aid totals. Maxwell, Hershey, Paxton, Anselmo-Merna, Stapleton and Arthur County are all within 40 miles of larger towns that can supply option students.
The property tax relief plan offered by North Platte Sen. Mike Groene, chairman of the Education Committee, would reinstate per-student “foundation aid” for every district as part of raising school aid statewide.
Groene’s plan advanced to the legislative floor as part of Legislative Bill 289, introduced by Revenue Committee chair Sen. Lou Ann Linehan of Omaha.
But the bill’s proposal to raise state sales tax rates and tax more services to pay for higher school aid — and thus enable lower school property tax requests — ran afoul of opposition from Gov. Pete Ricketts and a variety of lobbying groups.
Ricketts has historically rejected tax increases for any reason, while advocates for poor Nebraskans and service-oriented businesses decried LB 289’s potential impact on their constituents. Nebraska’s largest school districts and a few rural senators also opposed the plan.
LB 289 received three hours of first-round floor debate May 7 before Speaker Jim Scheer of Norfolk pulled it in the face of a stack of amendments. The bill, however, could be revived when senators reconvene in January.