State News

Nebraska’s typical conflicts over funding public schools played out in Lincoln Tuesday as state Sen. Mike Groene of North Platte presented his ideas for reforming the state’s 29-year-old school-aid formula before the Education Committee that he chairs.

Its myriad provisions — headlined by a return to per-student “foundation aid” for every district to help slash property taxes — would lift combined state aid for Lincoln County’s schools by 70 percent between this school year and 2020-21, according to a committee projection of Legislative Bill 695’s effects.

“Nowhere do we cut spending on education — nowhere — or increase spending on education” by individual districts, Groene told his colleagues as he opened their State Capitol public hearing on his bill.

But, as Groene himself stressed, that bill’s success depends on several “ifs.”

First, and least likely, LB 695 would have to clear the committee, the Legislature and Gov. Pete Ricketts without changes. Senators also would have to appropriate all the school-aid money the bill calls for, an elusive hope since the aid formula’s last major overhaul in 1990.

Even the Education Committee’s projections of his bill’s impact, Groene said, show stagnant or falling school aid for every statewide district in 2019-20 because state income- and sales-tax revenues once more are falling short of expectations. Those projections, however, say every one of Nebraska’s 244 districts would rise again in 2020-21 under his bill.

Finally, rural and small-town districts whose agricultural landowners say their property tax burdens threaten their survival must contend with Nebraska’s far more populous urban and metropolitan districts, whose communities control a majority of Unicameral votes.

One of the latter’s representatives was blunt: For her district to meet the needs of its students — especially those who are poor, learning English as a second language or both — it needs every state dollar it now gets, if not more.

“Equalization is very important, and it must be preserved in the state aid formula,” said Liz Standish, the Lincoln Public Schools’ associate superintendent for business affairs.

Besides Standish’s live testimony, the Lincoln, Omaha and Nebraska chambers of commerce all submitted letters opposing Groene’s bill.

“It’s pretty obvious the state chambers aren’t for property tax relief and they like all those tax dollars from North Platte flowing into their schools and cities,” Groene said during his closing comments on LB 695.

In addition to Groene’s bill, committee members heard two far simpler but potentially far-reaching proposals.

Henderson Sen. Curt Friesen’s LB 662 would abolish the state school-aid formula entirely in 2022 — a step he said would set a deadline for senators to fix the aid formula by rebalancing state and local government financing among property, sales and income taxes.

But if the state’s nearly $1 billion school aid program were abolished, “it wouldn’t really affect my districts at all, since most don’t get equalization aid,” Friesen said.

Meanwhile, Gordon Sen. Tom Brewer would ask voters in 2020 to approve a constitutional amendment (LR 5CA) saying no more than 33 percent of school funding could come from property taxes. The Sandhills senator, who sits with Groene on the Education Committee, agreed with Friesen that the Legislature isn’t likely to risk finding a solution unless forced.

“If we get enough property tax bills out there (on the floor) to look at, there has to be a solution somewhere in the works,” Brewer said. But “if we don’t show a passion to try to fix this, there’s going to be hell to pay in the next election. And there should be.”

But Groene pointed out to his western Nebraska colleague that LR 5CA as written would apply that limit to combined statewide school spending. If it isn’t applied to individual districts, urban senators could outvote rural ones and shift the remaining property tax burden “right back to us,” he said.

No one besides the bills’ respective sponsors testified in support of any bill, though neutral testimony from some school officials showed sympathy for certain aspects. As usual during Unicameral committees’ hearing sessions, Groene’s committee took no action on any bill Tuesday.

Though most of LB 695’s changes would take effect in 2020-21, committee staffers’ projections point toward state-aid increases next fiscal year — whether the proposal passes or not — for every Lincoln County district except Wallace.

The accompanying table’s projected 2019-20 aid totals, Groene said, already account for reductions the Legislature’s Appropriations Committee has warned will be necessary if income- and sales-tax collections don’t improve. Totals for 2020-21, by contrast, assume senators fully embrace LB 695 as written.

“The models are comparing if (the aid formula) is fully funded, which is not the case,” Groene said in a Tuesday morning email to The Telegraph.

Even in that less rosy scenario, the North Platte schools’ total aid would rise by 1.9 percent for 2019-20 after falling each of the last two years. If LB 695 were adopted and fully funded as introduced, the district’s aid would leap in 2020-21 by nearly 51 percent from this year’s total, according to the Education Committee projection.

Brady, which received a mere $97,102 in aid this year, would see its aid total more than double next year and reach more than seven times this year’s total by 2020-21. Sutherland, which got only $27,161 from the state this year, would complete an even more dramatic leap — 40 times its 2018-19 amount — two years from now.

Though Wallace’s state aid is expected to drop 15.8 percent next year under expected state budget cuts, LB 695 would more than make up for it in 2020-21. By then, according to the Education Committee projection, Wallace’s aid would be more than double that of 2018-19 if the bill were adopted and funded without change.

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