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Nebraska schools outline need for $87 million funding bump - Kearney Hub: State

Nebraska schools outline need for $87 million funding bump

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Posted: Monday, December 10, 2012 7:48 am | Updated: 12:20 pm, Mon Dec 10, 2012.

LINCOLN — Nebraska's K-12 schools laid out their bottom line on state education funding at the top of a recent position paper.

The school aid formula “works best when fully funded,” they said.

But persuading state lawmakers to ante up the money may be a tough sell next year.

It's an issue that pits the needs of schoolchildren against the pocketbooks of taxpayers.

Fully funding the current formula would mean an $87 million increase in aid for the 2013-14 school year and an additional $53 million the following year.

Total school aid would approach $1 billion in the second year.

Several key lawmakers, including the chairmen of the Appropriations and Education Committees, say Nebraska can't afford that much.

State Sen. Bill Avery of Lincoln, an Education Committee member, put it bluntly.

“That's a big number and it's not sustainable,” he said. “We won't spend that kind of money.”

Education officials have been gearing up for a struggle about the level of school aid next year.

The battle is expected to intensify when the Nebraska Legislature convenes in January and begins crafting a new two-year state budget.

School aid is critical to balancing the state's books.

It is the largest-single item in the budget and, by the 2014-15 fiscal year, is projected to be one-quarter of general fund spending.

“It's the thing that makes the budget work or not work,” said Sen. Lavon Heidemann of Elk Creek, the Appropriations Committee chairman.

Lawmakers will return to Lincoln with a $200 million gap between projected tax revenue and estimated spending for the two-year budget period beginning July 1.

Spending reductions rather than tax increases are expected to be the preferred method of closing the gap.

In addition, Gov. Dave Heineman has been floating ideas for tax cuts, which could require more spending cuts.

The governor declined, through spokeswoman Jen Rae Hein, to comment about school aid at this time.

Heidemann said he hopes for at least a 3 percent increase in school aid next year but doesn't think it can grow more than 5 percent.

Sen. Greg Adams of York, chairman of the Education Committee, believes the state might be able to manage as much as 6 percent.

“It's going to be single digits,” he said.

Both predictions sound gloomy to Nebraska school officials, compared with the 10.3 percent increase called for under the current state aid formula.

Most of the increase stems from the expiration of temporary measures used to rein in spending during the recent economic downturn.

John Spatz, executive director of the Nebraska Association of School Boards, said K-12 schools agreed to cutbacks in aid to help the state close its budget gaps in those years.

Now he and other school officials argue for letting the current formula determine aid levels.

“We're going to advocate for kids and the dollars in the bank to educate them,” said Virgil Harden, executive director of business for the Grand Island Public Schools.

Dennis Pool, assistant superintendent for the Omaha Public Schools, said aid growth has not kept pace with the expenses schools face because of the state's repeated cost-cutting measures.

He said those measures call into question the premise of Nebraska's school aid system.

At its most basic, school aid is supposed to fill the gap between what schools need to educate children and what they can get through property taxes and other resources.

Pool argued that the theme has changed from meeting school needs to controlling school spending.

Adams and Avery countered that the formula's goals remain the same, but lawmakers must meet school needs within the state's budget constraints.

“We have a whole state budget to deal with,” Adams said. “The law's going to determine what the needs are.”

But Sen. Heath Mello of Omaha, an Appropriations Committee member, said another goal of the school aid formula has been to ease property taxes.

Changing the formula to curb the total growth of aid shifts the funding burden back to those who pay property taxes, he said.

“Our decision on state aid has a direct link to property taxes,” Mello said.

A smaller aid pool coupled with steady increases in agricultural land valuation also has meant that fewer and fewer school districts qualify for aid.

About 100 of the state's 249 school districts get no aid because the formula says they can meet their needs with their own resources.

Jon Habben, head of the Nebraska Rural and Community Schools Association, said the school aid issue comes down to the priorities set by the state.

General fund revenue will be an estimated $92 million less in 2013-14 because of income tax cuts passed this year and last year's decision to earmark a quarter-cent of state sales tax revenue for building roads.

“There has to be a certain amount of political will to fund the formula as it's been structured,” Harden said.

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