Nebraska Districts Teaming Up To Revamp School-Finance Law

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While Kansas policymakers ponder fundamental changes in their education-funding system, some school officials in neighboring Nebraska are joining forces to make changes in that state's 1990 school-finance law.

The Nebraska law, which survived a repeal attempt in the 1990 elections, shifts the burden for funding schools from property taxes to income and sales taxes, in the process almost doubling the state's share of education spending.

Officials of at least 20 districts that are likely to receive less money as a result of the formula contained in Legislative Bill 1059 have formed an organization to petition for alterations.

"We're not trying to get rid of LB 1059," said James Grove, the superintendent of the Callaway school district and one of the rounding members of the School Finance Coalition. "We want to revamp it a bit."

Under the new formula, the state's share of school operating expenses has risen from about 23 percent in 1989 to 43 percent this year. The money has been used, in part, to address disparities in spending between districts.

The new aid was generated by increasing the sales tax from 4 cents to 5 cents and by hiking individual- and corporate-income taxes by 17.5 percent.

At the same time, the law reduced local property taxes by imposing lids of from 4 percent to 6.5 percent on the allowable growth of districts' general funds and of other local-government budgets supported by such levies. The ceiling was included to ensure that the rise in state aid would serve to decrease districts' reliance on property taxes and not be absorbed entirely by higher spending.

Mr. Grove noted that about 90 of the state's 800-odd districts have lost or are slated to lose money as a result of LB 2059.

Mr. Grove said the new group, which met for the first time last month, has formed a research committee and may hire a lobbyist.

He said the coalition, which is scheduled to meet with an official of the state education department this week, is seeking to alter the formula to take into account above-average transportation costs in some districts.

Mr. Grove added that the group would also like to make the law's hold-harmless provision, which currently protects districts against state-aid reductions through the end of this school year, a permanent part of the measure. In addition, he said, the coalition thinks the law should require each district to impose a minimum property-tax level.

But Senator Ronald Withem, who chairs the unicameral legislature's education committee, said he doubts that lawmakers will revisit LB 1059.

Vol. 11, Issue 14, Page 20

Published in Print: December 4, 1991, as Nebraska Districts Teaming Up To Revamp School-Finance Law
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