Age old debate over school funding begins anew

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April 23rd, 2013

Lincoln, NE – Almost half the funding for schools in Nebraska comes from local property taxes. Another sixth comes from the federal government and other sources.

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That leaves about one-third coming from state government – largely from sales and income taxes. And that’s what senators are arguing about. Unlike recent years, when the pie has been shrinking or staying the same size, the Education Committee is proposing to increase state aid from $852 million this year to nearly $915 million next year. But how that pie gets divided up is the big issue. Education Committee Chairwoman Kate Sullivan of Cedar Rapids said she didn’t want the argument to be about politics or winners and losers:

“And neither do I want this to be a rural versus urban fight about state aid,” Sullivan said. “I’m sure that some, maybe even some here in this body, thought I would have too much of a rural slant in my focus as education chair. But I can promise you I have tried to create statewide policy here,” said Sullivan.

Sen. Ken Haar of Lincoln led the opposition to the Education Committee’s proposal. Haar said there’s a growing gap between districts with fewer than 900 students and those with more. The larger districts charge their residents an average of $1.04 per hundred dollars in property taxes for schools, while the smaller ones average about 10 percent less than that. Something called the “averaging adjustment” in the state aid formula is supposed to help compensate for that, but Sullivan and the Education Committee want to abolish or suspend that, in order to make state aid more predictable. Omaha Sen. Tanya Cook objected to that:

“This averaging adjustment was introduced,” said Cook, “in part, to address the widening gap between the amounts that are spent per student in those districts that have more than 900 students and the districts that are small by choice or are experiencing decreases in population,” Cook said.

Haar said costs per student are nearly $18,000 in rural Elba, with 67 students, but less than $7,200 in Omaha, with 48,000 students. But Sen. Al Davis of Hyannis said there’s a reason for that:

“The fact is that small districts are going to have high costs because they have few students,” said Davis. “And as long as rural Nebraska is declining in population we are going to see the smaller districts cost increase,” said Davis.

Sen. Sue Crawford of Bellevue suggested rural schools with few students per classroom and high costs per pupil have some advantages:

“I would like us to keep in mind the importance of equalizing the advantages of being in a small class for our students across the state,” said Crawford.

Sen. Mark Christensen of Imperial referred to the number of rural schools that have closed in recent years, suggesting anything that would continue that trend would hurt his constituents:

“I have kindergartners getting on a school bus at six a.m. for an eight o’clock start,” said Christensen. “They get out at 3:10 they get home at 5:10. I’ve heard senators say we need to even that cost out. Do you want my kindergarteners on the road to school for two hours? Three hours? Four hours?” said Christensen.

The way the state aid formula works, if a district has high property values it can tax, it gets less state aid. Sen. Jim Scheer of Norfolk said the recent rise in ag land values has skewed the system:

“When we talk about Ag values, I want you folks from the metropolitan areas[to keep in mind],” said Scheer. “If your homes had tripled in value and your taxes had gone up as much as the farm ground has and rural ranchland you don’t think we would have a revolt on our hands on this floor because your taxes had gone up? I’m not asking for sympathy, but I want you to realize that is the difference. Your home values because of the current economic conditions have not gone up. Farm and ranchland has. And they are continuing to pay more and more dollars each and every year.” said Scheer.

But Sen. Rick Kolowski of Omaha rejected that comparison:

“The analogy doesn’t fit,” said Kolowski. “Because the same areas where the land prices have gone up, corn prices, soy prices, bean prices, and beef prices have also risen astronomically to new records in our country and having the resources to pay a higher tax bill will be very easy to meet compared to being on a stable yearly salary in an urban area if your house prices or taxes went up two or three times,” said Kolowski.

By late afternoon, senators were continuing to wrangle over what promises to be a complicated and high stakes battle over school funding.

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