LINCOLN — Twenty-one Elkhorn students will have to transfer out of the Underwood Hills focus school next year.
Lexington teachers have agreed to go without permanent salary increases.
And Millard school officials are considering possible pink slips for staff.
Gov. Dave Heineman announced state school aid recommendations Thursday that could result in program cuts, job elimination and potential property tax increases in districts across Nebraska.
The aid figures were part of a $7 billion budget plan that would shrink state government, while launching initiatives to attract and increase good-paying, high-tech jobs to the state.
The plan would close an estimated $986 million budget gap without raising state taxes or fees.
“I'm optimistic about our future,” the conservative Republican said. “This budget capitalizes on our positive momentum and sets the stage for a prosperous decade.”
State school aid, which represents about a quarter of the budget, also accounted for a large part of the governor's budget solution.
Heineman proposed no increase in state tax dollars for K-12 schools during the coming school year, followed by a $50 million increase for the 2012-13 school year.
The result would be a reduction in total aid to schools from this year's $950 million, which was boosted by federal stimulus dollars.
Heineman called for setting state aid at $810 million next year and $860 million the following year. He would supplement next year's aid by carrying over $59 million in federal funds.
Some education officials said they had hoped for more in the governor's proposal.
Some said they were pleased it wasn't worse.
Most said they were not surprised at the figures, given the warnings Heineman has been delivering over the past several months.
“We would like to think his budget recommendation is kind of a floor, a worst-case scenario,” said Brian Hale, with the Nebraska Association of School Boards.
If so, Lexington Superintendent Todd Chessmore believes his district can handle the reduction.
School officials there have been trying to prepare for cuts in aid, which accounts for 60 percent of the district's funding. They have put money into reserve, negotiated tough contracts with teachers and tried to avoid spending federal stimulus money for continuing types of expenses.
Chessmore said the district might need to cut jobs, but he hopes to do that through attrition and to protect classroom staff.
Ken Fossen, associate superintendent with the Millard Public Schools, said his district is exploring options that include layoffs, wage freezes and property tax increases.
“Those are all possibilities, and everything is on the table,” Fossen said. “We want to avoid issuing pink slips if we can.”
Fossen said state aid represents about 33 percent of the Millard budget, and the governor's proposal would pare about 10 percent of that.
John Poppert, superintendent of schools in Giltner, population 389, in south-central Nebraska, said he has already told the head of the local teachers' union not to expect raises the next two years.
He said his district could lose up to $300,000 in state aid — about one-seventh of the budget — because of increases in farmland values.
Poppert said he heeded warnings given by state officials to build up cash reserves in preparation for the end of federal stimulus funds. Still, with energy, health-care costs and other expenses rising, the loss of state aid will put his district in a pinch, he said.
Elkhorn Superintendent Steve Baker said he is confident the district can weather next year and hopes it can manage the following year, as well.
But he worries about future years and what might happen to aid.
“You can't cut forever,” Baker said. “Let's just hope things are getting better” economically.
Elkhorn prepared for the end of federal funds by putting money aside and watching spending, he said.
At the same time, the district has to accommodate steep growth in student numbers. It opened two new schools this year and will open a third one next year.
Luann Nelson, a spokeswoman for Omaha Public Schools, declined to comment on the governor's proposal.
State Sen. Greg Adams of York, the Education Committee chairman, said the Legislature will make the final decision about aid figures.
The governor's proposed two-year budget would trim social services spending and eliminate between 450 and 500 state jobs.
But it also would launch programs to help high-tech startup businesses and to spark development of the mostly vacant Innovation Park research campus at the University of Nebraska-Lincoln.
Overall, the University of Nebraska-Lincoln and the business community appeared to be the big winners, while K-12 education, health care providers and state employees are the biggest losers.
Initial reaction from state senators was overwhelmingly positive.
Lincoln Sen. Danielle Conrad, a Democrat who frequently disagrees with the governor, said Heineman could have cut human services even deeper and might have forced college tuition increases by reducing funding for higher education. He is aiming in the right direction by focusing on job creation, she said.
“I think he hit a home run in terms of the appropriate focus and fiscal responsibility,” she said.
The speaker of the Legislature, Sen. Mike Flood of Norfolk, called the speech “unbelievably bold.”
“We've been in a fiscal lockdown mode for the past two years. I appreciate the fact that he's getting aggressive and identifying priorities,” he said.
Omaha Sen. Brenda Council called the speech interesting but was concerned about proposals to divert funds from job training and affordable housing funds to finance his initiatives.
The governor's budget calls for taking $260 million from the state's “rainy-day fund” of cash reserves to meet the constitutional requirement to balance the budget.
Heineman stated adamantly that he would oppose increases in any state tax or fee, including a tripling of cigarette taxes, which State Sen. Mike Gloor of Grand Island has proposed.
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