LINCOLN — Lobbyists say Nebraska lawmakers could be heading for a “bloodbath” as the largest school districts battle smaller ones over state funding.
The potential arose Wednesday when a bitterly divided Education Committee voted to advance changes in the school aid formula.
Committee members split 5-3 on Legislative Bill 407, despite weeks of effort to reach common ground.
Representatives of the state's largest school districts said the proposal as advanced would not do enough to help districts with high needs but whose property tax levies are near the $1.05 maximum allowed by law.
Almost all of the state's largest school districts fall into that category, including Omaha, Lincoln and seven others.
“It's our feeling the state needs to step up and help them when they have nowhere else to go,” said Angelo Passarelli, a Millard Public Schools administrator.
On the other side, representatives of smaller schools support the proposal that emerged from the committee.
Jon Habben, executive director of the Nebraska Rural Community Schools Association, said it would spread state funding to as many schools as possible across the state.
“Equalization (school) aid for five years has been flowing out of rural Nebraska by the millions,” he said.
State Sen. Kate Sullivan of Cedar Rapids, the committee chairwoman, argued that the state aid changes in LB 407 represent good policy and are being done without regard to winners and losers.
“It's a package I can feel comfortable with,” she said. “I don't want it to be a rural versus urban issue.”
The bill addresses two main concerns.
First, it reins in the growth of school aid to help lawmakers balance the state budget. At nearly $1 billion annually, school aid is the largest single item in the budget.
Current law would require a 10.4 percent increase in school aid for the coming school year. LB 407 as advanced would keep the increase to 6.3 percent.
Second, the proposal would alter the formula used to divvy up aid among Nebraska's 249 public school districts.
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 sources.
There is little disagreement about the first goal.
The bill would tighten limits on budget growth and increase the property tax levies that districts have to charge to qualify for state aid to keep the total in check. The measure allows for a larger increase in total aid than Gov. Dave Heineman included in his budget proposal.
There has been no such meeting of minds about the second goal.
The large schools want formula changes that would direct more aid to the schools with high tax levies and low spending per student.
Their ideas would mean either shifting money away from other, mostly smaller, schools or increasing the aid total.
Sen. Rick Kolowski of Omaha argued that the large-school approach would better meet the formula's goal of equalizing school funding across the state.
“If (the formula) is about assisting the schools that are in need, not all schools get it,” he said.
The smaller schools favor formula changes that would allow more districts to get aid, even if they have property tax levies well below the maximum.
They point out that one goal of school aid was to relieve property taxes.
Sen. Al Davis of Hyannis said rural schools have high costs per student because of their small size. At the same time, farmers and ranchers face growing property tax burdens as land valuations have soared.
The result is that fewer school districts quality for school aid.
About 100 of the state's 249 school districts get no aid now because the formula concludes they can meet their needs with their own resources.
The number without school aid would grow to 114 under LB 407 as advanced and could go much higher under the large-school proposals.
Passarelli said the large schools will continue talking with Education Committee members in hopes of reaching a compromise before debate begins on LB 407. Lawmakers likely will take up the bill in about two weeks.
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