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Higher land values mean cuts in state aid

April 15, 2011

Despite grumbling from senators across the state, the formula changes for school aid passed first-round approval unanimously April 6.
Under the bill, nearly 38 percent of Nebraska’s districts will not receive the major category of state school aid because of significant increases in farmland values in the past year. Increased property values mean the school districts, especially in rural areas, have more local resources and will not receive much state aid.
Equalization aid is the single largest piece of the state’s school aid formula, representing nearly 90 percent of the total. The equalization aid is the difference between the district’s needs and resources. So with property values going up, school district resources are going up, and equalization aid is going down.
This year, 57 of the state’s 251 school districts are not receiving equalization aid. However, with the high rural property values, next year 95 districts will not receive equalization aid.
The proposed budget has the state providing $822 million to schools next year, and $880 million the year after. That is a 13.5 percent decrease from this year’s $950 million.
The education committee faced pressure from the governor to push the school aid budget even lower.
Senator Greg Adams, sponsor of the bill and chairman of the education committee, said that if legislators needed to take more money from school aid they could, but the committee’s bill is the most equitable solution.
Senator Kate Sullivan of Cedar Rapids, a member of the education committee, said that the bill succeeds in spreading the pain across the school districts.
Another piece of school aid that will be coming up short is the federal funds available. This year the federal stimulus gave Nebraska school districts an extra $140 million, but next year they will only receive $59 million in those federal payments.
For the Broken Bow school district, as with many in the area, the projections don’t look good. Broken Bow will receive a total of $1,975,627.69 in state aid next year with $1,801,293.71 of that being Equalization Aid. That amount is $764,415.72 less than the district received this year.
Broken Bow Board of Education President Michelle Zlomke had these comments regarding the projected state aid figures for next year.
“Like most schools in the state, we have spent a couple of years anticipating a drop in state aid that would occur once federal stimulus aid to states ended.
“In Broken Bow, we took advantage of programs that helped us upgrade equipment and vehicles, and enhance our curriculum,” Zlomke continues. “That, combined with conservative budgeting, positioned our school to weather the so-called "funding cliff."
“With that being said, it's still a challenge to shape a budget around a $750,000 drop in state aid. It's also an opportunity to take a new look at where we can be more efficient and still provide great education for kids. It also motivates community members to begin thinking about what we can accomplish through non-tax revenue. The formation of the new Broken Bow Schools Foundation is a good example of that.”
Zlomke goes on to say, “Discussions about cost efficiency have occurred throughout the year. The state aid projections released last week give us a more clear picture of the decisions to be made. This board and administration is committed to retaining our staff and we have no plans to cut positions or curriculum programs. What the community will see is that we will find ways to provide better services in ways that are more cost-effective.”
The tone across the legislative body was one of reluctance. As Senator Tony Fulton of Lincoln said, “We can’t continue to spend money we don’t have.”
Included in the bill is Lincoln Senator Bill Avery’s proposal to prohibit school districts from including lobbying costs in the funding needs formula.
Many senators thanked Adams and the education committee for their hard work putting together a bill that spreads the burden of the budget concerns across the state. In his closing to the bill Adams said the school districts deserved thanks.
“I think we should take a minute and thank the school districts for working to make this work,” Adams said. “Where the rubber hits the road it’s going to be tough, but this is what we can do.”

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