New public school funding adjustments advance
Lawmakers revisited a bill April 25 that would adjust the state aid funding formula for public schools under the Tax Equity and Educational Opportunities Support Act (TEEOSA). The bill had stalled April 22 after a full day of debate with little consensus.
As originally introduced by Cedar Rapids Sen. Kate Sullivan, LB407 would reduce the base limitation rate for school districts from 2.5 percent to 1.5 percent for the 2013-14 school year. The rate would revert to 2.5 percent for each subsequent school year.
Sullivan said changes to the formula would allow districts to recover from recessionary funding cuts.
“We have asked a lot of school districts by holding down their spending and growth,” she said. “We have 249 very different school districts with varying circumstances and needs. We have to help these districts come back from the brink and grow a little.”
The bill included several other changes to the funding formula, such as:
• increasing the local effort rate from $1.00 to $1.03 for school years 2013-14 and 2014-15;
• eliminating the teacher education allowance, instructional time allowance, averaging adjustment and local choice adjustments;
• limiting the summer school allowance to reported summer school expenditures that are included in other allowances beginning in 2014-15;
• clarifying that expenditures included in the poverty and limited English proficiency allowances cannot be included in other allowances;
• allowing additional budget authority for early childhood education when programs move from grant funding to inclusion in TEEOSA calculations; and
• including tuition paid and transportation fees paid in general fund operating expenditures.
Lincoln Sen. Bill Avery said LB407 was intended to address the issues of all school districts.
“Large school districts need more money, but so do all K-12 schools in our state,” he said. “The fact is that small districts are simply going to have higher [costs per student] because they have less students.”
An Education Committee amendment debated April 22 would have reinstated the $30 million teacher education allowance for the 2013-14 and 2014-15 school years and eliminated teacher tuition and transportation fees paid from general fund operating expenditures. Sullivan asked the body to reject the amendment April 25 in favor of a compromise reached after several days of negotiations. Senators obliged 1-22.
“This has been a process and it has not been easy,” Sullivan said. “However we are determined to continue to look at this process. This will always be a work in progress.”
Sullivan said the amendment would ensure that all students in Nebraska have equal access to quality education. It would include:
• a base limitation rate of 1.5 percent for fiscal year 2013-14 and 2.5 percent thereafter;
• a local effort rate of $1.03 for FY2013-14 and FY2014-15 and $1.00 thereafter;
• an averaging adjustment threshold equivalent to the average basic funding for all school districts with 900 or more formula students;
• a teacher education allowance of $30 million with distribution based on teacher education points;
• 50 percent of teacher education allowance paid as teacher education aid;
• an instructional time allowance of $20 million with distribution based on the average days in session in excess of 175 days multiplied by formula students;
• 50 percent of instructional time allowance paid as instructional time aid; and
• 2 percent additional budget growth with 75 percent board approval with the expenditures included in the general fund operating expenditures for FY2013-14 only.
Norfolk Sen. Jim Scheer supported the compromise, saying school districts have weathered the recession despite funding cuts.
“[The Legislature] has made it very tough on school districts in the last few years,” he said. “Almost all districts have had to reduce staff. This is trying to find a way to fund education throughout the state of Nebraska.”
The new amendment would eliminate the local choice adjustment beginning in 2013-14 and limit the summer school allowance to reported summer school expenditures that are not included in other allowances. It also would clarify that expenditures included in the poverty and limited English proficiency allowances cannot be included in other allowances.
Additional budget authority for early childhood education would be included in the calculation of TEEOSA aid when programs move away from grant funding. Voluntary termination agreements would be excluded from the budget, but only when districts can prove a net savings in salary and benefits over a five year period.
The amendment was adopted and senators advanced the bill, both on 42-0 votes.
