Options for school finance review proposed

The Education Committee heard testimony Feb. 3 on two bills that would establish school finance review committees.

LB323, introduced by Hyannis Sen. Al Davis, would create the School Financing Review Commission, which would conduct an in-depth review of current public school financing. Davis said that while changes to school finance have been made over time, the issue of property taxes remains unaddressed.

“Our over-reliance on property wealth results in a tax inequity and a narrow and unstable source of funding,” he said. “[LB323] would ensure that education is equitable, balanced and that every student is educated to success.”

The commission would be tasked with examining additional options for school funding including using income or sales tax revenue and other financing methods used in other states. Members also would examine financing issues as they relate to quality and performance of the schools, options for funding pre-kindergarten services and students with limited English proficiency.

Renee Fry, executive director of the OpenSky Policy Institute, testified in support of the bill. She said the issues surrounding school funding are so complex that it may be difficult to adequately achieve a more balanced approach within one legislative session.

“Over reliance on our agricultural community to fund K-12 schools could result in cuts to schools statewide if agricultural land values were to drop,” she said. “Our state would benefit from a more balanced approach [to school funding].”

Nebraska Farmers Union President John Hansen also supported the bill, saying that previous efforts to reform school funding have gone largely unimplemented.

“We did make progress [with a previous commission], but we did not follow through with those commitments as we had hoped,” Hansen said. “The way that we finance schools now, more so than it’s ever been, puts those folks who want and need quality education in conflict with those who pay a disproportionate share for that education.”

Membership of the 19-person commission would include:
• three members of the Legislature, appointed by the Executive Board;
• two members representing postsecondary education, with expertise in the area of school finance;
• the commissioner of education or designee;
• a representative of the governor;
• two members from each class of school district;
• two at-large members;
• one member representing a rural educational service unit; and
• one member representing an urban educational service unit.

Commission members would be appointed by the governor, with approval of the Legislature, and serve through Dec. 31, 2016. At that time, a final report with recommendations would be submitted electronically to the full Legislature.

The committee also heard testimony on LB182, introduced by Malcolm Sen. Ken Haar.

Under LB182, a School Funding and Educational Outcomes Review Committee would continuously review the adequacy and effectiveness of school funding in the state. Haar said an advisory committee would help bring new ideas and ways of thinking to the problem of school funding.

“This committee would add another perspective to the deliberations of the Education Committee,” Haar said. “It would bring some fresh, experienced eyes to the process.”

The committee would review implementation of the Tax Equity and Educational Opportunities Support Act (TEEOSA) as it relates to budget growth limitations, equalization aid, minimum levy adjustments and expenditures of school districts.

Ensuring that goals set forth by the Legislature and the state Department of Education are met and that students are acquiring necessary skills and knowledge also would be reviewed.

Jay Sears, program director for the Nebraska State Educational Association, spoke in favor of the bill. He said that one advantage to LB182 is that it would not only look at funding options, but the efficacy of those options as well.

“We need to look at the funding formula, but we also need to look at the outcomes,” he said. “It’s an accountability piece, an advisory committee that can tell us if the TEEOSA formula is working.”

Membership of the committee would include:
• four members of the general public, at least one of whom has experience in the teaching profession;
• four members who are either school superintendents or school district business officials;
• one member from a school board from each class of school district;
• the governor or a designee;
• the state property tax administrator; and
• the chairperson of the Education Committee, who also would serve as chairperson of the newly formed committee.

The governor, state property tax administrator and Education Committee chairperson all would be nonvoting members.

On or before July 1 of each even-numbered year, the committee would file a report with the governor, state Board of Education and Legislature on the adequacy of school funding as it relates to property tax relief, broadening the tax base for support of public schools, equalization of the tax burden and equalization of educational opportunities.

No one testified in opposition to LB182.

The committee took no immediate action on either bill.