Senators advance state aid to schools

Senators advanced a bill April 6 that would revise the state aid formula for K-12 education, resulting in a decrease of $13 million in total funding from the current fiscal year to the next.

York Sen. Greg Adams introduced LB235, the bill containing state aid funding provisions. An Education Committee amendment replaced the original provisions of the bill and would provide schools $822 million for fiscal year 2011-12 and $880 for FY2012-13. The use of federal stimulus funds last biennium brought total state aid to $950 million for FY2010-11, but those were one-time funds.

The state’s 251 school districts are all different, Adams said, but the cuts to state aid needed to be fair.

“When you are going to reduce state aid by the amount we are doing here, you cannot nibble around the edges,” Adams said. “There are only a few mechanisms you can go to that will get the numbers down.”

As amended, LB235 would:
• allow school districts with unused budget authority to spend 2 percent of their prior year expenditures;
• eliminate the allowable growth rate for FY2011-12 and increase the rate to 0.5 percent in FY2012-13;
• eliminate the additional percentage in the cost growth factor;
• set the local effort rate to $1.0395 for FY2011-12 and FY2012-13;
• reduce the averaging adjustment and needs stabilization thresholds by 5 percent for FY2011-12;
• reduce the allocated income tax by $21 million for FY2011-12 and FY2012-13;
• expand the comparison groups by 10 larger and 10 smaller districts; and
• subtract property tax refunds from district resources beginning with FY2012-13.

The amendment also contains provisions originally introduced by Lincoln Sen. Bill Avery as LB148, which would exclude lobbying expenses from the definition of general fund operating expenditures.

“There is no better lobbyist for a school district than the superintendent,” Avery said.

Also included in the amendment are provisions of LB273, originally introduced by Fullerton Sen. Annette Dubas, to include converted contract students as option students and exclude receipts; and LB287, originally introduced by Adams, which would include early childhood in the formula’s summer school allowance beginning in FY2012-13.

Malcolm Sen. Ken Haar spoke in support of the amendment and the bill, saying it reinforces that K-12 education is a state priority.

Of the $950 million that schools received this year, Haar said, $150 million came from the one-time federal American Reinvestment and Recovery Act fund. Under LB235, aid from the state’s general fund actually would increase from $810 million in FY2010-11 to $822 million in FY2011-12, he said.

“I think we need to recognize LB235 is not perfect, but it represents an increase in general fund spending,” Haar said.

Cedar Rapids Sen. Kate Sullivan also supported the bill, saying schools were warned of the “cliff effect” that would result when the one-time stimulus funds were used to cover school needs in the last budget.

“What you have before you is an 18 percent reduction from current [aid],” she said. “The committee worked very diligently to be fair and spread the pain.”

The committee amendment was adopted 41-0 and the bill advanced on a 41-0 vote.