LINCOLN – Sen. Curt Friesen of Henderson is the lead sponsor of a proposal (LB497) to ensure the state of Nebraska provides resources to cover basic education costs for all of Nebraska’s K-12 public school students.
Today, only 69 of Nebraska’s 244 school districts receive state equalization aid. The limited assistance has led to significant disparities in how Nebraska funds education for some students compared to others across the state, Friesen said in a news release.
“Good schools and quality education are important to our kids, our families and our businesses. Because of its importance, the state has an obligation to support our children’s education, regardless of where they live or the school they attend,” Friesen said.
“However, we have situations today where the state is paying for 100 percent of basic education funding for students in one school district, while covering less than 1 percent of the basic education costs in another. That level of disparity shouldn’t exist.”
Nebraska’s current K-12 funding system has not only led to inequity in education funding among students, but also in sources used to fund schools, Friesen said.
While all K-12 schools draw on property taxes for funding, schools receiving little or no state equalization rely much more heavily on local property taxes for funding. The proposal would broaden the sources used to fund Nebraska’s K-12 schools to alleviate pressure on local property taxes.
“The way we’ve been funding schools has put tremendous pressure on property taxes. Roughly 60 percent of all property taxes collected in the state go to K-12 school funding. As a result, Nebraskans now pay some of the highest property tax bills in the country,” Friesen said.
The bill contains several provisions to address both the inequity in school funding and overreliance on property taxes, including:
— Guaranteeing every public school in Nebraska receives state support equal to 50 percent of basic education funding needs.
— Adjusting the local resources component of the state aid formula to provide more state equalization aid to individual school districts to replace property taxes.
— Modifying the aid formula so schools with large amounts of agricultural land would have a better chance of receiving equalization aid.
— Ensuring additional state aid to schools are used to replace local property taxes.
— Broadening the sources of state aid funding for use in replacing local property taxes, including elimination of some sales tax exemptions, capturing internet sales tax revenues, increases in cigarette and alcohol taxes and elimination of the personal property tax exemption.
In addition to replacing property taxes with broadened revenues, the bill also contains a provision making a one-time allocation to help replenish the state’s cash reserve fund.
“This bill provides an overall framework from which we can replace parts of our school funding system that aren’t working for our students and taxpayers,” Friesen said. “To do that we’re broadening the sources we use to fund education and reducing our overreliance on property taxes. There is a better a way to fund K-12 public education than how we’re doing it today. This bill moves Nebraska in a better direction.”
Several senators have co-sponsored the bill.
In addition, the bill received support Monday from the Nebraska Agriculture Leaders Working Group. With numerous legislative proposals dealing with school funding and tax relief having been introduced, the agriculture leaders believe LB497 is the best bill from which to start, the group said in a news release.
“We appreciate all of the different ideas that have been brought to the table. We understand that no bill dealing with these critical issues will look the same at the end of the session as it does at the start, but we think this bill is the most comprehensive in addressing the issues. I’m sure there will be things we will find to make it even better,” said Steve Nelson, Nebraska Farm Bureau president.
The bill’s guarantee that all Nebraska students receive at least 50 percent of their basic education funding from the state is key to the group’s support, the release said.
“Education is important for all of us in Nebraska. It’s important to our families, our businesses, and the overall well-being of our state. That’s why the state has a responsibility to help fund the basic education needs of our children, yet it’s failing to meet that obligation for all of Nebraska’s K-12 students,” said Darin Uhlir, Nebraska Pork Producers Association president.
“Broadening the sources of revenue used to fund schools so we can replace property taxes as a funding source is key to lowering property taxes for Nebraskans. It must be a part of the discussion. LB497 reflects a thoughtful way to do that, while making sure that our state’s tax structure remains competitive with those of neighboring states,” said Robert Johnston, Nebraska Soybean Association president.
The Agriculture Leaders Working Group includes member-elected leaders from the Nebraska Cattlemen, Nebraska Corn Growers Association, Nebraska Farm Bureau, Nebraska Pork Producers Association, Nebraska Soybean Association, Nebraska State Dairy Association and Nebraska Wheat Growers.