New state aid formula equals huge increases for area public schools

LINCOLN — Public school districts across the state will benefit from a new state aid-to-education formula approved this year by the Nebraska Legislature.

The package, LB583, makes adjustments to the Tax Equity and Educational Opportunities Support Act formula for state aid to Nebraska’s public schools.

Under LB583, the state will pay public school districts $1,500 in foundation aid per student beginning with school fiscal year 2023-24.

State estimates show Hartington- Newcastle Public Schools would have received $112,593 under the old state aid formula. The new formula could add another $918,671 in state aid to the district.

The Laurel- Concord- Coleridge school district will see an even bigger boost. LCC would have received an estimated $89,793 under the old formula. The new formula could add another $935,195 in state aid to the school's coffers.

Hartington-Newcastle Supt. A.J. Johnson said the state aid will help local property owners.

'Our property tax asking will go down because of this, but we haven't worked through all the details on that yet,' he said. 'This is a good property tax relief bill. This is the biggest thing they've done to reduce property taxes in a long time, so that's a good thing. Unfortunately, it doesn't really put any more money into the system.'

Cedar County's two other public schools will also see an increase in state aid, but not nearly as big a bump.

Randolph Public Schools was to receive an estimated $42,290 in state aid and will now receive $562,296. The old formula would have given Wynot Public Schools $1.4 million. The new formula gives Wynot an additional $96,206.

The bill also requires the state Department of Education to reimburse each school district 80 percent of the total allowable excess costs for all special education programs and support services in the following school year.

In total, the state will direct approximately $300 million per year in additional funding to K-12 public schools under LB583.

This funding will be sustained through investments by the new Education Future Fund created under LB818, which received $1 billion from the General Fund this year and is expected to receive at least $250 million each year thereafter.

District 40 Sen. Barry DeKay said area schools will receive both the estimated certified State Aid prior to the passage of LB583 and the estimated combined increase in state aid this year and every year thereafter.

'The area will see more than double the amount of state aid granted to public school districts,' DeKay said in a press release issued this week.

Johnson said the school districts have not received the funds yet, but are expecting them later this school year. The school budget year begins Sept. 1 and runs through Aug. 31 each year.

The purpose of this legislation, Gov. Jim Pillen said upon signing it earlier this year, is to increase the state's investment in education and reduce schools’ reliance on property taxes.

According to an analysis by the Open Sky Institute, under the old state aid formula, about 59 percent of K-12 education funding in Nebraska was derived from property taxes and other local sources, compared to the U.S. average of about 46 percent.

DeKay said the new law is a great asset to rural Nebraskans.

“I voted in support of LB583 because it represents a starting point to address some of the glaring disparities in state funding distributed among Nebraska’s school districts, especially in rural parts of the state,” he said. “Many schools in our area have received little to no funding from the state’s school equalization formula. With the state’s increased commitment to public school funding, schools will have additional support to help ensure every child has the opportunity to have their educational needs met.”

The hope is property taxes will be reduced, he said. “Ideally, the state’s investments to our schools under LB583 will begin to reduce schools’ reliance on property taxes and should begin to slow or decrease property tax rates for taxpayers,” DeKay said.

Estimates for all Nebraska school districts may be found on the Nebraska Public Media website: nebraskapublicmedia. org/documents/213/District_by_District.