Senators fight over rural-urban division of school aid

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April 22, 2013 - 6:22pm

State aid to schools is growing in Nebraska. But how to divide that aid is producing considerable debate.

Almost half the funding for schools in Nebraska comes from local property taxes. Another sixth comes from the federal government and other sources. That leaves about one-third coming from state government – largely from sales and income taxes. And that’s what senators are arguing about.

Unlike recent years, when the pie has been shrinking or staying the same size, the Education Committee is proposing to increase state aid from $852 million this year to nearly $915 million next year. But how that pie gets divided up is the big issue. (For a comparison of what districts are getting this year, and what they would get under one version of the Education Committee’s proposal, click here).

Education Committee Chairwoman Kate Sullivan of Cedar Rapids said she does not want the argument to be about politics or winners and losers. "And neither do I want this to be a rural vs. urban fight about state aid," she said.

" I’m sure that some, maybe even some of you here in this body, thought that I would have too much of a rural slant as my focus as Education chair. Well, you can take that for what you want, but I am telling you that I have tried to create statewide policy here," Sullivan added.

Sen. Ken Haar of Lincoln, himself a member of the Education Committee, led the opposition to proposal. Haar said there is a growing gap between districts with fewer than 900 students and those with more. The larger districts charge their residents an average of $1.04 per hundred dollars in property taxes for schools, while the smaller ones average about 10 percent less than that.

Something called the "averaging adjustment" in the state aid formula is supposed to help compensate for the property tax disparity, but Sullivan and the Education Committee want to abolish or suspend that, in order to make state aid more predictable.

Omaha Sen. Tanya Cook objected to that. "This averaging adjustment was introduced in part to address the widening gap between the amounts that are spent per student in the districts that have more than 900 students, and the districts that are small by choice or are experiencing decreases in population," Cook said.

Haar said costs per student are nearly $18,000 in rural Elba, with 67 students, but less than $7,200 in Omaha, with 48,000 students. But Sen. Al Davis of Hyannis said there is a reason for that. "The fact is that small districts are simply going to have high costs because they have few students. And as long as rural Nebraska is declining in population, we’re going to continue to see the smaller district costs increase," Davis said.

Sen. Sue Crawford of Bellevue suggested rural schools with few students per classroom and high costs per pupil have some advantages. "I would like us to keep in mind the importance of equalizing the opportunity to be in a small class for our students across the state," she said.

Sen. Mark Christensen of Imperial referred to the number of rural schools that have closed in recent years, suggesting anything that would continue that trend would hurt his constituents. "I have kindergartners getting on a school bus at 6 a.m. for an 8 o’clock start. They get out of school at 3:10, they get home at 5:10," he said.

"I’ve heard senators say ‘We need to even those costs out.’ Do you want to put my kindergartners on school (buses) for two hours? Three hours? Four hours?" Christensen asked.

The way the state aid formula works, if a district has high property values it can tax, it gets less state aid. Sen. Jim Scheer of Norfolk said the recent rise in ag land values has skewed the system. Scheer suggested that if home values in metropolitican areas had gone up as much, "we’d have a revolt on our hands."

"I’m not asking for sympathy, but I want you to realize that’s the difference. Your home values because of the current economic conditions have not gone up. Farm and ranch ground has. And they’re continuing to pay more and more dollars, each and every year," Scheer said.

But Sen. Rick Kolowski of Omaha rejected that comparison. "The analogy doesn’t fit because the same areas where the land prices have gone up, corn prices, soybean prices and beef prices have also risen astronomically to new records in our country," he said. "Having the resources to pay for a higher tax bill would be very easy to meet compared to being on a stable yearly salary in an urban area if your house price or your taxes went up two or three times."

By late afternoon, senators were continuing to wrangle over what promises to be a complicated and high stakes battle over school funding.





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