From the Superintendent's Desk
If you have not heard about LB974 yet, you are sure to hear about it in the coming days. LB974 is the legislative bill being backed by Governor Pete Ricketts as the solution to the property tax conundrum in Nebraska. It will be hotly debated in the Unicameral, in the media, and in the coffee shops and cafes across Nebraska.
In summary, the bill does the following:
· It relies on revenue growth as a funding source for property tax relief. The cost of the proposal is approximately $535 million over the next three years.
· It lowers taxable valuation of agricultural land both in and out of TEEOSA (the state aid to schools formula) by 20% over two years and lowers taxable value of residential and commercial property both in and out of TEEOSA by 15% over three years for school districts only.
· It makes changes to factors in the state aid to schools formula including: eliminating the averaging adjustment, eliminating the allocated income tax distributions, and changing the calculations for net option funding to decrease funding for option enrollment students.
· It reduces the building fund taxing authority from a maximum of $0.14 to a maximum of $0.06.
· It restricts the ability of school districts for new construction without a vote of the people.
· It limits spending growth of schools to the consumer price index (CPI) to no less than 0% and no more than 2.5% in one year and creates a property tax asking cap in year four of implementation.
· It changes the maximum tax levy authority for school districts.
· It allows schools to make up 75% of any difference between certified state aid when compared to the January estimate of state aid with a vote of at least 2/3 vote of the school board.
· It reduces unused budget authority back to current year expenditures.
· It allocates “foundation aid” to schools on a per pupil basis, using sales and income taxes collected by the State.
· It provides transition aid for those schools at the current $1.05 maximum levy who lose more than 1% of their funding year over year during the first three years of implementation.
The measures in LB974 seek to allocate more state funds to be disbursed to schools through the state aid formula (TEEOSA), while putting more stringent spending limits and budget growth limitations in place for school districts across the state. Rather than generating new revenue sources to be channeled towards school funding through the state aid formula, the bill relies solely on the State’s anticipated revenue growth in future years to provide state aid to schools at a greater level, and in turn, create property tax relief.
The bill is clearly one of compromise. At its very basic level, the State would more adequately and equitably help fund education across the State of Nebraska. In exchange for the additional funds received by local school districts through the state aid formula, local school districts would forfeit a portion of their taxing authority and budget authority. As the bill continues to be debated across Nebraska, I encourage you to keep well informed and to please reach out to me if you have any questions about the bill, particularly questions about what direct impact the bill would have on the Ravenna Public School District. I can always be reached at 308-452-3249 or <firstname.lastname@example.org>, if you have questions regarding this proposed legislation or any other proposed legislation with the potential to impact our school district.